Trends that will reshape the music industry

Mihai Cristea 03/02/2021 | 14:55

A third of musicians could leave the industry due to the financial losses brought on by the coronavirus pandemic, a report cited by NME says. The research was carried out by the Musicians’ Union, who are calling on the UK government to provide greater assistance to those affected in the industry.

By Romanita Oprea

 

The new study finds that 34 percent of musicians are considering abandoning the industry due to losses incurred during the pandemic, while nearly half of its members are already being forced to seek alternative work and 70 percent are currently doing less than a quarter of their regular work. In this context, the Musicians’ Union urged the government to implement a seat-matching scheme and provide tailored support for those who are unable to get back to work due to coronavirus restrictions. According to the same source, in July, more than 1,500 artists and industry figures came together to ask the government to stop the “catastrophic damage” to live music as part of the #LetTheMusicPlay campaign. After months of campaigning from fans and people in the music world, the government stepped in with an unprecedented cash injection to help the arts, culture, and heritage industries “weather the impact of the coronavirus” – providing music venues, independent cinemas, museums, galleries, theatres, and heritage sites with emergency grants and loans. And even though that was good news for institutions, organisations, halls, and music venues, a question still remained about the financial support needed by the workforce in the industry – musicians, road crews, technicians, etc. The #WeMakeEvents Red Alert campaign was also recently launched, with hundreds of crew members marching on the streets of Manchester.

In the US, in September, the Live Events Industry of Oregon (LEIO) released the results of a survey that asked business owners how much longer they could carry on. “Close to a thousand people responded. More than 20 percent expected to go out of business by the end of October. That number jumps to over 70 percent by January.” Moreover, a recent report by Denver Arts & Venues, quoted by wsws.org, reveals that the city’s creative industries “have taken a massive hit since the beginning of the pandemic.” The study shows that Denver “has lost an estimated 29,840 creative-industry jobs, as well as USD 1.4 billion in sales revenue, between April 1 and July 31.” Colorado’s music industry as a whole lost “an estimated 8,327 jobs, which amounts to a 51 percent loss. The study showed that Denver alone accounted for 4,525 of those jobs, as well as USD 213.7 million in lost sales revenue.”

According to the publication Pollstar, the concert industry could lose up to USD 9 billion in 2020 alone and that figure, as Variety points out, “doesn’t include the income lost by musicians, technicians, dancers, and others in its sprawling supply chain.”

A NIVA (The National Independent Venue Association) survey conducted in June found that 90 percent of the organisation’s 2,000 member businesses said they could close permanently if they continued to lose revenue for another six months. Moreover, the #SaveLiveEventsNow initiative, created by around 20 business groups and entertainment unions, argues that while Save Our Stages is a significant step, “it is only a first step: the vital workers across every sector of the live event industry are still at risk.” 77 percent of behind-the-scenes live event workers have lost 100 percent of their income.

Half of the industry is now unemployed, Newsy explains, and the Live Events Coalition indicates that “many companies have laid off or furloughed ninety to ninety-five percent of their teams.” In a survey of almost 2,500 industry workers, more than 80 percent said they had applied for unemployment insurance. The concerts industry alone was at around USD 35 billion before the pandemic.

But will this terrible situation also bring along opportunities and new trends in the industry? We tend to think it will, as every major crisis in the past has given rise to some good ideas, as well as to people who knew how to innovate and ride the wave in order to thrive and succeed. One of the new trends comes from the manner in which artists are reconsidering the way they launch an album, create a show, and even how they can monetise their products. For example, Neil Young found success with his project Archive – a direct subscription service offering digitised content from the past, plus live streams and hi-res audio of his catalog, as he earns an estimated USD 600,000 per year directly from his fanbase.

According to Rolling Stone magazine, singer Cardi B announced on Instagram that she’d launched a USD 4.99-per-month subscription on OnlyFans where she intends to offer a menu of behind-the-scenes footage from video shoots and other “straight up, real-life” content. OnlyFans’ own earnings calculator suggests that, if she’s successful at convincing even a small percentage of her 72-million-plus Instagram followers to pay the charge, Cardi will be pulling in millions of dollars each month. OnlyFans claims that “many musicians are finding success and artistic freedom” on its platform, while the company’s entire publicly-stated USP concerns the monetisation of superfans. “The music industry is waking up to the value of superfans – a core group of dedicated fans who are willing to give more for a closer relationship with their favourite artist,” OnlyFans writes on its website.

 

Livestreaming platforms and online concerts

At the same time, artists need other ways of getting paid in order to survive in these harsh times. Some of these alternative ways may be online platforms where they can upload their music and get support from fans, as well as live streaming concerts where fans can contribute by buying tickets or simply donating a sum of money of their choice. Both indies and major label artists know that they can’t continue to count on the same old revenue streams. Instead, they’ll have to focus on things like touring, merch sales, licensing, and even more out-of-the-box options to suit their brand. For example, Verzuz, also known as Verzuz TV, is an American webcast series created by producers Timbaland and Swizz Beatz. Verzuz was introduced during the COVID-19 pandemic as a virtual DJ battle, with Timbaland and Swizz Beatz facing off in its first iteration through an Instagram Live broadcast in March 2020. The series invites two music icons, predominantly from R&B and hip-hop, to highlight their discographies in two 10-song rounds during a three-hour session. According to Wikipedia, in August 2020, after a bidding war, the series began a partnership with streaming service Apple Music and social media platform Twitter, integrating Apple’s audiovisual capabilities with Twitter’s social-engagement aspect, a first for the former.

