Explore the mechanics of the music industry.

Monday, January 16, 2017

The music industry refers to the companies and individuals that earn money by creating new music and selling live concerts, audio and video recordings and compositions and sheet music. It is arguably one of the longest lasting and most influential industries, effecting fashion, arts and pop culture to a massive extent, and has been associated with some of the best development of technology - from vinyl to online streaming - and a key example of how pop culture trends reoccur (for example, how vinyl records are rising in popularity again in the modern day).

In 2015, the global recorded music sales alone totalled $15 billion (USD) according to IFPI, with a 10.2 per cent rise in digital revenues to $6.7 billion (USD) and a 45.2 per cent increase in streaming revenue also being reported [1].

These statistics clearly highlight the change in activity and the way that the public consume music, favouring digital options and streaming platforms such as Spotify which offer artists a royalty to be able to deliver their music for free (making money from advertisements and subscriptions to offline, ad-free music).

Whilst this shows modern trends in the music industry, it also highlights the issue of musicians being exploited within the industry. As explored in an infographic created by Information is Beautiful[2], for a solo artist to earn the US monthly minimum wage of $1,260 (USD), they must sell 105 self-distributed album CDs or, if signed to a label, 457 retail album CDs. However, an unsigned artist needs to be played 180,000 times ($0.007 per play) or an artist signed to a record label needs to be played 1,117,021 times on Spotify to achieve the same income, with the artist revenue totalled at $0.0011(USD) per play. This highlights the difficulty taken to earn just minimum wage, as well as the percentage of money that goes to retailers, distributors and record labels before it reaches the artist. For example, of a retail album CD, the artist generally only takes 23% of profits of a sale - with distributor/retailers taking 30% and record labels taking 47%. With streaming services becoming more popular, it is becoming increasingly more difficult for artists to earn money, in particular the lesser known artists who may struggle in generating a minimum of 180,000 or 1,117,021 plays a month.

In 2014, Taylor Swift notoriously withdrew her music from Spotify, commenting in an interview The Wall Street Journal that "piracy, file sharing and streaming have shrunk the numbers of paid album sales drastically" and refused to return her music to the streaming platform unless they were to significantly change their payout structure for artists[3]. Swift also wrote an open letter[4] to Apple to suggest that they alter their payout structure for artists during their three month free trial given to users for their platform Apple Music. She wrote that "three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing [...] we don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation" and urged that "it's not too late to change this policy" to which Apple responded by subsequently adhering to Swift's demands and changing the way in which they paid their artists.

The documentary "Amy", directed in 2015 by Asif Kapadia, highlights the fact that it is not only financially in which artists within the music industry can be and have been exploited. The documentary details the life and death of the late Amy Winehouse and how the music industry played a vital role in her eventual demise, favouring contracts and the money she generated over her mental health and happiness. The documentary acted as an expose as to the corruption of the music industry which was arguably masked by the media's attention of Amy Winehouse, leading the public to build particular perceptions of Amy Winehouse that did not necessarily take into consideration the treatment of the media and music industry towards her. This shows the power of large media corporations and conglomerates and the effects that they can have on individuals within their specific industries and has been evident in stories of other musicians in the public eye too - for example, the notorious court case between pop musician Kesha and Sony.

The largest conglomerates to dominate the music industry are Universal, Sony and Warner who, according to statistics from Nielson/Billboard, took 27.6%, 20.9% and 15.2% respectively of the US market by ownership in the first half of 2015[5], with independent labels accounting for the remaining percentage.

Of the three music case studies, all of the musicians currently work beneath these conglomerates. Adele has been signed to XL Recordings since the beginning of her career but in 2016 she was rumoured to be signing to a Sony Music Entertainment record label in a deal worth £90 million (GBP), which would be the most expensive in music history, after her deal with XL Recordings ran out in November 2015. Surely, Adele signed to Columbia Records (owned by Sony Music Entertainment)[6]. Amy Winehouse, prior to her death, was signed to Island Records, owned by Universal Music Group, and Jessie J is currently signed to Republic Records, another label belonging to Universal. Other artists signed to Universal subsidiary labels include Nirvana, Justin Bieber and The Weeknd among many others and the popularity of these acts showcase the influence that Universal has within the industry. Likewise, Sony have record deals with Beyonce, One Direction and Little Mix as well as numerous other successful artists. Warner Music Group includes artists such as Madonna, Ed Sheeran and Coldplay, all indicators of the influence that Warner possess within the market.

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1 comments

  1. I like how you give information on what the music industry actually is, showing you've got good understanding. You also add good comments on the statistics you've used and what they show. You've included a lot of information on the problems with the music industry which gives the reader useful knowledge. It is very well structured however to improve, you could include more information specific to the main studies we'll be using in our exam.

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