If you’ve read any news lately concerning the music industry, you’ve likely encountered severe doom and gloom. With titles like “How One Generation Was Single-Handedly Able to Kill the Music Industry” and “The Music Industry is Still Screwed: Why Spotify, Amazon and iTunes Can’t Save Musical Artists,” it all sounds positively apocalyptic.While no one would deny that the landscape is changing dramatically, it’s not in fact the end of the world as we know it. No one knows exactly what the future will hold, but there are plenty of possibilities.
Streaming is the elephant in the room when it comes to music these days. Everyone’s listening and it seems to be a great way for up and coming artists to reach new fans and bypass the traditional radio rigamarole. While this all sounds popular, the business end is running into issues. No one, not even the behemoth Pandora, has figured out how to make the model profitable and current plans to do so ignore realities about what people are willing to spend for music. Even worse, the meager profits these services make aren’t going to the artists and songwriters.
Subscription can, however, be a viable option once customers can be convinced to invest in music. This shift involves both improving the content and changing the target demographic. As Ted Gioia points out at The Daily Beast, the music industry can learn some lessons from television. HBO helped usher in a renaissance that convinced people to pay for what used to be free, with terrific results in both revenue and quality. His main suggestion is simple: better music for grown-up tastes.
The old system demanded that artists sign with record labels to get the exposure and resources they need. The internet has helped democratize the music industry to an extent, allowing artists to get exposure and gain a following independent of middlemen. The problem is that it’s still very, very difficult for indie artists to thrive.
Something’s got to give, but in the meantime artists must figure out ways to make it work. One such change avenue is getting patrons to fund their work instead of only selling the music after it’s made. Big companies like Honda have been shifting money from television to sponsoring innovative music festivals. Another popular option is taking the music to the masses and getting crowd-funded on sites like Kickstarter and Patreon, the latter created by Jack Conte of the band Pomplamoose. As Conte points out in an interview with Slate, “Except for that hundred-year blip [the 20th century], patronage is how it’s always been and that it is how you are going to be. I honestly feel the crowd-funding revolution is the future of how artists are going to make money. People are going to step up to the plate.” So far, it seems to be working for Patreon, with $2 million going to 25,000 artists in one year.
The Live Experience
With record sales plummeting, concerts are now the industry’s biggest money makers; in the past fifteen years profits have grown from $1.5 billion to $5 billion per year. Fans enjoy the authentic experience of seeing a band perform live and it’s a privilege they can’t illegally download.
Artists these days are seeing most of their income from touring, but being on the road can be brutal. Not only do venues and ticket companies soak up a lot of the profits, rising costs (i.e., gas prices) and being away from home for extended periods take its toll.
The current model, however, is unsustainable. Most top acts are in their 50’s or older and charging an average of $60 per ticket, requiring creative innovations in the future if profits are going to continue rolling in. Smaller acts need to connect to their bases better and they need to provide unique, intimate experiences. Cellist Zoe Keating has found great success doing “on-demand” tours and Ryan Lerman offers backstage guitar lessons along with concert tickets at $75 a pop.
In the end, the industry will be forced to adapt. This has happened before and it will all happen again. Instead of shrieking about the end times, executives, artists and talking heads alike must stop bemoaning change and start coming up with bigger, better, more interesting solutions.
Image Source: reverbnation.com