Streaming Can Fix the Music Industry’s Value Gap

Benedicte Guichard | Mon Apr 25 2016 | Industry insights

Streaming music - more revenues more musicians Photo credits:

Once upon a time, the UK, US and Central Europe was rife with well-funded indie labels who helped musicians nurture their talent, tour and sell music via physical mediums for a fair return on investment.

In recent times, the digital market has detracted from people going to record stores to buy CDs and 12 inch vinyls in favour of MP3s and illegal downloads - it seems that the crackle of the record and the excitement of the CD sleeve are becoming a thing of the past.

Music industry revenues are changing shape

According to this year's IFPI Global Music Reportdigital sales contribute to 45% of industry revenues, compared to physical's 39% share. For the first time ever, digital sales have officially overtaken physical sales in terms of global revenue - a historical milestone for the industry. The chart bellow shows the revenue structure throught the years, and the growing influence of digital revenues. 

Music revenues through time - stats

Global music consumption is on the rise, which in many ways is great news, but the problem is that the market is so saturated; there is a significant value gap for record labels and artists. The other issue is that, major digital services are finding it increasingly difficult to circumvent the normal rules that may apply to music licensing.

As digital music is so readily available to consumers, the people making, nurturing and promoting the music are suffering from an unfair return for their hard work. As a result, making a sustainable living from music is becoming more and more of a pipe dream. But, like an innovative industry, there is a way to bridge the value gap dilemma…

Streaming may the key for fair, steady revenue flow

A wide range of music industry groups is calling for action from governments on this issue with the value gap. They claim that this problem needs to be tackled if the sector is to achieve sustainable growth in the future. The user-upload platforms benefiting from the misapplication of "safe harbours" have an estimated user base of more than 900 million. Yet the ad-supported revenues sector they are part of, generates revenues of $634 million, accounting for only 4% of global music revenues.

Speaking of revenues, according to the same report, streaming remains the industry's fastest-growing revenue source. Revenues rose by 45.2% to US$2.9 billion – and over the five year period up to 2015, have grown over four times.

Streaming music revenues through time - stats

So, while your musical arrangements may seem like they’re dangling in cyberspace with a meagre price tag and the legislators are revising their policies, the streaming revolution offers new ways to make money from your art and take control of your destiny once again.

If you already have a tight-knit fan base or you fall into a musical niche, digital streaming is an effective way to make solid revenue from your music. As a band, musician or solo artist, it’s possible to:

  • Start a video subscription service to drive traffic and attract new audiences. Offer behind-the-scenes updates, vlogs, music videos and members only content for a monthly or annual fee.
  • Live stream your concerts (or even your jam sessions) on a PPV basis and promote via your social channels on the lead up to the show.
  • Put together a video based music tutorial course (any key instrument or even band musical improvisation tips) and charge per lesson or bundle.

The above suggestions are becoming increasingly popular by the day and with the world of virtual reality really hotting up, we feel that these are just the tip of the iceberg.

Music is thriving and in this day and age, there’s never been a better time for a positive merger between art and technology - so get out there, get your thinking cap on and take charge of your music career once again.

Good luck.

Interested to stream and sell a live concert? Take a look at our PPV handbook:

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