The music industry made $43 billion in 2017, but artists only took away 12% of it
Musicians’ struggles in today’s industry are well-documented. Royalties have plummeted as a result of downloading or streaming, with extended touring taking place of beatmaking as the prime form of income. On top of all this, the teams behind these artists also have to make a living, cutting profits further.
It comes as no surprise, then, that Citigroup’s latest report on the music industry economy asserts that musicians only took home 12% of the $43 billion in revenue generated industry-wide in 2017. The cycle is a cruel one — creators often rely on publishers, tech companies, and other team members to help get their message out and allow them to make a living through their craft in the first place. However, the cost of this success is that these outside parties suck up greater amounts of income in return.
Citigroup didn’t paint an overly grim picture with its reporting. In fact, it posed potential paths of redistributing some of the revenue to the musicians that helped generate it in the first place. It foresaw two potential vertical integration models, with one pointing to promoters and platforms like Spotify merging together. Or, Spotify and its ilk will cross into the label space as another form of vertical integration that would benefit artists. Finally, Citigroup also posed a horizontal model where different distribution platforms merge with one another.
Also, the fact that artists are taking a 12% stake in the industry is good news in itself — in 2000, that number was at 7%. The report attests this to the increase of royalties via streaming subscriptions, and also growth within the concert business. Only time will tell how the industry evolves to tip the financial scales back in the artists’ favors.
Photo credit: Eva Blu