Revisiting How The Recorded Music Industry Got Crushed By Big Tech & US Policy

21st century cures for artists. The ultimate update.

Image by Microsoft Designer, prompted by the author and edited by the author. Three tech bro’s on a pile of US dollars looking out toward a giant burning record.

From the 78 RPM record to digital streaming. Platforms, products, formats and means of distribution come and go. Music and great songs last forever - but artists are suffering in the digital age like never before. Despite the whitewashing from certain quarters, the recorded music industry and the ecosystem that depends upon it for their livelihoods still faces significant existential challenges. Furthermore, artist development investment is at an all-time low.

A study in the UK by the Musicians Union and the Ivors Academy found 80% of UK musicians and music creators earn less than £200 a year from music streaming.

In the U.K working class representation in the arts is half what it was in the 1970s.

The ecosystem and opportunity is shrinking, the business more than ever is totally dependable on fewer contemporary superstar artists, the ground below has given way for the remaining 99.9% with talent, those that would certainly have forged full time music careers in previous decades.

The story is typical globally.

1999 remains the largest year for global recorded music sales.

Streaming came into prominence due to the mass piracy impact on recorded music sales in the 2000’s, with the emergence of Spotify, set up by a peer-to-peer expert and his advertising network partner, the opportunity arose for record labels to do streaming licensing deals, with promise of future revenues and the dangling golden carrot incentive of pre-IPO Spotify stock bestowed to the major labels and the largest independents. Record labels playing catch-up due to their lack of proactive innovation in the digital space, they had little choice.

The International Federation of the Phonographic Industry (IFPI) which represents the world’s major record label organisations, like the BPI in the UK and the RIAA in the U.S, have produced this graph representing the impact and step change in recorded music revenues. There certainly is some recovery since 1999s highs, but this graph is deceptive and a misrepresentation of reality. The industry has not recovered to the extent it likes to believe it has. Observations below.

IFPI Global Music Report 2023, State Of The Industry

For instance:

1/ This graph does not include performance rights revenue from in 1999 and 2000. X marks the spot.

2/ Furthermore, the graph neglects to include synchronisation revenues from 1999 to 2010 – follow that black line. Synchronisation is when music is licensed to a film, an advert, or for use elsewhere. Believe me synchronisation existed prior to 2010, I worked in synch at Universal Music in the late 90s – it has definitely always been a major business line!

3/ The graph does not factor inflation and the fact a $ or £ certainly does not go as far as it did in 1999. In real terms the results are far less impressive.

With the IFPI neglecting to recognise the size of the issue at hand and how much the industry has shrunk, the organisation begins to expose itself as unfit for use. It’s clear the IFPI needs to face facts and use like for like data points. Otherwise, it will continue to be delusional and spin mistruth on its own successes and failings.

Furthermore, perversely its members have a vested interested in Spotify’s business results to the detriment of the artists it has under contract.

To solve the problem, first the extent of the problem needs to be acknowledged.

The recorded music industry had always owned the format, the means of distribution and the evolution of both. It now does not own either.

Music was at the heart of the format since the 7” 45 rpm record, the development of the LP, the cassette and CD all produced and owned by companies with record labels.

The problem began with the parasite economics of mass copyright infringement online, file sharing of music works from the late 90s onward. In the U.S. the Digital Millenium Copyright Act of 1998 allowed hosting websites to carry copyright infringed material on mass; music, videos, film, and so forth, all without recourse, its purpose seemed to help the growth of emerging Silicon Valley businesses, impacting the largest music market globally, the loophole having a global impact. Take down soon became a farce. Addressing copyright infringement was a logistical minefield, ending up with industry bodies and labels suing alleged uploaders and downloaders, case by case, as documentation shows, commonly teenagers and single mothers. Meanwhile for the tech bro’s, if you host the content, the audience will come, in their millions, and billions, and so for the most respectful and sustainable entities so will the multibillion-dollar ad revenues - which were certainly not shared with copyright owners.

Would a cargo transporter ship claim ownership over all its cargo and the revenues its cargo produced? Fuck no.

Image by produced by Dall-e edited and prompted by the author.

From the birth of 1950s rock ‘n roll and for fifty years to the noughties’, recorded music was the key revenue stream for artists. Tours were booked to promote album sales. No longer. The business model is broken. Part explaining the ahead of inflation rise of live music ticket prices over the last two decades. Tickets, merchandising, and for writers, publishing, are now the key dependable revenue opportunities for artists. Today’s circumstances are fine for heritage acts who built a profile in the booming years of the industry and can fund a tour of arenas. These opportunities are less accessible for newer artists who are more likely to struggle to fund a tour of grassroots venues, and most likely at a loss.

The music ecosystem for artists needs revaluation.

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