Music creators Slicing the funnel

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The 20,000 foot view:  Streaming enabled the rise of the independent artist and then the rise of the music creator. The promise of the long tail finally appeared to be realised. But the pandemic’s disruption of live music catalysed an already growing realisation among long- and mid-tail artists that they lack the scale to benefit from streaming economics. The music creator economy is at a tipping point, with ever more creators realising that the activity funnel towards streaming is better considered as a series of discreet slices, each of which can deliver better returns for them than the streaming end point.

Key Insights

• Streaming is highly effective at monetisation (forecast to reach        billion in label trade terms FY 2021) but has a remuneration problem for mid- and long-tail artists
• Streaming’s superstar economy favours large rightsholders and artists –        of artists account for        of streaming revenue, while        of artists generate       
• Streaming democratised listening, but there is a tension between satisfying fans and creators – listening fragmentation risks not enough income concentration for anyone
• The superstar artist economy is not constrained to streaming.        of global artists account for        of recorded music revenue
• Only        of music creators make it through the recorded music industry’s funnel, meaning that most of the creator economy happens outside the traditional business
• The label business is but a small part of the wider market, dealing in tens of thousands of artists while the creator business deals in tens of millions of creators
• The traditional music business is defined by the pursuit of fame and fortune . The creator economy is striving for recognition and remuneration
• Creators are using the streaming funnel as discreet slices, often better geared for building fan engagement and creator remuneration than streaming itself
• Fleeing creator burnout, artists will look for fans on platforms with higher and more immediate ROI, in turn reducing the cultural capital of streaming, adding to TikTok’s impact
• The slicing of the funnel will create a diversification of creation and business, with a focus on fans and remuneration over audience and scale

Companies and brands mentioned in this report: Airbit, Avid, AWAL, BandLab, Bandcamp, BeatStars, CD Baby, Chelsea Cutler, Discord, DistroKid, Fiverr, Instagram, Kenny Beats, LANDR, Monique Winning, NetEase Cloud Music, Only Fans, Parlophone, Patreon, PinkPantheress, Rapchat, Shorts, Sony Music, SoundBetter, SoundCloud, Splice, Tencent Music Entertainment, TikTok, TuneCore, Twitch, Universal Music, Virgin Music, WMX, YouTube, Zola Jesus