How is the Music Industry going to make money?

From the very beginning of the “Record Label” we know that a label made money by SELLING and distributing records. Plain and simple. The very minute the world went digital there has been a devestating collapse in revenue specifically in selling records. Spotify, Pandora and other streaming services are usually considered the bad guys. The industry blames them for the lost of revenue. Times magazine calculated in November 2014 that an artist’s stated payout range is $0.006 to $0.0084 per stream. Before Taylor Swift pulled her music off Spotify her chart breaking hit “Shake it off” streamed 46.3M times with only a pay out between $280k-380k. Sounds ridiculous but consider this, although an artist such as Taylor swift is making peanuts through Spotify services, there is a gain elsewhere. The terabytes of specific data being collected through Spotify is unfathomable. Spotify now knows that Sarah Smith currently lives in San Diego, CA, 25 years of age, in a happy mood and on her afternoon jog is wanting to listen to “Shake it off”. At Taylor Swift’s level of success this information is automatic but for a DIY band out of Boston now can promote, market and shape their tour around this information. If the Boston based band is getting the most streams out of Chicago at the age demographic of 18-20, performing a concert at a university in Chicago could be a very valuable show.

Which leads me to my next point. The industry’s last hope of survival is live performance. The EDM scene seems to be getting it right. Music Times calculated the Calvin Harris will walk away with $400k per gig in his New Hakkasan Deal. EDM festivals such as Tomorrowland, Electric Daisy Carnival, or Sensation bringing in hundreds of thousands of fans have shown huge strides in changing live performance. Selling albums is no longer the main focus but selling tickets at a bare minimum of $100 is top priority. In order to do this, millions of dollars needs to be invested into a production of  a live performance that is so monumental and life changing to an attendee that it could never be reproduced in any other form. On the other hand a website called Sofar is a live performance/streamed based platform shifting live shows into a more exclusive setting. Once you join the free membership, hundreds of exclusive  shows all over the world are now available to purchase tickets. Choose the city you are in and see the next show; the only catch is that you don’t know the location until the day before nor the artist you are seeing until the day of. This platform is a genius way to help people discover new artist in a social setting that can be just as impactful in their lives as a mega show but without the millions of dollars being invested into a production for one night. How amazing would it be to see one of your favorite artist perform in a living room big enough for maybe 20 people?
Until the next best thing, the way I see musicians making money in an industry as loved but taken for granted as this one, is innovating a live experiences so spectacular, big or small, that it will never be forgotten.

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