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Streaming drives recorded music industry
THERE are two topics the global music industry loves to talk about, via its chief lobby group: How hard done by they all are, and what wonderful opportunities they're providing for artists to be discovered.
Witness the International Federation for the Phonographic Industry's (IFPI) latest annual Global Music Report. It's chock-full of data and executive quotes. And ads for streaming music services.
Global revenue for the recorded music industry climbed 8.1 per cent last year, spurred by a 41 per cent rise in streaming, according to IFPI. That format now accounts for 54 per cent of industry sales, while download revenue dropped by 20.5 per cent.
Rob Stringer, CEO of Sony Music Entertainment, lent this quote to the report: "This is the most fast-paced and innovative chapter of the music business in decades. We continue to grow the number of opportunities for artists to reach their audience."
Max Lousada, CEO of recorded music at Warner Music Group Corp, is also big on artists and their audiences: "Our role is to help turn creativity into careers, and to convert fans' access into attention."
IFPI, which is chaired by Spanish singer Placido Domingo, also points out that revenue last year was one-third lower than the market's peak in 1999.
If by artists these executives mean Ed Sheeran, Drake, Taylor Swift and Luis Fonsi, then they did indeed create opportunities and careers. If you're any of the thousands of other artists strumming away on your guitar in the hope of making it to the golden mic, then best of luck to you.
Sheeran was the top artist in streaming services last year with Shape of You, and along with Fonsi's reggaeton earworm Despacito, accounted for 42 per cent of the streams garnered by the top 10 songs last year, according to Gadfly calculations. Sheeran was also the number one global recording artist last year across all platforms, ahead of Drake, who headed the list the prior year.
In the album charts, it was Sheeran's Divide and Swift's Reputation that not only took honours but were responsible for more than half the unit sales of the top 10 - which includes digital and physical, but not streaming. To be frank, being an album star isn't what it used to be - physical and digital (both singles and albums) brought in US$8 billion of sales last year, compared to US$25.2 billion in 1999.
Being an individual streamer isn't much better. The streaming music business is structured in such a way that only the very top performers are likely to make any money. In addition, as Shira Ovide outlined, services such as Spotify are surviving thanks in large part to a helping hand from the music labels. In this "can't live with them, can't live without them" scenario, we can expect to see more concentration around top-selling acts and less room for niche performers to make money from recorded music.
And since labels are really in the business of selling music, we should expect to see more of Ed Sheeran, Drake and Taylor Swift. You can't really blame music companies when streaming has become one of the most democratic means invented for audiences to show their preferences. Just don't expect that to translate into "growing opportunities for artists" or turning "creativity into careers". BLOOMBERG GADFLY