Music Industry rebounds after a period of decline but how are artists affected?

Matt Hooke

After a long period of decline, the music industry celebrated a return to pre-2007 revenues earlier this year with the release of the latest annual report from the International Federation of the Phonographic Industry (IFPI).

Worldwide music sales totaled 19.1 billion dollars in 2018, finally surpassing the 2007 total of 18.4 billion dollars.  

The report featured five steps that the IFPI wanted governments to establish to help ensure continued industry growth. IFPI called for policies in international trade agreements and royalty proceedings that recognize that music has both cultural and economic value.

The list also included clear copyright laws giving copyright holders exclusive rights over their work, fair music licensing and stronger protections against websites that pirate music.

Music industry growth mainly came from the growing popularity of streaming services that now account for 50 percent of all music industry revenues.

Most streaming revenue comes from paid subscription services. These services often charge a relatively small monthly fee, like Spotify and Apple Music’s $9.99 a month, in exchange for unlimited access to a massive variety of music.

For many artists, this growth means little as most streaming services pay less than one cent per stream in royalties. Spotify, for example, pays $0.004 per stream. It would require 336,842 plays on the platform to make what someone would make in a month with the U.S. federal minimum wage of $7.25 an hour.

“Streaming has positives and negatives,” said ambient composer Tony Clark. “It allows your music to be very accessible to the public. At the time it devalues the commodity as many will not purchase if they can stream it for free or a small subscription fee.”

Artists in the past have protested this state of affairs. Notably, Taylor Swift in 2014 refused to put her music on Spotify.

“I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists and creators of this music,” said Swift in a Wall Street Journal op-ed.

In 2017, the country pop singer put her discography on the streaming site. Another musician who took a public stand against streaming is Radiohead vocalist Thom Yorke who called Spotify “the last desperate fart of a dying corpse.”

The top ten global recording artists last year were in order Drake, BTS, Ed Sheeran, Post Malone, Eminem, Queen, Imagine Dragons, Ariana Grande, Lady Gaga and Bruno Mars.

The growth of streaming has come with a decline in other sources of revenue. Physical revenues such as CDs went down by 10 percent over the past year. Download revenues suffered an even steeper decline going down by over twenty two percent.

For consumers, the new paradigm is excellent, for less than the cost of buying a CD a month they have access to a seemingly endless supply of music. For artists, a massive reduction in album sales has forced many to pursue alternative revenue sources to compensate for what records used to earn.

“Music artists and composers no longer can depend on royalties as an income stream,” said producer A.J. Halpern, the CEO of Monomental Music Group. “Congress recently passed new laws which increased the writer’s share of streaming proceeds by around +40 percent, but 40 percent more from nothing is still nothing. Music artists and composers need to rely on Kickstarter or GoFundMe, while the internet music services score record profits off of the backs of their work.”

Disclosure: the writer of this article received guitar lessons from Halpern in high school.