Future Music

I’m actually pretty stoked about the next few years in the music industry. Just like Jeff Goldblum said in Jurassic Park, “Life always finds a way.” And musicians really are starting to find their way. Most of the artist I work with are making better money on live gigs than ever before, and they're finding other creative partnerships to get their music out into the world. There are good things happening. Yet, with all the good, we still have to acknowledge the ground eroding under our feet. But instead of throwing our hands up in defeat, we need to process these changes and capitalize on the opportunities they present.

For the longest time, music sales were the lifeblood of the indie artist (and often, the label artist too). I genuinely remember when you could make all of your recording and production costs back from selling CDs at a few gigs. While that makes me feel all wistful, the fact is that traditional hard-copy sales are a thing of the past (with a few exceptions that I’ll mention later). "Annual music album sales in the United States have plummeted from 500 million units sold in 2007 to under 170 million units sold in 2017,” according to Billboard. For folks like me who aren’t good at math, that’s a 66 percent drop in 10 years. Even Best Buy has decided as of Q1 2018 to stop carrying physical CDs in its stores.

But maybe you still have some hope, because you know deep in your heart that people are still buying music on iTunes, and the like, right? Nope. In 2012, digital album sales totaled 118 million units, but fell to 66.2 million by 2017. Once again, a more than 50 percent decrease, but this time, it only took five years. But why?

[Insert big scary monster music.] Streaming. In 2017, BuzzAngle Music reported a total of 377 billion streams, an increase of 50.3 percent from last year. Another huge shift in the industry. But check this out—in one year, this major change happened. Not over a ten-year span, not over a five-year span, but in one year, streaming doubled. We’re not talking millions anymore, but billions. [Insert funny video of Trump saying, “Billions,” over and over.] That’s fast. Alarmingly fast.

Here’s what I find interesting. This intrigues me—not because of the decline of sales by over 60 percent in a 10-year span, then another 50 percent in one year—this intrigues me because no one is reacting. It’s sort of, well, business as usual. I don’t want to be inherently negative, but I think this should shake us up and make us think. Seriously, it’s like Nike, whose major product line has been shoes, losing that product revenue over 10 years, and no one even stops to acknowledge why. But because it’s music, and creative, and art, we don’t react as abruptly. (Nike, who did actually see a sharp decline on their profit margin’s on footwear over the last 10 years, is now raising their stake on apparel, which has a big profit margin.) We have to start looking at the opportunities provided by this seismic shift. What areas can we lean into? What areas can we grow?

And it’s probably not fair to say no one is reacting. I see more and more musicians walking away from the traditional formula of making a full-length album every 3 to 5 years. But I can say that as I write this, no one on my side of the industry is having a big enough reaction. Yet.

As with most big shifts in an industry, the innovators will prosper, and those who rest on what they accomplished in the good years will slowly become irrelevant. If it’s not clear by now, we can no longer rely on our sales alone—hard copy or digital. With Spotify paying somewhere around $0.008 (notice all the zeros?) per stream, we certainly can’t count on that as our only revenue source.

Yet, live shows are booming. Artists are making more money on shows than ever before, and there are more venues than ever before. Even in Mississippi, where many of the venues are small, restaurant owners are all seeing the value of live music. It’s sort of like everywhere is a venue now, and that’s good for musicians. Over the next few years, I believe we’ll see a continued growth for those artists who have a great live show. Especially those who create an experience for listeners. According to MIDIA Research, 59 percent of artist revenue is now coming from touring (from a 2016 study). Compare this to 33 percent in 2000. We used to think of live shows as the driver of record sales, but now it’s flipped—records are only financially relevant because they drive our live shows.

Merch is playing an even bigger roll for the livelihood of a musician. Oddly enough, hard copy and vinyl sales still work at live shows. Its fascinating that someone would buy a CD at a live show, but not at a storefront. That’s because people still really like mementos and keepsakes. They want to show their friends they were part of something cool. Something tangible from a moment in time.

To push a little, we have to ask the question, is it worth the money to have a great recording? (And it is important for me, as a producer, to know the answer too—ha!) A great recording does still play a very big part in your career as a musician, but in a different way. Now, having a killer recording is about your brand, growing your fanbase, and creating residual income. It’s no longer the pinnacle of all you do.

First, having a great sounding recording makes us appear more professional. Think of it this way, you see a band live and they are great, then you listen to their music on Amazon Music and it sounds awful. You begin to think things like, “Well, maybe they weren’t that good live. Maybe I was just having a good night and I was feeling generous.” Or, “Maybe they just don’t take their music seriously.” Regardless of how this plays out, you can’t have a crappy recording.

Secondly, having a great recording helps grow your fanbase. It’s easier (and cheaper) than ever to share new music with a friend. You can send a link or take a screen shot of that new bop. For sure, those earlier statistics are scary, but in truth, more people are listening to more music than ever before. There are more ears for your music and more ways for them to listen. While they don’t pay you for listening, that mass listenership does pay you, in a roundabout way, as you book festivals and gigs through your listener base.

Lastly, (and it may seem contradictory to what I said earlier) having a great record is still a valuable form of revenue. It just can’t be your only revenue. Bear with me here. Aside from people buying hard copies and vinyl at your show, streaming is still important for revenue. I know it’s not the same as getting $10 per copy sold, but those $.008 do add up. We’ve encouraged and helped a lot of artists we work with to grow their career on Spotify, in some cases by getting on Spotify playlists. For example, we’ve seen a lot of artists get well over 100k streams on some of their songs. That’s $400-800. With a little targeting and some hard work, that’s a nice chunk of change.

It’s also worth mentioning that revenue streams like YouTube, Jamendo, and film and TV placements can also supplement your income. The three traditional means of making money in music—merch, live shows, and music sales—might have been smashed by the Hammer of Thor, but there are still viable ways to have a career in music. It just looks very different than it did a decade ago. There’s no time for us to mourn the good ole days. Let’s seize the exciting opportunities popping up because of all of the changes.