Misaligned incentives The cost of a broken business
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20,000 foot view
Many of the music industry’s current woes can be traced back to misaligned incentives. Current streaming economics push record labels, streaming services, and artists in conflicting directions: Labels chase viral songs to grow market share, streaming services are motivated to lower the cost of licensing music, and artists must venture outside the system to earn meaningful revenue, among other examples. MIDiA’s Misaligned incentives | The cost of a broken business report first unravels how we arrived here, and how this has set the industry down a path where short-term wins are favoured over long-term sustainability. Recognising that the industry cannot escape this zero-sum game without fundamentally changing the incentives, the report then proposes an alternate path that would realign stakeholders and bring about a healthier business for everyone. This includes highlighting major changes on the way to artist development, marketing, and what it means to “break” an artist, with recommendations for streaming services, labels, and artists.
Companies and brands mentioned in this report: gecs, Anna Redman, Bachelor, Lil Nas X, Rick Rubin, Rina Sawayama, TikTok