In 2003, Apple largely changed the music industry with its introduction of iTunes, a digital marketplace for music. By this point technology was shifting to become smaller and handheld, and the world was simultaneously beginning to combine phones with music listening devices. iTunes was revolutionary in terms of both content and accessibility for users, and was generally considered a beneficial part of the recorded music world for listeners. Additionally, the increase in sales did benefit artists, as Apple took only 30% of the profits from each song. It is important to acknowledge, however, that the majority of revenue that artists gain comes from live shows, as often half of all sales revenue from recorded materials goes to record labels.
In 2018, the landscape looks entirely different, as one would likely expect. iTunes has broadened sales to movies, television, and games, while Apple has shifted their model alongside it. Spotify currently sits as the largest music distributor, operating on a music streaming platform that offers users a premium upgrade for a monthly subscription fee. Apple Music is Apple’s response to this streaming giant, similarly using a subscription fee for financial advantages. These two titans of music both offer greater mobile usage as well as a huge library for listeners to select from. This huge library is certainly bad for artists in terms of direct payment.
Artists in this digital music age are paid by Spotify and Apple Music in royalties based on how much their music is streamed. Now, while the hours of music streamed has increased largely each year (which would imply artists are making a great deal more money), the reality is not so kind to these musicians. Certain music trackers show that 99% of streamed music content belongs to the top 10 % streamed tracks. Effectively, this means that most artists are splitting the remaining 1% of revenue to be had. While artists still gain exposure for the purpose of selling out live shows, the likely truth is that a greater share of artists are receiving less compensation from the digital music marketplace.
There are certainly alternatives to the music streaming services, such as BandCamp and Soundcloud. BandCamp offers listeners free listening to music via computer, with the option to buy albums or songs at any point. The major disadvantage of BandCamp is the smaller music library; oftentimes the top selling artists are less present than smaller projects. The benefits are that artists gain the largest share of the revenue from their music of practically any streaming platform. Additionally, artists can sell different media of their music, whether it is via cassette or vinyl, and artists can sell their merchandise through the BandCamp website. Soundcloud is better for free exploring, as users can see popular music from artists and branch out to explore through their genre.
The present day listener has to consider a variety of options for their music consumption. Do they prioritize convenience and library, or paying their favorite musicians at the cost of ease of access and variety? Artists, on the other hand, have several strategies to employ for maximizing the utility of this music they’ve recorded. In the near future, it is possible we could see an almost complete transition to subscription programs without ownership with a niche market for owning entire albums. No matter the outcome, the music industry will continue to adapt and remain fascinating for observation.
Michael O’Malley is a Business Administration/Theatre Double major sophomore at USC. He enjoys long walks on the beach, screaming into the abyss, and dancing with friends. He grew up in Birmingham, Alabama and does know how to read.