Plenty of industries have had to change the way they do business because of the digital revolution but very few had to adapt as much as the music industry has. Where record sales and the radio used to dominate neither of those are really relevant today with digital music streaming all over the internet. While the industry has had to adapt they are still stuck between the old way of doing business and trying to figure out how to survive today. Here are the 4 biggest challenges the music industry faces today.
Figuring Out the Data
Data and how it is stored and maintained is still something the music industry is trying to figure out. When it comes to things like reporting of royalties and usage to musicians, songwriters and recording companies, it is extremely difficult to get an accurate picture. There is no transparency among streaming services and artists don’t have the ability to audit the data that the streaming service provides.
There is no central database of record of who is entitled to benefit from music. While almost everyone in the industry agrees that such a database should exist, they can never agree on who should put it together, how it should be built and of course no one can agree on who should pay for it. That will continue to be a challenge going forward as streaming services evolve.
Figuring Out the Money
For the average person wanting to listen to their favorite song they simply head over to Spotify or Apple Music and start listening. However nobody ever wonders how or if their favorite artist gets paid from those services. The debate on how revenue is shared has been around since the beginning. Most of these companies offer revenue sharing arrangements with artists and record labels, this isn’t working and they need to figure out a system that does. Here is a breakdown on why the this isn’t working.
Making a Better Service
Take the 3 biggest digital music services today, Spotify, Pandora and iTunes they have pretty much the same catalogue of music and the pricing is the same. How do they go forward? How will they integrate with other entertainment platforms? How do they evolve and stay unique.
Even today marketing for music is still done by the big record labels. However what they are looking for now is revenue generated at a release date. The first month of sales are really all they are concerned with and beyond that the marketing stops and the marketing department starts looking for the next big release. This is great for the record label and nobody else.
As music moves toward streaming services and the listener is offered more choices than ever before, they need to concentrate on sustained listening to continue to generate revenue. There is no doubt of the changes in the industry and that there are still some growing pains it will have to get through.