Would you be willing to install a microchip in your body that would provide you with key health information to assist you with your diet, fitness or to control disease? A few years ago, I probably would have answered in the negative. Today, I might seriously consider it.
What does this have to do with the music business?
It reinforces the fact that humans are adapting to new technologies and methodologies faster than ever before. Ten years ago, the concept of paying $9.99 a month for a streaming service would not have been considered a viable option. In 2015, more and more of us have accepted the idea.
So, 2015 in summary: streaming platforms continue to show significant growth; social media got noisier and many platforms have become pay-per-play; crowdfunding is the norm; the sharing economy is now fundamental to artists; and outsourcing has become a key tool for artists.
On June 30, 2015, Apple Music was finally launched as an answer to other streaming platforms like Spotify, Google Play All Access, Deezer, Tidal and others. In 2015, Spotify added 5 million more paid subscribers from 15 million in January 2015 to 20 million in June 2015, and Deezer increased to 6 million (per statista.com). Apple Music added 6.5 million subscribers (per recode.net).
The good news is that streaming subscriptions are supposed to pump millions of dollars in revenue into the music industry. Some say this will ultimately change the habit of pirating music to paying for music.
The economic benefits have yet to be realized from streaming, as it is cannibalizing music sales, whether digital or physical. As it stands, many artists are learning that the average payout of $0.005 per stream is nowhere near enough to replace lost album and single sales. That’s why higher profile artists, such as Adele and Taylor Swift, are opting out of streaming services.
The final numbers aren’t in, but I suspect that music sales will continue to grow in 2015 compared to 2014. I also suspect that those numbers are heavily skewed, due to the fact that Adele and Taylor both had a record-breaking year.
The fact that higher-profile artists aren’t buying into streaming doesn’t mean that streaming isn’t here to stay. It just means that higher-profile artists will have more leverage that gives them the ability to make more money.
It will be interesting to see how streaming affects the economic environment in 2016. While it’s supposed to bring more economic benefits to the music industry, the streaming platforms are also becoming a vehicle for new artists hoping to be discovered.
Social media continues to be an effective and affordable way for artists and music businesses to market themselves. But with each passing year, social media is getting nosier and nosier. Twitter is like shouting in soccer stadium full of 80,000 people.
Facebook has officially become pay-per-play. That said, you no longer need thousands of followers. All you need is a Facebook page. You can create direct ads that target any audience you want, which is a powerful tool.
Instagram has officially launched its own advertising service. What you need is a Facebook advertising account.
If you plan to make some noise in 2016, I suggest setting aside a budget to pay for ads.
More and more bands/artists and businesses adopted crowdfunding in 2015, especially when they were releasing an album or an EP. The projection for 2015 as a total market was supposed to be $20 billion, a supposed increase of $10 billion from 2014. Once the dust settles, it will be interesting to see how artists fared with crowdfunding.
That said, just like any other platform, the more people who use it, the harder it will be to become successful.
The Sharing Economy
In 2015, the sharing economy continued to show significant growth and allowed many artists and musicians to achieve more with less. Nowadays, while touring or attending festivals, artists and bands can find affordable alternative solutions to accommodations and travel. More and more artists are using the following tools:
Airbnb and Homeaway: Artists are finding incredible deals that allow them to visit cities and perform while staying in affordable, well-maintained rooms, houses or apartments.
LendingClub in the USA and the Lending Loop in Canada: Need to borrow money or get a decent return on your income? These platforms are making a difference for people in need and for people who want to make their money work for them.
UBER: Need an affordable way to travel in certain cities in a time effective manner? Artists are finding this method of travel much more convenient and affordable, and that it offers better service.
Fon: Access to WIFI hotspot globally. Not available in Canada or the US, but if you’re touring Europe, this might be a great solution for staying connected.
Poshmark: Need to stay in style? Check out this clothing-sharing site. Only in the USA.
More of these platforms will be coming online in 2016. It will be interesting to see how things evolve.
Build your team by Outsourcing
The year 2015 also saw outsourcing become accessible to anyone, especially artists. Artists are building virtual teams to assist them with social media marketing, graphic design, editing services, press releases, website development, video production and much more.
Some of the most popular outsourcing websites include the following:
Many other websites provide similar services, and they all enable an artist to build a virtual team at a price they can afford. While some artists use these websites to build teams, some use them to earn extra money by offering their services. Want to sell jingles, sell graphics or editing services? You could do this on any one of these websites.
We live in a time of hyper-change. I’m sure that 2016 will bring more of it.