Revisiting How The Recorded Music Industry Got Crushed By Big Tech & US Policy
21st century cures for artists. The ultimate update.
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.
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.
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.
Streaming revenues comparative to physical format sales are dire. The buck now stops with labels to honourably review contract terms, and respectably compensate artists under license definitions, not contractual sales terms. Secondly, it rests with streaming services to pay better rates. Tidal pays some of the best rates, while Apple pays double what Spotify does on consistent data observed. Whether said businesses honour these critical requirements remains uncertain.
The DMCA legislation set a precedence for the concept of parasite economics across the online technology sector.
When music is used, and certainly for commercial purposes, revenue must be paid. We are now in an age where AI learning continues to exploit copyright. This is not fair use, it is theft.
Two decades on from the DMCA, broad agreement for music use was finally struck between Silicon Valley and recorded music rights holders, but the damage had been done.
The recorded music industry is certainly now big tech’s bitch and any power the major labels hold is too often not applied broadly and strategically enough. When it is applied well, you witness Universal Music’s Lucian Grainge taking on Tik Tok and winning for the business of music he represents.
I have witnessed this brutal revolution in the name of innovation from a unique position. I have been employed at key companies driving the change and those reeling from it in both the music industry and the tech industry.
I worked making records at major record labels, witnessing the downfall of a major global music company (EMI).
Six major labels became three.
I then saw print media nosedive first hand.
Later, I would contribute to making Silicon Valley tech companies globally relevant. “Making the world open and connected” seemed a good idea, in the theory of digital equality. What could possibly go wrong with such good intentions? Well, that’s another story…
In 2024, many musical artists have never had it so tough.
Latest global recorded music revenue figures are still below the 1999 figure.
Scaled artist development investment has gone the way of the dodo.
Streaming revenue is not a viable income for most professional artists.
Multiple artists going on the record on this topic exemplified this.
Here’s Miles Hunt (from chart toppers The Wonderstuff) on the situation from an artist’s perspective.
The recorded music industry, broader creative industries, and the arts have shrunk. Access to creative and artistic sustainable careers, year after year, is increasingly the preserve for the most privileged in society who can afford to fully fund and commit to their calling.
Many of todays’ Johnny Marr’s, Bobby Gillespie’s and Robert Smith’s and their like, are now stuck as Deliveroo moped drivers and corporate call centre operatives. They are not on tour or writing songs as much as they should be.
The music ecosystem no longer exists in a healthy way. Those with socio-economic privilege and talent will have a significant advantage over others of fewer means. Culture will suffer. Society won’t be fully represented in all its wonderful ways.
Consider the backgrounds of your favourite music artists from the 1950’s onward to circa 2000, as the record business prospered. Under contemporary conditions many of those artists would never have been given the opportunity and investment to thrive, they would be lost in time, their records never to exist. Empty voids in the soundtrack of your life.
Now let that sink in.
An empty space.
Sure, you’ll be able to throw several contemporary token names as examples of people from less privileged socio-economic backgrounds who headlined a festival or had a number one album. Of those such contemporaries who came from humble beginnings in more recent years, the number of artists from working and lower middle-class backgrounds will fall far shorter compared to prior decades, such as the 1960s, 1970s, 1980s and 1990s. Fact. A golden era for access to the arts for all. I’m referring here to the opportunity of a sustainable career.
While great new acts exist, more than ever we live in an age of the heritage act, those who built global and regional profiles decades ago prior to these challenges. Many new artists can no longer devote enough time to their art, balancing day jobs or multiple part time jobs just to survive. Many of these artists would thrive in healthier conditions. Now, many are giving up, because bills need paying by other means.
There are the lucky few who prosper on any remaining label budgets as big bets. Far less acts now get major label deals or deals at large well-funded independent labels than in prior decades. The size of the pie is smaller. Going DIY only gets you so far too, in between shift work in a shop.
The ambassadors of technology empires are either delusional or deceitful if they think the world is a better place today for talented aspiring artists seeking sustainable music careers, compared to two decades or more ago.
But do they care? Did they ever? The tech bro’s motivations were fuelled by business growth and revenue, not art.
Over two decades on from the commencement of online connection in our daily lives, there is still a vital need to get the balance right between major tech platforms, artists and the creative industries who have not benefited economically as much as they deserve to.
The artistic ecosystem is vital to society and culture. If it thrives, it represents, reflects, and defines our times, giving opportunity for the most talented artists to blossom into mainstream consciousness, pushing the envelope, forging new frontiers, enriching society, and culture, influencing both contemporaries and the next generation.
Year on year, fewer artists are thriving, let alone making ends meet. For technological platforms, now is the time to show some respect to the creators and artists, the likes of which you used to build your empires upon.
In the U.S the DMCA must be reconfigured to be fit for purpose for the 21st century, fit economically for the purpose for artists and creators at the heart of culture, and for tech entrepreneurs and corporations to respect copyright.
Secondly and more immediately, time is overdue for respectable revenue shares for artists and creators on all advertising and subscription revenue when copyrighted creative works are placed on a platform, service, or site. This should be so for any creative work. News media output from reliable approved sources must be fairly compensated too when re-posted to platforms driving ad revenue. The creator’s economy needs respect and income to survive, let alone thrive.
‘But we provide the platform technology and front the costs of its upkeep and product innovation’ has often been the response from big tech ambassadors protecting their right to keep all attributed revenue.
‘But we provide the content experience which pulls the audience, we front all the costs of its production, we own the content,’ is a simple reply by any artist, label or copyright owner.
So, I repeat. Would a cargo transporter ship claim ownership over all its cargo and the revenues produced? Fuck no.
For big tech enterprise it’s been a one-way street for too long. On the take, building empire, it is now about time for giving back. Will big tech’s contribution to art and culture flourish or continue to falter in this regard? Big tech leaders need to step out of their ivory towers for a moment. If the current trend continues, entire generations of talented artists of multiple disciplines will be lost, never to be heard, seen or read.
Books are literally being burnt prior to publication. Great records never being made. Films vanishing from sight before a camera is switched on. The human experience lost. Our species very means of expression suffocated.
The answer is not AI regurgitating the last 75 years of Hollywood, or pop music, or whatever else it can reinterpret on the cheap from its vast archive of stolen artifacts. AI must aid us as an assistant not as a master of imitation works.
The business of online technology has aided in the erosion of cultural output broadly, certainly the sustainability of artistic careers, furthermore there has been a propagation of monoculture via corporate entertainment business globally. We have witnessed in over two decades elements of the online tech sector blatantly operating without moral or ethical regard or respect for the law, since the days of Napster and the earliest User Generated Content platforms onward - that is until respectability needs to be harnessed years down the line for Wall Street earning call reports, and its all too little, too late.
History teaches us all empires fade and die. Music lasts forever.
Give hope to the current and next generations of artists in the 21st century, for they require an opportunity to thrive, as previous generations of artists in the late 20th century did.
Simply respect the rights and works of others.
Big tech, what will your legacy be?
My original article on this topic.
Miles Hunt full interview with RGM.