Digital music could be a world of opportunity for many talented creators and producers who were squeezed out of the old world of manufacture and inventory limitations. One click to listen, one click to buy, and any number of new ways to connect creators and their market mean discovery, information, and transactions are virtually costless.
Music is indeed everywhere in the digital world, and a great number of services have been developed to help musicians turn their craft into a business and hopefully a career. One of the most striking features of the last decade of digital music is the growth in the inventory available. Here’s what one music platform says about the choice on offer:
Choose from over 25 million high quality tracks in our store; download, sync and play your music on the go. (7digital)
Just 10 years ago Apple launched the iTunes store:
The iTunes Music Store features over 200,000 songs from music companies including BMG, EMI, Sony Music Entertainment, Universal and Warner. (Apple press release)
So where has all this music come from, and what kind of music is it? And, for those contemplating adding their own recordings to the world’s 24/7 jukebox, what can the people who make all that music expect out of the market?
One thing is totally clear; most new music is not coming from the global businesses that used to be called the Major Labels, now down to three after the sale of EMI to Universal Music. Competition authorities were interested in the deal because it would strengthen Universal Music’s ability to control innovation in retail by withholding critical catalogues, not because there would be a shortage of music. Anecdotally the remaining Major labels, UMG, Sony, and Warner, have between 1 and 1.5 million tracks each in the market, and are adding thousands but not millions per year.
Other large sources of music include aggregators of distribution rights, such as The Orchard, now connected to Sony. In 2008 The Orchard, then a public company, filed reports claiming rights in a million tracks. These days it claims:
The Orchard is a global leader in music and video entertainment, representing over 3.1 million music tracks
So that is 2 million new tracks in 5 years, coming from many small independent labels and artists. An artist focused service, Tunecore, has some similarly impressive numbers, claiming recently “more than 849,000 artist and label account holders”. Even if many only release one track that is a lot of music. The company recently rather dispiritingly started a blog post with “TuneCore Artists are releasing tons of new music every day.”
Orchard rival, IODA, which it bought in 2012, claimed 2.1 million tracks, having started at zero in 2003. A number of smaller companies bring catalogues from the hundreds of thousands to the low millions, and much of this new music is now produced by self-funded artists.
Few of those artists have access to professional recording studios, so unsurprisingly orchestras don’t feature strongly, and nor do choirs. Typical new music is predominantly wholly electronic, with perhaps a vocal or single line of instrumental solo. Some also seems relatively anonymous. A difficult question these days seems to be ‘what do you put in the artist field?’ This lot put KoolSax:
The release schedule seems to be more about getting as much as possible out of as little as possible rather than a reflection of an artistic journey. A great deal of creativity is going into titling the compilation albums.
So what kind of market awaits those KoolSax tracks? The IFPI puts the digital market at $5.6b for 2012, and growing at about 10% per year. So let’s say $6b to make the sums easier, and divide it by the 25 million tracks to find that the mean revenue per track is going to be $240 for the year. That looks almost worth switching a computer on for, but of course markets don’t work like that.
I recently looked at a set of streaming data and found that only 10% of tracks were streamed once or more over a six month period. That would suggest a median value of zero, and indeed a 9:1 probability of earning nothing over the six month period for any track selected at random. Extrapolate (a dangerous hobby for sure) and that gives us a global ‘earning’ catalogue of approximately 2.5 million tracks this year. Our new mean revenue, once we have discarded the dead weight repertoire, is of course now $2400, or $200 per month.
So that is what the market seems to be saying. As a creator you have a 1 in 10 chance of a pop at $200 per month. Creativity in titling your tracks and your compilations seems to be as important as the music itself. The music had better be cheap to make, and you should find multiple ways to sell the same track or set of stems. You might end up in the belly of a huge distribution beast to whom you are economically insignificant.
Most people when asked how they compare to their peers claim to be better than average. Today’s music market looks like it rewards the second quartile no better than the third or fourth.