Independent music streaming revenues grew at more than double the rate of major labels, recent research shows.
Midia’s recent report states that Major labels lost 3% of market share to the Independents when it came to Spotify streams last year. Not a huge number, you might think, but this 3% is just the tip of the iceberg.
What this really represents is a growth rate in the independent sector far higher than anything seen across the major label landscape. You see:
In 2018, Spotify revenue across the three majors (Universal, Sony and Warner) was 4.1 billion US Dollars.
This increased to almost 5.2 billion in 2019, a growth rate of 27%.
When we look at Independent labels over the same period, the financials are far more modest; 573 million US Dollars in 2018, rising to 904 million in 2019. However, that’s a year- on-year growth rate of 58% - more than double the growth rate of the majors.
And that’s just the independent labels - what about the artists doing it all themselves? 2018 saw independent artists collectively generating 285 million US Dollars, rising to 421 million in 2019. That year on year growth is outperforming the majors by 21%.
Why are we seeing this?
The rise of artist tools (cited in this Midia article) has a lot to do with it. Artists haven’t needed labels to get access to distribution, marketing or recording services for a while now, thanks to advances in technology and the shift to digital when it comes to music consumption. Why sign a deal, foregoing revenue, when it’s entirely possible (but still challenging if you’re not sure on the processes) to do it all yourself?
So what does this growth actually mean for labels? Interestingly, there is one major benefit. With all these artists doing it for themselves, - perfecting their music, look and fan engagement with the aid of these online artist tools - there’s a huge pool of already developed acts, ready for the kind of amplification a great label team can give.
That represents a huge saving in time and money and frankly helps bypass the riskiest bit of the business. The new challenge lies in finding them before anyone else.
Ultimately, the goal of scouting is still the same as it ever was - find “the next big thing” before any of your competitors do. But with nearly 300,000 new tracks uploaded every single week to streaming platforms it’s getting harder and harder to do that.
At Instrumental, we think the trick to artist discovery in the new age is in the data - what we call digital scouting. We believe in it so much that we’re offering FREE digital scouting workshops to any music business who wants to re-think the way they are working. Interested? Get in touch here for more information.