Have you ever downloaded a song and immediately wanted to purchase full album? Or seen a movie at a theatre and wanted to buy the DVD? How about buying a book just because its cover looks interesting? Now imagine all of those things, but with a song! It is not hard to see how much we value music nowadays. Thanks to the internet, finding songs to purchase has become as easy as searching for keywords and clicking on song links.
Value of a Download
With the world becoming a global village, it is no wonder that more and more people are looking to buy music online. According to a study published in The Future of Music Market by Blueshark Research, over 50% of all music consumers have purchased an album online, and that percentage is predicted to rise to 70% by next year.
While many will argue that streaming songs is becoming more popular every day, the fact is that only 4% of music consumers have downloaded a song in the last week, and that number is predicted to fall to 2% this year.
This decline in album sales is being attributed to several factors. Firstly, there is the increasing prevalence of “swipe-ups” and “clicks”. These are actions where a user clicks a button immediately after listening to a song, without purchasing the album. This was once considered to be a compliment (the so-called “like” button was actually inspired by this practice), but now it is considered to be cheating. Luckily, there are countermeasures that you can take to fight “swipe-ups” and “clicks” (more on this next point).
Countermeasures Against Downloads
In the past, album sales were declining, but that was because there were fewer and fewer ways for people to acquire music. It was either buy the CD at the store, or download it from the internet. Nowadays, with music being accessible to everyone and everywhere, we have seen a whole new wave of anti-consumerism emerge. Where once people might have gone to the store to buy a CD, they now might go there to complain about the industry that made them buy the CD in the first place.
If you are running a music-related business, you will want to take this trend into consideration. To preserve the value of your album downloads, you will have to fight this anti-consumerism head-on. The first step in this direction is to cut off all of the digital distractions. This includes keeping your music collection free of any ads, and using tools like UBB Code to replace all of the links on your site with links to online stores that pay you.
Further Deterioration of the Music Industry
It is not just the decline of album sales that worries music businesses. The industry as a whole is experiencing a creative crisis. Once the envy of the world, the music industry has become complacent and is now struggling for relevance. Bandcamp’s 2018 Music Industry Report states that only 2% of A-list musicians are actually signed to a record label, while 96% are self-published. As a result, album sales are in free-fall, dropping 76% in 2018.
The problem is that there is no clear direction for the music industry. The old ways of measuring success—albums and concert tours—are being replaced by a focus on streaming. In fact, since the rise of SoundCloud, YouTube, and Spotify, album sales have gone from being popular to being considered “old-fashioned” and “obsolete”. This has led to a decline in consumer confidence in the music industry, as evident in the below graph from Music Business Worldwide:
If this downward trend continues, the future of the music industry is extremely uncertain. What is important for musicians and music businesses is to find a place in this new world order, and this can be achieved by focusing on areas where consumers already seek out your content. Platforms like YouTube have established themselves as the go-to destination for fans of all genres, with over 1.9 billion monthly active users. If your song is popular on YouTube, it will be popular everywhere else, too.
This is where things get interesting…
The Power of YouTube
As we have established, since its inception, YouTube has been a platform owned by Google. While the company’s primary business is online search, it is clear that YouTube is a platform that they cannot afford to ignore. This is because YouTube gives them the ability to directly connect with millions of potential customers, with over 90% of users using the site to find music, movies, and TV shows.
In 2018, Google purchased YouTube for a rumoured $12.5 billion, and it was reported that Taylor Swift’s Reputation Stadium Tour earned her $40 million in just one day from ads on the platform.
It is clear that Google sees the power of YouTube in connecting with consumers and monetizing content. If your target audience is on YouTube, you are already on the right track.
Value of a Stream
While downloads and album sales are declining, there are still ways for artists to generate revenue from their music. One of the most popular and effective methods is through online streaming. Just like when you listen to an album at a physical store, you can now stream an artist’s music on the internet, and in some cases, earn money from the listeners.
In most cases, artists will sign a deal with a streaming service (such as Spotify or Apple Music) that gives them a cut of the revenue from users who listen to their music. As a result, online streaming has become a viable way for musicians to fund their lifestyles and continue creating music. As above, the streaming landscape has changed since the days of MP3s and CDs. While albums used to be the only way to listen to music, today, with music being accessible to everyone, it is the stream that is the norm.
While the music industry is going through changes, it is still a place where dreams come true for creative individuals. For those looking to break into the industry, continue honing your craft, and looking for ways to monetize your talent, online streaming is a viable option. The key is to find a way to connect with the right audience—no easy feat—and then to grow and develop that audience. Once you have established a base, you can pitch products to these users that will encourage them to purchase your album or concert ticket.