How Spotify saved the music industry

Author

Andrew Southworth
July 24, 2023

Hey friends!

Imagine it’s the year 2,000. CD’s are still everywhere but many people are using sites like Napster or Limewire to illegally download music.

Apple launches iTunes in 2003 as a way to allow people to legally download music and still pay artists.

Despite this piracy is rampant for years (technically it still happens today) and demolishes revenue from music recording.

Spotify is founded in 2006, enters the UK in 2010 and the USA in 2011. At this point in time global recorded music revenue is half what it was 10 years prior.

Nowadays we all complain how music streaming doesn’t pay well, and many people specifically call out Spotify for this since they’re the most dominant player. However one important point is lost today…

Spotify was not created to pay music artists well, it was created to eliminate music piracy.

The idea was to make something so incredibly convenient and affordable that illegally downloading music wouldn’t be worth it anymore to most people.

At least this would generate some revenue for the rights holders, instead of nothing, right?

Well… 20 years after the peak where physical music was king, that bet finally paid off. Streaming saved the music industry.

You might notice that graph goes to the year 2030, thats because this graph is from the Goldman Sachs report Music In The Air.

In the report they compare the year 2018 to their projections for the year 2030, and the predict a doubling of streaming adoption in developed markets and a tripling of streaming adopting in emerging markets.

In addition to this, they’re also estimating recorded music is going to become even more important than it already is in comparison to live music and publishing.

Additionally they show that Gen Z and Millennials are spending more of their annual budgets on music than other age groups.

This is interesting and all, but you might be wondering what can you do with this information?

Well, keep in mind these are just projections. But to me this implies investing in streaming growth is likely a safe bet.

Digital and physical recorded music revenue will likely only continue to fall over time, but streaming is still in growth mode. You can still sell digital and physical music but betting your future on dying mediums alone is likely a bad idea.

We don’t know if any other disruptive technologies will come along and kill streaming either though. Several years ago many people thought NFT’s and Web 3.0 were going to cause a disruption in the music industry, but nothing significant happened.

Companies like Audius promised a more fair royalty system, and then they turned around and built a platform that pays 99% of artists $0.00.

New Content

Spotify redesigned their active audience feature and replaced it with segments.

Many people get confused with what playlist adds are in Spotify for Artists, and why the playlist numbers don’t seem to ad up. Additionally I show how you can get additional Apple Music stats in DistroKid stats.

In case you don’t know, I have a podcast! Currently there are 43 episodes and it has over 20,000 downloads.

New episodes!

Recently i’ve been posting a lot on Twitter:

News

Here are some music industry news highlights from the past week.

  • Spotify is (finally) raising prices from $9.99 to $10.99 in the US this week. This followed after both Tidal and YouTube Music raised prices.

  • 15% of the US population are what you’d consider ‘superfans’ of at least one music artist.

  • TikTok Music expands to Australia, Mexico and Singapore.

Quote of the Week

❝

Success is not final, failure is not fatal: it is the courage to continue that counts.

Winston Churchill

I’ve been fortunate to talk to many successful people over the years, either as music artists or in business. The three things they consistently say are:

  1. They’ve failed many more times than they’ve succeeded.

  2. The only reason they achieved what they have is because they never gave up.

  3. They never truly feel like they’ve ‘made it’.

Whenever you’re ready, there are 4 ways I can help you:

  1. My courses. Spotify Growth Machine teaches you how to use Facebook ads to promote your music on Spotify. YouTube Growth Machine teaches you how to grow a YouTube channel organically and how to use YouTube ads.

  2. My ad agency. Forbid Media specializes in running Facebook conversion ads to promote your music on Spotify.

  3. Website / Store / Funnels. MusicFunnels is the best all-in-one platform for music artists to make a website, online store, sales funnels and build their mailing list.

  4. 1-on-1 consulting. You can book 1-hour calls with myself or Alex Bochel here.

My Links:

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If you’d rather just purchase the e-book, or physical book or audiobook you can do so here.

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