Source: Heidi Scherm / EyeEm / Getty
In 2017, the music industry had its best year since 2006 and amassed a $43 million profit bolstered by the rising streaming services and other factors. However, artists just earned 12 percent of the industry’s overall revenue of $5.1 billion.
A report from Citigroup looked at the data and found that while artists have continued to earn more than in times past, they are still outpaced by the collective of labels, media platforms, and the vast world of concert promotion. At 12 percent, it’s a significant 5 percent increase from 2000.
From the report:
In the U.S., the music industry generated $43 billion in revenue, matching the prior peak in 2006. While business-to-business (B2B) revenues (Music Publishing and Licensing) and music ads (AM/FM, YouTube) are flattish, consumer outlays (Concerts, Subscriptions) are at all-time highs.
While consumer spending habits are undergoing profound changes, the current industry structure has remained relatively static. That is, record labels are still record labels. Music distributors — Apple, Pandora, Sirius, and Spotify — are just music distributors. And, concert promoters — like Live Nation and AEG — are still concert promoters.
Artists’ share of music revenues is small. In 2017, artists captured just 12% of music revenue with most of the value leakage driven by the costs of running a myriad of distribution platforms — AM/FM radio, satellite radio, Internet distributors — augmented by the costs (and profits) of the record labels.
The report adds that concerts and live events are the main area artists thrive in the current economy.
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Photo: Getty
