The Evolution of the Music Industry
The music industry has changed rapidly over the past decade due to digitization and new ways in which music is able to be distributed. During the 20th century, major labels controlled the business and had a business model that focused on signing talent, promoting that talent, and then helping the talent distribute their work. Much of the work was distributed in the forms of CDs and downloaded songs on platforms such as iTunes. This business model has been slowly decreasing since 2000 when revenues of worldwide music totaled $36.9 billion. In 2015, revenue fell to $14 billion. In the past three years, revenue in the music industry has been slowly rising thanks to a new business model that focuses on streaming and subscription platforms such as Spotify and Apple Music. Many streaming and subscription-based platforms have been on the rise in the last few years. Spotify, arguably the biggest streaming service has 75 million users, 30 million of which pay a $10 monthly subscription in order to play songs on demand without listening to ads. Apple Music, created in 2013, has roughly 11 million users and allows customers with a $9.99 monthly subscription to play any song on demand. Spotify and Apple Music have provided each other with a lot of competition, which has caused both services to have to improve their platforms. They are constantly trying to better themselves in order to gain as many subscriptions as possible. Bobby Owsinski has even predicted that in 2019 Apple Music will come close to overtaking Spotify because Apple Music had “significant growth” in 2018. With the increase of these streaming and subscription services, many questions and issues have been raised? How much money does the actual artist bring in? How much do the streaming services get? How much money goes to advertising companies? How fair of a business model is it for the actual artists?
Sources: https://www.forbes.com/sites/bobbyowsinski/2018/12/29/2019-music-business-predictions/#2b96988aa79a
Converging Media A New Introduction to Mass Communication by John V. Pavlik and Shawn Mclntosh
Sources: https://www.forbes.com/sites/bobbyowsinski/2018/12/29/2019-music-business-predictions/#2b96988aa79a
Converging Media A New Introduction to Mass Communication by John V. Pavlik and Shawn Mclntosh
How do Artist make their Money?
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https://www.bigmachinelabelgroup.com/labels/big-machine-records
https://developer.spotify.com/branding-guidelines/ https://the1a.org/shows/2018-03-29/we-need-to-talk-about-youtube
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Simple by Florida Georgia Line is one of the songs that has been played many times on my Spotify account recently. The record label of this group was Big Machine Records. They are owned by Scott Borchetta. They specialize in country and pop music.
How does the band and the company make its money? On Subscription Services such as Spotify, payment is based on times the song gets played. For example, if a song gets played 60 times, the writer will get roughly 9 cents and the artist would get roughly 40 cents and possibly have to split that money with their record label. Basically, the artists make 10% of the revenue Spotify makes off of . On iTunes, they sell the song for $1.29. Apple gets 30% of this money, which roughly equates to 40 cents. The rest of the money, which is roughly 90 cents goes to Big Machine Records. Big Machine Records then gives roughly 9 cents to Florida Georgie Line and the writer of the song as “mechanical royalty.” Florida Georgia Line also gets roughly 16% of sales, which equates to roughly 20 more cents for them. On the Youtube and Vevo platforms, Big Machine most likely makes $1 every 1,000 times Simple gets played. Florida Georgia Line then gets a fraction of that based on their contract. On the medium of internet radio, which has platforms such as Pandora, the internet radio companies pay 25% of their total revenue to Sound Exchange. Sound Exchange then pays 50% of the money to Big Machine and then 45% to Florida Georgia Line. The last 5% goes to non-featured performers. Finally, we will look at the platform of Cds. Florida Georgia Line charges $12.99 for Can’t Say They Ain’t Country, the album that Simple appears on. The retailer of of the Cd gets 30% of this price, which is roughly $3.90. Florida Georgia line then gets roughly $2 for each CD sold or 16% of the original cost and Big Machine gets the remaining money. |
https://www.amazon.com/Marry-Me/dp/B0741PVSXL
https://bloximages.newyork1.vip.townnews.com/insideradio.com/content/tncms/assets/v3/editorial/7/2c/72c84a96-df61-11e7-8928-d731023a588a/5a301114e2ecb.image.jpg
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The final song that has been played on my playlist a lot recently is Mary Me by Thomas Rhett. His recording label is Big Machine Records. They are owned by Scott Borchetta. They specialize in country and pop music. On Subscription Services such as Spotify, payment is based on times the song gets played. Thomas Rhett will get roughly 10% of all the revenue Spotify makes. Depending on Rhett’s contract, he might then have to pay a certain amount to Big Machine Records. On iTunes, they sell the song for $1.29. Apple gets 30% of this money, which roughly equates to 40 cents. The rest of the money, which is roughly 90 cents goes to Big Machine Records. Big Machine Records then gives roughly 9 cents to Rhett and the writer of the song as “mechanical royalty.” Rhett also gets roughly 16% of sales, which equates to roughly 20 more cents for them. On the YouTube and Vevo platforms, Big Machine most likely makes $1 every 1,000 times Marry Me gets played. Rhett then gets a fraction of that based on his contract. On the medium of internet radio, which has platforms such as Pandora, the internet radio companies pay 25% of their total revenue to Sound Exchange. Sound Exchange then pays 50% of the money to Big Machine and then 45% to Rhett. The last 5% goes to non-featured performers. Finally, Rhett charges $14 for Life Changes, the album that Marry Me appears on. The retailer of the Cd gets 30% of this price, which is roughly $4.20. Rhett then gets 9 cents per song, which equates to $1.26. That leaves $8.54 remaining. Rhett gets roughly 16% of that and Big Machine records gets the rest.
Information obtained from: https://www.rollingstone.com/music/music-features/how-musicians-make-money-or-dont-at-all-in-2018-706745/ |
The Changing Music Industry
Digital Media has impacted the music industry greatly and has possibly even made it a win for everyone. First, streaming services have become very popular among the millennial generation. Apple Music and Spotify have a total of 144 million paid subscribers. This number is growing daily. With two big names competing for subscriptions, everyone benefits because both services must evolve and become better in order appeal to customers. This leads to everyone getting the best subscription-based platform possible. Second, with the current business model everyone gets paid. Platforms such as YouTube and Spotify are able to make money, Recording Labels are able to make money, and artists are able to make money. If everyone that plays a role in the business model decides to work better together, everyone could see even better profits. Finally, digital media has forced the music industry to evolve with the times just like it has done with many other mediums. The days where people buy Cd’s and full albums are dying slow death. People now want to be able to listen to whatever they want whenever they want on platforms such as Spotify, Pandora, and Apple Music. Digital Media has made the music industry change for the better.