The Major Record Labels Are Now Raking In $2.5 Million Per Hour

Major labels raking in a lot of money image

You’ll still find a large contingent of artists complaining about how little they make from streaming but it’s not hurting the major labels any. A study done MBW Review and Instrumental crunched the numbers to find that the majors are now raking in $2.5 million per hour, and are on pace to generate more than $20 billion in worldwide revenue this year!

In the first half of the year, this is an improvement of over 40% over last year, which is an amazing increase for what was thought to be a mature product. This includes all sales, streaming royalties and publishing, but it’s still a huge number given the expectations of the industry. No wonder major label execs are smiling.

In case you don’t know, the major labels include Warner Music, Sony Music and Universal Music Group. The study did not include revenue generated from Merlin, the independent label association that many are now calling the 4th major label.

Of the three, Sony Music Publishing is the largest publisher by a long shot, raking in $838 million in the first half of the year. UMG posted revenue was $683 million, followed by Warner Music at $381 million.

What does this mean? We can look at the above and come to the following conclusions:

  • The music business is currently in a good place. It wasn’t that long ago that many industry pundits couldn’t even imagine how streaming would ever get to 100 million subscribers and revenue numbers that would approach the best the industry has ever done. We’ve blown past 100 million and revenue is now coming from sources that no one ever dreamed of or could exploit before.
  • It pays to be a middleman. As always, getting a little piece (or in this case, a big piece) of the action as a middleman has been the secret to success in many businesses, and the major labels are no exception. While they can still boast an incredible infrastructure that can take an artist from star to superstar, it’s also possible for an artist to do so much more to boost their career in the beginning that can put them in a better position later when it’s time to sign with a major.
  • Artists always have to push for a better deal. While a brand new artist won’t be able to do this unless there’s a bidding war, any artist that’s already generated a fair amount of business without a major label should push for the best deal they can get. The labels are making a lot of money – it’s time for you to be raking in your fair share too.

The music industry is in the best place it’s been for about 20 years. By all indications, the good times should continue to roll for some time.

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