Current Music Industry Trends

This blog post will focus on current music trends, as well as looking to the future to see where the current trends may take the music industry in the near and far future.

Crowd funding

Crowd funding has become a major part of the current music industry, so what is crowd funding? Well crowd funding or fan funding as its name suggests is a way fro musician or artists or anyone for that matter to be directly supported by their fan base. Sites such as kick starter and pledge music allow creative individuals to be able to fund larger projects, the funding comes from people who actually believe in the individual that has set up the project. Normally bands or artists without the backing of a label need this sort of help to get them through and album or event. But with this is a problem where the people who back these projects don’t really know if what it ends up being will be something that they like so backers have to have a lot of trust in people they do not know personally. Kick starter is a crowdfunding site that allows any sort of project no matter how strange to be backed, big names in music such as de la soul have used kickstarter to fund their own album all by themselves. “Kickstarter is one of those platforms that gives you space to work with people who know you, love you, and support you.” de la soul said this in an interview with kickstarter, it is easy for musicians such as de la soul to have successful kickstarters because they have an already large fanbase that is dedicated, but for smaller artists it might be a big stretch.

Some kickstarter figures:

If a project is successfully funded, Kickstarter applies a 5% fee to the funds collected for creators. Our payments processor will also apply payment processing fees (roughly 3-5%). The complete fee breakdowns are available here. If funding isn’t successful, there are no fees.

$3,051,245,137

total dollars pledged to Kickstarter projects

125,006

Successfully funded projects

12,918,993

Total backers

4,141,955

Repeat backers

38,177,198

Total pledges

Pledge music is a crowd funding platform made for musicians, it allows fans to fund artits and follow their journy through the process of making the album or whatever prjoect is being made. For someone who doesn’t really know anything about the creation of music this could be a really interesting insight for many people and for people who do know about the creation of music, it helps give maybe a different perceptive into it.

  • The average spend per fan on PledgeMusic is $55.
  • 910,000 users
  • $50 mill
  • Their cut is $7.5 mill

As you can see by the first figure $55 is the average spend per fan on pledge which is still quite a lot because pledge only takes 15% of that which is a fair amount.

Some stats

  • For targeted campaigns, PledgeMusic says emerging artists hit and exceed their projected goal 87% of the time. For frontline acts that number ticks up to 90%. Combined they exceed their intended goal by an average of 12%.
  • 88% of fans on the platform buy a physical product, and the compact disc is still alive and well there, with vinyl coming in a close second.
  • Pledge Music artists create over 400 pieces of unique content – behind-the-scenes posts featuring exclusive music, video, and images – each week and a growing number of these are being viewed on our PledgeMusic app.
  • Since 2014, PledgeMusic artists have charted over 130 times on the Billboard charts.
  • PledgeMusic artists have also held top spots on the charts globally throughout 2015 and, within a single week in the UK, Pledge artists held the No. 2 (Bring Me the Horizon) & No. 3 (The Libertines) spots on the UK album charts.
  • The Pledge Music recommendation engine drives up to 10% of pre-sales.

 

Live Music

With the steady decline in recorded music, the live music sector has defenitly taken of in recent years. Almost half (47%) of pubs, clubs, student unions and restaurants featured at least one live act in the past year, and a fifth (19%) of small venues staged gigs at least twice a month, the Live Music Forum poll found. In all, an estimated 1.7m gigs were staged across England and Wales. It seems that many young people would rather go to a gig than a club with it being as acceible as ever. Also with ticket prices rising for bigger venues and even more people going to see live music as ever it is obvious that this huge growth would happen. Most of the money artists are making these days all relies on live music the album is mainley there to promote the tour which will be the big money maker for the artists. But problems have accured becuase of this, one thing in particualr is the secondary market which allows companies such as Viagogo to sell on tickets at a higher price, this is a problem mainly for the people going to shows becuase of how much they raise the price. Companies like Viagogo

