Why is it that musicians only make 11 percent of what the entire music industry makes? Although the music industry has had amazing innovations from the way we listen, share, and create music. The music industry by in large still operates in an old fashioned way when it comes to revenue and how it gets divided. We will go over what is happening, who benefits the most, and how the rapid change in technology will effect the industry moving forward.
What is Happening?
This is happening because there are too many variables standing in between musicians and the fans themselves. In an ideal world the musician would release their music to their fans directly and the fan would pay the artist in some way shape or form that has monetary value. This is not the case, in order for the musician to even have anyone listen to their music they have to upload it to one of the major streaming platforms, use a distributor and or publisher to do so, and in most cases artists have a plethora of management, lawyers, public relations, record labels, A&R people, and sponsors. Not to mention the taxes by the government. When we get to the root of where everything is being divided and amongst who, the artists who actually make the music end up being very close to the bottom of the list.
Who Benefits The Most?
Who benefits the most in the music industry is who has always benefited the most in the music industry. The record label. The record label holds most of the copyrights to the music so therefore if the radio stations, television networks, sports leagues, movie studios, and streaming platforms want to be able to use this music they have to go through the label to do so. This is brings us to the second beneficiary to this system who is at the very least a tight second. The streaming platforms. Streaming has accounted for more than half of the total revenue in the music industry in recent years. Streaming is basically how we listen, share, and find music nowadays. Platforms like Spotify have two key drivers to revenue. Advertising and paid subscriptions. The label receives a percentage of the revenue in order for Spotify to use their music on their sites.
The Industry Moving Forward?
There is a forever increase in technology and the music industry has went an incredible transformation throughout the years. We believe that this technology will bring empowerment to individuals. Amazing innovations have been in place on changing the overall landscape with record labels and direct fan relationships. We look to continue to empower musicians in regards to their financial well beings in relation to maximizing the money they have and also giving them tools to bring more in through the people who support them. In the years to come their will be massive change by the way we listen, experience, and contribute to music. People love the idea of supporting the things they love and want their contributions to go to worthy causes. We see society trending in this direction through supportive investing for things people are passionate about.