The music industry generates nearly $50 billion in sales per year, but only a small percentage of that ends up going to the artists. However, data and advanced analytics are giving artists more options and are making the independent route more attractive.
Industry pros already understand the value of data, and that’s why Apple, Kobalt and Warner Music have all invested in data analytics startups in 2018 alone. But the reality is that artists also need to realize they have the most precious commodity at their fingertips. Data and analytics can actually help them succeed without the big budgets, flashy music videos, or outside help.
The market is now pivoting toward the millions of undiscovered music creators and artists who finally have access to a global audience of millions without needing to sign to a label. Record labels will still have a place in the industry, but the door has opened for emerging artists to do just about everything on their own.
Automated fan growth is changing the role of promoters
It’s no secret that artificial intelligence and machine learning are changing the way music industry professionals use data. Labels have been able to target specific audiences and make more informed business decisions for their clients. Today’s technology can help artists automate key aspects of music creation, including songwriting, and use data to achieve smart automated fan growth.
Typically, bands can spend upwards of $100k for a campaign that promotes a residency at a major worldwide venue using traditional scattergun techniques like billboards, TV and radio ads. For example, alternative rock duo Pomplamoose, shared their story on Digital Music News, detailing how they spent nearly $150,000 on a month-long tour without a record label. The band’s tour brought in $135,983, and it wasn’t enough to cover their expenses.
With today’s technology, artists can now spend as little as $3,000 to target the right fans who are more likely to listen to a particular song or buy a ticket to an upcoming show. Therefore, the role of music promoters is significantly changing into a more logistical and scientific process.
Promoters now need to capitalize on the data that they have without spending too much time trying to discover the unknown. This means they will need to start seriously considering their artists’ ad spend and re-evaluate how to allocate budgets in this digital world. Artists need to recognize that this is something they can take advantage of on their own as well, just as new technologies have allowed them to automate other areas of their careers.
Artists will earn more revenue
Streaming has taken the music industry back into growth. This growth is ongoing, with Futuresource estimating that the market has the capacity to triple by 2022 to nearly 235 million listeners. The industry’s shift to digital and do-it-yourself models means more data, and as a result, more revenue for artists. For example, in September, Spotify announced its beta program that is currently invite-only, which lets artists upload their music directly to the platform instead of through a label or digital aggregator. Spotify says it will offer artists 50 percent of Spotify’s net revenue and 100 percent of royalties for the songs artists upload directly.
Following that announcement, SoundCloud said it will allow its creators on its Pro subscriptions to distribute their music directly to streaming services like Apple Music, Spotify and Amazon Music, and each artist will get 100 percent of earnings back from each streaming platform, while SoundCloud won’t take a cut. These up-and-coming DIY features will provide artists with even more data and insights directly, and AI and machine learning will supplement this change we’re seeing in artist discovery and management.
The ability to manage music independently, combined with the massive amounts of data from the tools that provide valuable insights about listeners, should be an encouragement to artists – why should they wait in line for their big break so early on instead of taking control by getting a head start until a label opportunity arises?
Emerging artists will climb the venue pipeline at a faster pace
Every artist has to start somewhere. Those who “made it” independently are few and far between, but they’re still proof that artists can take control of their own destinies — and without a hefty budget. Chance the Rapper rose to fame through word of mouth and strategic collaborations with other emerging artists, and he quickly made the bigger stages like Bonnaroo Music Festival and “Saturday Night Live” and released the first ever streaming only album to win a Grammy Award.
When O.A.R. formed more than 15 years ago, the band members started playing as many shows as they could. They knew that college fraternity and sorority audiences were paying attention, and they capitalized on that when they were devoting time to their music. Today, data and analytics are accelerating artists’ journeys along the venue pipeline.
Brother Strut, an English funk & soul band, had a budget of just £2,500, but sold out London’s legendary venue KOKO, with no label or promoter. Rather than announcing a tour and spending at least six figures trying to engage hit-or-miss audiences nationwide, which is the traditional method of the business, the band used social media data to identify their most passionate fans, and then focused on them. Brother Strut has since sold out more venues in London, including Scala, Ronnie Scott’s, and Camden Jazz Café. It’s up to artists to harness the power of data and analytics and take control of their own destinies.
The market is quickly changing and data provides a win-win situation for everyone in Music Industry 2.0. We will surely continue to see a change in artist discovery and more personalized experiences for fans, but artists need to stop waiting for their time to shine. With data and analytics, their moment is now, and their careers will only continue to evolve for the better.