Streaming

Streaming is something that has really taken over the music industry recently, more people are now streaming music so much so that they have also stopped buying music physically and digitally. Spotify now has over 100 million users and over 50 million of those are paid subscribers, these figures are incredible especially since it has only really taken off recently. With such amazing figures you would think that spotify would be able to pay the rights owners a fair amount of money. But that is where you would be very wrong. In the case of Kevin Kadish who was the song writer of Meghan Trainor’s all about the bass which was a number 1 in 78 countries was only paid $5,679.00 by spotify. The song had over 200 million streams yet he only received such a small amount from it, in some cases it seems that the consumer may benefit more from streaming than the actual people involved in the creation of said music. Also with spotify as well as all other music streaming companies still not making money and constantly losing millions every year is streaming something that will last? Well even though they lose money they are still very beneficial to the big major labels as it gives lots of exposure and money to them it seems that streaming is a thing that should stay for the sake of everyone involved from the creators to the consumers.

Decline In Music Sales

Image result for recorded music sales

This graph is a perfect example of what the state of recorded music sales are, although out of date it is still very much a relevant graph. It shows the peaks and declines within different formats and as you can see everything is going down, although in recent years there has been an increase in. For example vinyl sales have seen an increase of 53% to reach 3.2 million units sold which is the most sales of vinyl in a year since 1991. In comparison in 2007 there where only just over 200,000 LPs purchased this really puts into perspective how much of a big comeback vinyl is making while CDs for example continue to decline. With a 11.7 per cent drop in 2016 it seems that CDs are on the way out for good. But the vinyl resurgence alone is only a small part of the industry and it alone can’t change the huge dip in recorded music sales. Streaming is on the rise but streaming sites such as spotify are losing millions every year and if they can’t change this it could be an end to streaming the way we know it right now.

As we look to the future it is clear that although slowly people are starting to buy recorded music through vinyl mainly it seems that streaming is what is going to be on top. It grows bigger and bigger every year and it seems to never stop, but who knows what will come of streaming companies as they all continue to lose money but gain users.

 

 

 

Music Publishing

Music Publishing Companies have many jobs that are very important to an artist and a record label. Although most songwriters and artist own the rights to their own music the publishing company looks after the license of the music. They give the music scores to companies for use in films adverts etc. They also collect all the royalties from the sale and distribution  of the music. They help music creators to further the expanse of royalties they can make from their music, because of how many record deals go these days the artists will normally end up with way less money than they earn when you factor in all of the people that help create the music and deserve a cut of royalties, so publishing companies can help give creative artists the opportunity to make extra money, sometimes more from their actual record sales.

Music publishing companies are able to exploit the compositions that they are given because they will have connections in the industry which means they can save an artists lots of time when it comes to contacting companies to request work, and more often than not unless you are already celebrity status you more than likely will get shot down or even worse not get any sort off response.

Types Of Publishing Companies

There are 4 types of publishing companies that you could come across.

  • Major – These are the biggest publishers, all major publishers will have ties with major labels as well as have the most contacts through the entertainment industry. Warner-Chappell is probably the best known of these.
  • Major Affiliated – These are are what you would call an independent publishing company, but they have deals with the majors to handle their licensing administration.
  • Independent – These publishing companies are basically the same as an indie label. They handle their own administration in-house without the aid of one of the majors. They are also self-funded.
  • Writer-Publishers – It is not uncommon for a songwriter to handle their own publishing. If the workload dictates it, they may hire someone to handle to handle their song administration for them, but this person is an employee of the songwriter who gets a salary/hourly rate/flat fee for their work – not a representative from a publishing company that takes a cut of the income.

How Do publishers Make Money

When it comes to making money, the way publishers do it is through licensing fees as well as royalties. Most music publishers will have a 50/50 deal with the person signing the contract, when the deal is signed all money generated by the music gets split 50/50 between the artist and the publisher. At one point publishers would get full rights to the music they signed for life, but now publishing deals are a lot more fair in many ways as the publisher only gets part of the copyright and for only a certain amount of time that would be designated within the contract. But some may argue that 50% is to much to give up, this is a large portion of all your royalties that you need to give up. The question that you should then ask yourself is. Could I do this myself? It certainly isn’t impossible but it would be very difficult as an independent artists to get your music on other platforms without the help of a publisher. What a publisher does is take a lot of stress and time off an artists which would stop them from creating as much music as they wanted, one way to look at it is that even though you have to give up 50% of your royalties, this is money you would never would have seen otherwise. The bottom line is that music publishers can certainly enable you tap into some very lucrative income streams that you otherwise wouldn’t have had, as well as help you manage some difficult jobs. Although you as an artist can certainly handle your own publishing, and thereby keep all of your profits, a good publishing company can potentially take your career to the next level. Publishing deals can indeed be a very good thing, but make sure you understand what to expect from the company and that they are bringing something new to the table that you can’t create for yourself.

