Surging Sales? Independent Artists Are Still Being Marginalized…

by Sheme Jobs

Last week, we reported that fan-created videos are getting more traffic than official artist videos. Now, there’s another eye-popping stat: according to data just shared by Tunecore, indie artist revenues are growing four times as fast as the industry average. Tunecore, one of the largest digital distributors for indie and unsigned artists alongside services like ReverbNation and CDBaby, has a dataset that is difficult to ignore.

So what’s wrong with this picture?

Despite all the heady growth among indies, mainstream artists are completely and utterly eclipsing independent artists overall. According to a recently-released study by MIDiA Consulting, the top 1% of artists are making 77% of all recording revenues.

Counterintuitively, mainstream artists are now commanding an even greater share of digital formats.

There are different ways to define ‘independent,’ but smaller artists seem more marginalized than ever. Tunecore, for all its heft in the indie and unsigned world, still looks like this compared to the broader recording industry.

Could Streaming Subscriptions Save The Music Business?

by Sheme Jobs

Everyone is aware of the sales decline the music industry has suffered over the past two decades. But is there a light at the end of the tunnel? Yes, says THE ECONOMIST, which writes, “record bosses now hope that online streaming could become a big enough business to arrest their industry’s long decline.”

The report notes, “streaming now has around 28 million paying subscribers, and several times as many who use free versions. Last year subscription-based versions like SPOTIFY had combined revenues of more than $1 billion, up more than 50% from 2012. That figure does not include online-radio firms, which last year had revenues of $590 million in AMERICA alone, a rise of 28% from the year before. In AMERICA, the largest music market, 21% of the industry’s 2013 revenues came from streaming, whose growth more than offset declines in CD sales.”

“Streaming services have taken off thanks to wider smartphone adoption, faster internet connections (including 4G mobile) and the spread of cheap online ‘cloud’ storage for music files,” sums up the article. “Even so, only 4-5% of music consumers in AMERICA and BRITAIN have so far signed up for subscription streaming, says MARK MULLIGAN of MIDiA CONSULTING. But if just 10% of the people in rich countries were to subscribe, the industry’s fortunes would be transformed, says CLAUDIO ASPESI of SANFORD C. BERNSTEIN, another research outfit.”

Full Article Here

The Top 1% of Artists Earn 77% of Recorded Music Income, Study Finds…

by Sheme Jobs

Whatever money is left in recordings, you’re probably not making it. That’s the harsh conclusion offered by Mark Mulligan of MIDiA Consulting, whose data shows a more extreme imbalance towards superstar artists than previously thought. ”The music industry is a ‘superstar economy,’ that is to say a very small share of the total artists and works account for a disproportionately large share of all revenues,” Mulligan noted.

“This is not a Pareto’s Law type 80/20 distribution but something much more dramatic: the top 1% account for 77% of all artist recorded music income.”

In other words, the exact opposite of the Long Tail, a theory that seemed exciting at the time but has now been thoroughly disproven (MIDiA’s report is titled The Death of the Long Tail: The Superstar Music Economy). Because instead of embracing choice, consumers have actually been completely overloaded by it. The result, according to Mulligan, is a ‘tyranny of choice‘ that makes consumers less likely to explore, and more likely to glom around mainstream artists.

There is good news, however: although recorded music earns far less in 2014, the percentage earned by artists has increased. Specifically, artists are now capturing 17 percent of recorded revenues, up from 13 percent in 2000. The only problem is that these gains are only being enjoyed by a tiny minority of artists.

Summary report here.