How has the music industry been affected by the Internet — positively and negatively?

How has the music industry been affected by the Internet — positively and negatively?


Increasing Types of Revenue

In the golden days of vinyls, cassettes and CDs, your income primarily came from physical sales (in addition to, performance royalties, sync and compilation royalties and concerts). One constraint was that physical revenue resulted from the sale of singles, EP or whole albums only. Now, with the variety of distribution providers, revenue has expanded to the digital kind. This means consumers can buy whatever songs they like instead of whole albums. In addition, digital revenue has expanded from different kinds of distribution: subscription-based streaming, ad-supported streaming, downloaded content to own, downloaded content for temporary access, internet radio (which adds to performance royalties) and ringtones, just to mention a few.


In the yesteryears before the internet, one of the major sources of how well artists were doing is the Billboard charts. Now, with data being the buzzword in every major industry, it is also available within reach of a search engine. In addition to that, there are also various metrics to consider that give value, which include unique views of videos, streaming usage, social media activity and engagement, geographical data and other helpful data. The easy accessibility and variety of such data gives for more autonomy for all the players within the music industry, from business managers to music labels to independent artists.

Increasing Autonomy for Indie Labels and Artists

With the additional channels available to list your music,there is more opportunity for independent artists to put themselves out there to the world. This includes SoundCloud and Tidal, which were created with the understanding that it is becoming ever more difficult for new artists to earn revenue and gain exposure. There is also opportunity for recommended similar artists when a consumer listens to a certain artists, which increases exposure for new artists.


Increasingly Competitive Revenue

The double-edge sword that comes with the increasing variety of distribution channels is that the revenue structure has become more and more complex. Traditional sales for online purchases of tracks or albums is straightforward (you get the wholesale price of the sale). It’s the newer types of distribution that come with grey areas, and oftentimes not to the best benefit of the artists.

Newer types of distribution channels, such as streaming, are more complicated in revenue model. This leads to another complication, where one of the negative effects have included the weight of advertising revenue competing with sales revenue. With a limited number of revenue and a large pool of artists and labels to disperse the earnings, the revenue can be small. Since streaming revenue is a combination of advertising and subscription, artists earnings per stream amount to less than a penny. The value of music has controversially decreased, since listening to a song on demand can easily be free to a consumer these days, while paying to the artists pennies in exchange. This can often mean artists and those working for the artist must work much harder for the next dollar.

Platforms like Soundeon help tackle such increasing complexities by capturing and streamlining all of the revenue due to artists and music labels. This also helps tackle another issue, where poor management of the many distribution channels, the revenue and data that comes with them can detrimentally affect the foundation for a new album release or a growing audience for up-and-coming artists.


If you would like to keep an eye on our project, follow us on Facebook or Twitter. We will keep you posted!

Write a comment