At the same time, as YouTube becomes increasingly saturated and commercialised, content creators thirst to connect with their fans on a more personal level. That’s where live streaming sites like Twitch and Mixer come into play. Twitch is home to musicians and artists of all sizes, allowing them to connect with fans who are engaged and supportive of their work. Viewers often become super fans and stick by the artists in the following years as well.

There is also a clear trend of increased online streaming, on all available platforms. And the pandemic only boosted this further, as people were forced to stay at home and unable to attend concerts. According to toptal.com, Spotify’s Q2 2020 Monthly Active Users (MAU) and paid streaming subscribers increased by 29 percent and 27 percent year-on-year, respectively. As a result, Spotify’s Q2 2020 premium revenue increased by 17 percent year-on-year. A situation which will benefit small, independent artists, but even more so the major labels. As the revenues of streaming services grow, so should the majors’ income. Furthermore, streaming and digital download margins are roughly 50-60 percent, compared to physical margins of 40-50 percent, which are lower due to manufacturing and distribution costs.

According to Nielsen’s 2019 Mid-Year Report, streaming now accounts for 78 percent of music consumption. Vinyl continues to see a resurgence in popularity, however, with a 9.6 percent increase from the previous year. Musicians should consider bundling CDs and vinyl with their merch, as merch bundles now count towards record sales.

“I predict individual concert livestreams to blossom into a popular method this year for artists showcasing their music to a larger audience who otherwise wouldn’t be able to attend. According to Vimeo, 67 percent of viewers are more likely to buy a ticket to a concert after watching a live video of that event or a similar one, further highlighting the valuable opportunities this practice could present in 2020 and beyond,” said Austen Browne for musicmeetfans.com.

At the same time, musicians can use the platforms to reach more people and to raise awareness and funds for some special causes they are supporting. As Music Promo Today pointed out, on August 7, 2020, the Weeknd raised $350,000 for the Equal Justice Initiative by selling new and limited Weekend x TikTok merchandise through a live concert. 2 million people tuned into the show streamed live on TikTok. In April, Travis Scott hosted a psychedelic live concert on Fortnite that drew 12.3 million recurring players to tune in live to watch the show.

 

The rise of indie labels

As major record labels are not investing as much as they used to in their artists, musicians are finding alternative ways of launching and promoting their music. The social media boom is helping a lot, but alongside that, experts are saying that major labels will continue to lose their hold on the industry, and not only will indies become more desirable than majors, but major labels will begin taking on some of the tactics of indie labels. For instance, there will be more power shifting to the artist, more progressive splits, etc. According to a new report released by Deloitte Access Economics Independent, record labels in Australia grew in revenue by 18 percent over the past four financial years. The report from the Australian independent music market was commissioned by the Australian Independent Records Association and researchers collected survey data from 34 labels and distributors. As NME states, last financial year, it is estimated that the independent recording sector made USD 183 million in revenue, an 18 percent increase from Deloitte’s previous estimate of USD 155 million in 2014-2015. According to Deloitte, “the typical independent record label in Australia represented 24 artists and sold over 2.5 million albums in 2018-19.” Seventy-three percent of these album sales were digital, compared to 2014-15 where physical sales held the majority at 68 percent.

 

Shorter and shorter

Not only are people reading less and paying less attention to longer messages, but it has been proven that they also prefer shorter songs. According to DIY Musician, in 2019, the average track length of the Top 40 was three minutes and seven seconds, 30 seconds shorter than the year before. “This is largely a byproduct of streaming and discovery through playlists. Consequently, traditional pop song structures have been thrown out the window to reduce the chances of being skipped in a deck of 52 other artists. From a business standpoint, shortening your tracks might be the smartest compromise you can make. Unless you’re TOOL, who had the third most-searched album of 2019, fans are not sticking around for a long joyride of a song,” DIY Musician added.

 

Virtual Reality making its presence felt

Technology is influencing us more than ever and changing the way we consume and relate to everything around us, including music. As virtual reality has made its way into our everyday lives and in how we like to enjoy entertainment, it shouldn’t surprise anyone if it ends up gaining major traction in the music industry. Facebook’s 360 photos can be seen as a step in that direction, while major artists like Gorillaz, Daft Punk, One Republic, Muse, Avicii, The Weeknd, Bjorg, Foals, and more have already done VR and 360 music videos.

Moreover, Wave already enables artists to hold live virtual concerts for thousands of fans who appear as avatars on screen and can directly message the artist (who can respond in real time). “Over 400,000 attended Lindsey Stirling’s virtual performance last year. Social music experience platform Redpill VR takes things even further by leveraging the power of virtual reality (VR) to enable you to dance with your friends right next to Diplo – and they may all be thousands of miles away,” Forbes wrote. VR, AR, and hologram shows, such as the one for Roy Orbison, could reach much wider audiences with 5G while allowing for further innovations in the delivery of data-rich content in the context of live concerts and other high-tech experiences to our personal devices.

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