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Top 1% of artists earn 77% of recorded music income, new report finds

on March 06, 2014, 5:21pm

In many ways, the music industry is a lot like the world’s geo-political infrastructure. Labels are the countries, bands are the citizens, and albums and merchandise are the goods and services that make up a given “country’s” gross domestic product. Just as the rest of the world’s breakdown of individual citizen’s wealth is greatly stratified, so too are there sizable gaps in the incomes of bands/artists across the musical spectrum. As a new report by MIDiA Consulting has uncovered, the top 1% of all artists earn 77% of all recorded music income.

toponepercent1graph Top 1% of artists earn 77% of recorded music income, new report finds

According to the report entitled, The Death of the Long Tail: The Superstar Music Economy, the disparity is complicated by recent developments in the industry. While the income from all recorded music fell by over a billion dollars between 2000 and 2013, artists’ share rose from 14% to 17% in the same span of time. Still, as the report explains, the disproportionate incomes stem from the behaviors and attitudes of fans/consumers, who, instead of embracing the plentiful choices brought forth by the digital music revolution, “have actually been completely overloaded by it.”

The report continues:

The concept of the long tail seemed like a useful way of understanding how consumers interact with content in digital contexts, and for a while looked like the roadmap for an exciting era of digital content. Intuitively the democratization of access to music – both on the supply and demand sides – coupled with vastness of digital music catalogues should have translated into a dilution of the Superstar economy effect. Instead the marketplace has shown us that humans are just as much wandering sheep in need of herding online as they are offline.

In fact digital music services have actually intensified the Superstar concentration, not lessened it (see figure below). The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.

toponepercent2graph Top 1% of artists earn 77% of recorded music income, new report finds

If anything, the report concludes that the digital revolution has only helped to make the financial divide that much greater. The greatest culprit, though, are streaming services like Spotify, Pandora, and Rdio, who are engaged in a “catalog arms race which has become entirely detrimental to consumers’ digital music experiences.” With so many options, and too few authoritative voices, author Mark Mulligan says there has to be a culling of music to equalize the financial landscape:

Action needs taking urgently to make sense of 25 million songs, not just through discovery and editorial, but also by taking the brave decision to keep certain types of content, such as sound-alikes, outside of music services’ main functionality.

Until labels, distributors and artists come to together to fix the issue of digital catalog pollution – sound alikes and karaoke especially – the Tyranny of Choice will reign supreme, hiding 99% of artists under a pervasive shroud of obscurity and giving the Superstars another free lap of the track.

Still, as Mulligan points out, streaming services aren’t inherently bad; if used properly, he explains, they can help truly devoted music fans to find a well-spring of new acts while helping to redistribute the wealth, as it were.

Ultimately it is the relatively niche group of engaged music aficionados that have most interest in discovering as diverse a range of music as possible. Most mainstream consumers want leading by the hand to the very top slither of music catalogue. This is why radio has held its own for so long and why curated and programmed music services are so important for engaging the masses with digital.

Music has always been a Superstar economy and there will always be winners and losers in music sales, with the big winners winning really big. Over time the improved discovery and programming in digital music services should push the needle for the remainder artist tier but a) it will not happen over night and b) it will still have a finite amount of impact.

To read the complete report, head here. Below, enjoy a classic song that this writer feels is especially appropriate given the news.

8 comments

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Toronto Ontario attorney firm
May 9, 2014 at 4:46 am

I’m not sure exactly why but this weblog is loading extremely slow
for me. Is anyone else having this problem or is it a problem on my end?
I’ll check back later and see if the problem still exists.

Kristin
March 10, 2014 at 10:27 am

This is a great article but why oh why did you have to use an REM song instead of choosing something from the 99 percent? Is the cruel irony intentional?

jessie salem
March 9, 2014 at 5:08 pm

Don’t really agree with opening premise but it’s interesting.

It seems to me that their use of the word “music” is a stand in for entertainment and marketing, i.e. they are not talking about content, everything but.

