Streaming wont make up for the revenue lost by the lack of live gigs.
The Covid-19 pandemic boosted online music consumption like never before. Universal Music Group has recently reported that their streaming and subscription revenues grew by 15% to $4B in 2020, meaning they generated around $11M each day from streaming alone.
The market seems to be skyrocketing, streaming is praised as more democratic for all artists, it all sounds great in theory. But the question remains: can an artist (or label) rely solely on streaming for income?
I don’t think so.
Streaming can be a relatively steady source of income, but I believe it shouldn’t be the only one. Live events need to make a comeback, and fast. I’ve been managing an A-list techno DJ for more than a decade now and I can assure you that although recording revenue has gone up significantly, gigs are still by far the prevailing source of money
It increasingly seems that the streaming services have a broken business model. Users are not willing to pay more than $10 per month to access the entire library, artists want (and deserve) more money per play (with Spotify paying between $0.003 and $0.005 per stream, an artist needs around 250 streams to earn a dollar — and that won’t be paying the electricity bill any time soon), and shareholders demand dividends and high stock prices. I’m afraid that the recording music revenue will only get slimmer for the artists, and they will need to find a way to leverage their listeners to boost their appeal to promoters.
Things are changing, though.
Just two weeks ago, SoundCloud announced that it will start paying artists royalties according to “the overall listening time” instead of the number of times a track is streamed. Simply put: the more fans and listeners an artist gets on SoundCloud, the more they get paid.
Though SoundCloud’s new model invokes a similar logic as inviting people to a gig, it can’t substitute it fully. While we wait for governments and organizations to create some sort of safety net for musicians and organizers, we can do our best to help support them. Our platform has a few neat ways for optimizing one’s online efforts, and we’re always happy to hear new ideas.
About the author
Vasja Veber is the Co-founder and Business Development Director at the music data company Viberate as well as Music Manager with a wide industry network, including being a member of the Recording Academy with Grammy voting rights. He regularly speaks at the biggest music conferences and events around the world.