The Current State of the Music Industry amid Covid-19
Coronavirus turned everything upside down in 2020 and has been affecting our civilisation since then. The pandemic has left the cultural sector in ruins worldwide, which includes the core of the Western music industry as well. Tremendous amount of live concerts and music festivals have been cancelled, including Coachella (US), and Glastonbury (UK) too.
The crisis has forced several music venues to close indefinitely, and two-thirds of these venues would not reopen in the future at all due to financial bankruptcy. So, it can be said that not only the careers of artists, songwriters, composers and session musicians have been jeopardised by the pandemic but of all the staff of venues, concert halls, and festivals in the sector of the live music industry.
Online Streaming Thrives
Since the restrictions that governments put in order to tackle Covid-19 worldwide, millions of people have been stuck at home without having even the slightest chance to do social activities, which would include, for instance, attending live gigs. Although, online streaming platforms, such as Spotify or Apple Music, are still able to provide us the shot to listen to our favourite bands. In fact, because of the period of social distancing and self-isolation, online music streaming has become even more popular than it has been ever before.
According to the article by Tim Ingham, Warner Music Group made over $3.8 billion in recorded music revenues last year and over 60% of it came from music streaming platforms like Spotify, Apple Music and YouTube. Though, it is only about the profit of one major record label made in 2020. Overall, online music streaming generates approximately $8.5 billion each year worldwide and since the beginning of the pandemic its growth significantly increased. It is probably because of the increased demands of listeners who have been staying at home for months due to the critical circumstances that Covid-19 has caused.
The Business Model of Spotify
There are several online music streaming platforms but in this section I intend to speak of Spotify exclusively. The Swedish Stockholm-based company was founded in 2006 by Daniel Ek and Martin Lorentzon and by the 2010s it became one of the biggest music streaming platforms globally.
To independent, unsigned artists who wish to establish a strong fanbase, Spotify has a lot to offer. If you release songs independently, online streaming platforms can come handy to reach your fans. Therefore, you even have the chance to make profit as an unsigned, unknown artist without being dependent on a record label that might exploit you without hesitation.
The internet and the technological developments definitely helped unknown artists and songwriters to get their career started. That is true about Spotify and other online music streaming platforms, however it is still not easy to make a significant profit if you do not already have a solid fanbase.
Spotify pays artists €0.0027 per stream. The minimum monthly wage in Ireland is currently
€1706.9, so how many streams would an artist need to get in order to make the equivalent amount of money to the minimum monthly wage? According to my calculator, you would need roughly 632.185 streams to make the same amount of money as the Irish minimum wage, which is crazy, if you ask me. So, this sort of business model is only beneficial to those artists who already have a massive fanbase.
Is a Radical Change in the Music Industry On the Way?
I did not write the previous lines to discourage anyone. Even the smallest sunshine does break through the thickest, darkest storm clouds. Covid-19 showed us how fragile our world really was and how all we knew and were used to might vanish overnight. It is the same with the way the music industry worked. The pandemic may even force the industry to replace the “old” business model with a new one in the near future that perhaps could become more beneficial to independent artists as well.
Nothing is constant yet; I believe it is not a problem at all. Change is good; it keeps us in the motion. All we need to do is to go with the flow and look forward and maybe that hope might be found in helping independent artists through the hardest of times.
