Recorded Music Had A Great Year – Or Did It?

If you look at the 2024 recorded music market numbers just released by Media (see the graphic below), you’d think that the music industry is prospering more than ever. Data can be interpreted various ways though, and what some see as a victory, others see as a big red flag.

For instance, there was a 6.5% growth over the year before up to a total of $36.2 billion, a figure that many gurus thought impossible just 10 years ago.

That sounds good in and of itself, but the fact of the matter is that the rate of growth has fallen about 3% from the year before, and streaming revenue was down a bit more than 6%

So what does all this mean?

First of all, music streaming revenue and growth has flattened out. Just about everyone who was going to subscribe to a music service is doing so already. In fact, that figure is about to decrease as people with multiple subscriptions shed a few to get down to just one, and others retreat to the free tier.

Second, major record labels are now intellectual property managers. Signing new artists is too risky for them, while managing catalog is easier and lower risk. Gone are the days of artist development. If you’re an artist, you’re on your own, which is how more and more artists want it these days.

Third, $36 billion is a lot of money to be sure, but how much of it actually trickles down to the artists? It’s less and less as streaming platforms do everything they can to pay lower royalties, while the major part of the royalties end up in the hands of labels and publishers (and a few superstars) instead of the artists that could really use it.

And the kicker – major labels and publishers, and even performance rights organizations, are now owned by private equity firms, and that only means trouble for everyone but the stockholders. There’s no upside for artists here.

The Revolution Is Coming

This is a volatile mix that won’t sustain for long. Artists have already found alternatives to labels, and they’re coming for Spotify next. When Spotify execs are selling stock for hundreds of millions of dollars while artists earn only hundreds, people begin to take notice. Don’t be surprised to see a mass defection from the platform.

The next new trend is music is likely to break the current paradigm in more ways than one, and it won’t come a moment too soon.