100 years of music industry in 60 secs

Last century the audio & music industry led a number of important technological advances. From military communication (e.g valve amplification) through to compact disc data storage, music technology was never far from the leading edge.

The middle of the century saw an explosion of industry businesses: artists now had to navigate an increasing number of labels, managers, producers, publishers, agencies and rep companies.

Dynamics shifted dramatically by the turn of the century. A peer-to-peer file sharing storm was coming to a head with Metallica vs. Napster Inc. Physical medium sales plummeted. Emerging artists were now being produced in bedrooms. Top artists might have been signing $100M+ record deals (e.g. U2, Michael Jackson) but the advances that many acts were paid to produce records fell through the floor. The tail wasn't wagging and the rest of the body was feeling the pinch.

Most industries were benefiting from multiplying tech-capabilities: ROM, RAM, PPI, Megapixels and data speeds were doubling every other month. Incremental tech releases maximised revenues and disruptive business were born. In parallel, Apple redefined personal listening devices with the iPod. “1000 songs in the palm of your hand” was obtainable by the use of highly degraded, compressed and shareable file formats (nasty sounding 128kbps mp3s). What a regression!

According to the last four years of the Global Music Report, the tide is turning . . . for now. In the past year we’ve seen significant year-on-year upticks: in streaming revenue (+41.1%), digital revenue (+19.1%) and global revenue (+8.1%) and synchronisation revenues (+9.6%). Performance rights revenue is steady (+2.3%) and even, the decline of physical media continued to slow as vinyl demand increases.

It’s too early to eternally thank the likes of Spotify, Apple Music and Tidal. Getting people to pay for the music they listen to has to be a good thing. Perhaps opening up huge libraries for small monthly subscriptions is a reasonable first step in the journey. In a fast moving industry rebounding from technology disruption, it certainly can not be the destination. 

The immediate challenge is acknowledgement of all writers, performers & right holders and then, the fair equitable distribution of global music revenue. Sony Music shifted the tone with their recent decision to pay its artists a third of the $768 million it cashed in from its Spotify shareholding. Taylor Swift negotiated a similar dynamic for artists under her new agreement with Universal Music Group.

I wonder if the music industry is steadily regaining its health or if we are witnessing a temporary reprieve from impending disaster.