A recent study found from Citigroup suggests that artists in the music industry only receive about 12% of the $43 billion revenue generated by the music industry last year. Surprisingly, this is still an increase from the 7% that artists received in the year 2000. Still, both these percentages are only a small fraction of the overall revenues seen in this sector of entertainment. The increase of the percentage is attributed to the increase of touring and live performances of professional musicians. Overall, the market of streaming music damaged the traditional business plan that existed only a decade ago. The days of digital downloading of music have faded, as consumers can easily pay $11.99 a month for unlimited streaming access. Apple launched Apple Music and discussed phasing out digital downloading on iTunes in the near future.
The change in the consumption of music has left record labels scrambling to adapt. The term “360 record deal” has become an industry norm. Essentially, labels stake a claim in every aspect of their artists’ revenues. For example, ticket sales, merchandise sales, paid song features, and so on… This has allowed record labels to remain profitable in an industry that is constantly changing. Unfortunately, the artists are the ones that lose out in these deals. Artists are seeing administrative costs cutting into their touring revenues, which are usually the primary source of income for musicians. Artists are having their hard earned money from endless touring come under attack from the music business. With so many administrative costs in play from working with a label and distribution firm, “Why don’t more artists go independent?”
Perhaps the story of Chance the Rapper would seemingly be enough to convince rising artists that the “music establishment” should become a thing of the past. The independent rapper from Chicago came up from nothing and became a Grammy award winning artist primarily through his musical releases on the streaming app SoundCloud. To this day, Chance the Rapper is still an independent artist, he is considered the “prize racehorse” that no record label could tame in the music industry. Personally, I feel that the story of Chance is a catalyst of what the future holds for the industry, especially in the United States. Things are changing that I believe will bring a swift diversity of the resources currently held in the industry from the major labels, to many artists and songwriters. The Introduction of The Music Modernization Act is the start of bringing some of these resources back to songwriters. The distribution services that are growing and marketed towards independent artists allow access that musicians only dreamed of a decade ago. As more musicians continue to take control of their careers, I expect the economic equality of the industry to continue to grow.