PRS

The PRS or performing rights society pays songwriters, composers and the publisher for for when their music is played in public places such in shops or other business. Music is an important part of many business and help create a mood and atmosphere often depending on the time of day or what day of the week it is, these companies are therefore using other peoples intellectual property for profit and so must pay up and buy a PRS licence. PRS is a non profit organisation which means that they don’t take any of your royalties for themselves. If you are a writer you will need to pay  PRS: £100 for writer membership / £400 for publisher membership, including VAT.

MCPS

MCPS or the mechanical copyright protection society which was established in 1924 is a non profit organisation which distrusted royalties to the writers and the publisher of music for the use of their music on different formats. MCPS cost £100 for writer membership / £400 for publisher membership, including VAT. 

There are many flaws with MCPS and PPL as it is impossible to know how many people are playing your music in a shop or what radio station is playing your song and how many times they play it this is especially hard when different countries are involved. This means that you would potentially miss out on money because of the flaws in this system.

Intellectual property

Intellectual property is a law that protects all ideas from being stolen and wrongfully used, only ideas that are physical are classed as intellectual property. For example you could have an idea for a book but until you write that idea down it is not intellectual property. In terms of music it is very important and stops people from claiming music as their own or copying someone else’s music for their own gain, a composer or artist would need to record or notate the idea before it becomes intellectual property unless they do something like this then it is just an idea that hasn’t been manifested and therefore isn’t protected. Intellectual copyright last for 70 years after the death of the creator it was extended from 50 years sometime ago. But these laws have also caused many problems, as some artists or whoever the copyright holder of the intellectual property is can sue someone else if they feel that they have created something that is to slimier to the intellectual property they had created before. A recent example of this is with ‘blurred Lines’ by Robin Thickle, it was thought that the song shared and even took elements from the Marvin gaye song ‘Got to give it up’

Publishing companies are a very crucial part in many artists life and without them many people wouldn’t be able to make a living from the music they love. For this reason it seems that especially in a time when recorded music is no where near as profitable as it was publishing companies are needed more than ever to really give a boost to artists and give them extra income streams.

Record labels: their roles and how they’ve changed

From their conception back in the late 1800s record labels have gone through many different changes, as time has gone on the roles of record labels and their impact on the music industry has definitely shifted.

What are record labels

A record label is associated with the marketing of recorded music as well as music videos, they are also involved with artist recruitment also known as A&R, the copyright of recorded material and also publishing.  There are two different types of record labels although both are tightly linked, the first type of label is a major label, the big three major labels Universal Music Group, Sony Music Entertainment and Warner Music Group all have the most successful artist in the world. All these labels have their own distributing network in which they use to get the music for artist that have signed an exclusive contract with them out to the millions of consumers across the world in multiple platforms. The other type of record label is an indie label, the biggest difference between major labels and indies is money. The majority of indie labels are very small and have little money behind them they also do not have their own distribution network in which they can get music by signed artists out to consumers.

Contracts

The contracts record labels use are often confusing and in the case of major labels it would seem that they are often unfair, often the artist will only receive 14 to 18 percent of the record’s dealer price which can be between £6.50 and £8.50. Major labels offer advances, which for most artists is the biggest reason they want to be signed to a major rather than an indie. New artists signing to major labels can expect anything from US$50,000-350,000 however the artist in question will first need to recoup this advance before they ever start to make money from record sales or depending on the type of contract even merchandise. Typically indie labels will do what is called a 50/50 deal which is when 50% of money earned goes to the artist and 50% go to the record label. This deal is good because once the artist has recouped advances and other costs they will be making way more money than they ever would be but it will take longer for that money to be recouped. Major labels will always take a larger cut normally between 12 to 15% of the retail price of the record, which is a significantly smaller amount than a 50/50. Although it does make sense when record labels invest so much money into artists that they would want a way to make a profit from them. As u can see from the table bellow major labels take big risks when signing new artists because they can never know if they will be profitable or not.