I would say the audience is the citizenry, and the “bands” are like the Keebler Elves hyping the product, which is the entertainment package that includes everything from the show to the beer to the t-shirts. The Label’s aren’t countries, they are in fact multinational corporations.

An important stat isn’t discussed, demographics. Who is spending the money that goes towards the superstar combines? How much of it is spent by children, who’s agenda’s deserve respect but don’t tell us much about the economics of music as an art form over all; we might as well be looking at the economics of the soda pop industry.

bowlweevils
March 9, 2014 at 6:17 am

The problem is wider and less snarky than the report makes things seem.

I have nearly never been interested in most of what would be “superstar” category. I don’t really know who is in there, but I’m guessing that my high school and college collection of heavy metal and grunge contains a few superstars, or former superstars.

I’m 40 now. I don’t listen to the radio, don’t subscribe to whatever, and because of this, generally don’t learn of new musicians that I like for a few years after they start making records. I occasionally look at lists of hit artists and have no idea who many of them are. There are popular genres I’ve never or barely heard of.

But there is also just simply too much good music out there. I have only so much time to listen to music. But I have 7400 songs on my computer, and a few dozen concert and music video DVDs. I have a bunch of REM – are they superstars? former superstars? I don’t know – but I don’t listen to them much anymore. I’m listening to a heavy rotation of Siouxsie & the Banshees, PJ Harvey, Björk, Brian Eno, Coheed & Cambria, Scott Walker’s I’m-old-and-don’t-give-a shit-what-you-think albums. Are any of them superstars? No idea. But David Bowie has been very frequently listened to for 20 years and I don’t give a crap if he’s a superstar who sweats $100 bills.

Is there other good stuff out there that I’m not listening to? I’m sure there is. It would be nice to have the time to pick up all of the Clutch albums I haven’t listened to much, fully explore the Outkast catalog, Television, more Mogwai, rediscover the joys of the Pixies and Guided By Voices.

But I don’t have the time. And I’m single, work from home and can listen to music while working, and even listen to music while I sleep. But I don’t have the time. And there is plenty of other high quality work being done in other areas of the arts. There are thousands of hours of great science and history documentaries alone, and my job involves keeping competent in several foreign languages so watching German documentaries and French movies are necessary for me.

I resent the notion that the stats show that we’re all “sheeple” needing a shepherd. I read news in four languages a day. Get into arguments with people over just how close the relationship between Frisian and Dutch is. Read articles about genetic sequencing of early American skeletal finds. Take online courses in advanced problem solving methodologies and the potential pitfalls for electronic voting in democracies.

I’m about as far from a sheeple as you can get. But I’m overloaded with information that I think is great, musical and not.

And I’m sure that when you break down that superstar category, you’ll find that there are various clusters of listeners, and that within each cluster, there’s a bit of a tail as people who are interested in that kind of music find new artists who make what they like.

I listened to virtually nothing but Kristeen Young for 5 days after finding her work. Which I arrived at by seeing on Amazon that she did a song with a superstar I enjoy, a song which I was not impressed with, but monster corporation Amazon kept poking her recommendation at me until I investigated further on YouTube, another mega-corp service, and found that Kristeen Young’s duet with David Bowie was one of her least interesting song and promptly purchased everything else she’s done. So I suppose that the system worked this time, even when your favorite category of music is “unclassifiable”.

bowlweevils
March 9, 2014 at 6:21 am

And hell, Rodriguez. There’s your really long tail. Or really long slow fuse leading to a bomb.

John Poole
March 8, 2014 at 5:08 pm

Was “slither” a typo. Shouldn’t it have been sliver? As a slip up it says a little about the music business. It has always been run by snakes.

Donna Mair
March 7, 2014 at 1:56 am

what an amazing article! i agree.. too much choice leads to no decision making.. and the market is saturated with mediocre to bad/crap music so consumers are flooded with it. Harder and harder to weed out the good stuff except for the superstars with the funds to be seen.

Adam Lubicz
March 6, 2014 at 10:19 pm

I thought things like itunes and spoitfy were supposed to fix thIs? Also what about the rise in vinyl sales? This is pretty sad.

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