Typical investment by a major record company in a newly signed artist

Advance US$50,000-350,000
Recording US$150,000-500,000
Video production US$50,000-300,000
Tour Support US$50,000-150,000
Marketing and Promotion US$200,000-700,000
Total US$500,000-2,000,000

Another type of deal that major labels often use is 360 deals, the difference between a 360 deal and a normal record deal is that with a 360 the record label not only gets that 12 to 15% on the record sales but also receives a portion of other income streams. Things such as touring and merchandise, this is a very modern creation as record labels historically never did this. Major labels however have tried to adapt to the modern age were record sales are declining and even the most profitable artists are not making the type of money from records that labels would want. Image result for record sales ukAs you can see by the graph record sales have continually gone down but not even just physical but digital to. It is clear that the casual music fan who makes up most of the people who listen to music no longer care to buy albums or singles but would rather stream. With this change labels have turned their focus to the real money-maker which is touring and because with the old model of contracts the label would lose out on even more money so the 360 deal mean that even if record sales are declining the major labels can still make big money from their artists.

distribution

The way that music is distributed has also changed a lot, in the past the only way you could get music was by going to a music shop and buying a CD, vinyl, cassette tape etc. But now it seems people are less interested in physical copies and more into digital instead. Digital is much more long-lasting and can never really go wrong, although many people of the older generation like the novelty of having a physical copy of an album. So because of this change record labels have had to look at online distribution to make some money from all the digital sales.

The Internets Impact

A big reason for this shift from digital to physical is of course to do with the internet and its world-wide reach, music is now easier than ever to listen to and download. One of the biggest issues when it comes to music and the internet is the fact that many if not most people who listen to music on the internet download and listen to it illegally. Even though outdated sites like Napster allowed its user to share files with each other using a peer-to-peer system meaning you could download any song you wanted at the time. Many sites like YouTube have strict restrictions on copyrighted material which does help but the internet has grown to big to be contained and it is now impossible to stop it. It is not to say the internet has not done any good, the internet in some aspects allows you to be your own record label. You can put out your own music and make money from that same music and the money goes straight to you without any sort of record deal independent artists still have a platform in which they can share their music with an audience around the world it goes without saying that many young stars in the industry have had some kind of success on the internet. But does the good out way the bad? Well one way to look at it is that with online distributors like iTunes and Amazon labels and artists still have a way to make money from the sale of their music but also with the popularity of 360 deals the focus has shifted more to the mind-set of how can you make an artists not just an artists but in itself its own business. The internet allows more people than ever now to have an opportunity of making it somewhere in the industry, something a few decades ago would be just a dream is now a reality that many independent artists can see.

Conclusion

With the rise of the internet and the digital age record labels have gone through many changes, the introduction of indie labels as a way to give up and coming artists a change to get recognised, the changes in how their contracts work by taking into account the declining record sales and capitalising on the other income streams of an artists. Many of these changes have negatively impacted labels and major labels in particular the internet has taken lots of money that would otherwise be the record labels away but at the same time continues to churn out more and more talent that these labels can then make money from, also with the rise of vinyl sales recently although only a small portion maybe there is some hope for physical records. The future of the music industry and record labels is unclear but it would make sense for labels to continue to try to fit their business around a generation that has grown up with the internet and no little about owning CD’s or vinyl. Major labels are already a huge part of the music industry and are going nowhere but their relevance to many up and coming artists continues to decline.

 

 

Publishing

Publishers 

A music publisher ensures that songwriters and their composition are used for commercial things such as on TV shows and adverts. They do this through a publishing contract which is normally different than the recording contract that an artist may have signed. The songwriter will assign the copyright of their compositions to the publishing company and in return the company then licenses the composition, helps monitor where they are used and collect and distribute royalties accordingly.

PRS

PRS for music limited is the UK’s largest collection society, bringing together two collection societies.