Casey Rae is CEO of the Future of Music Coalition.
Last week, the Recording Industry Association of America (RIAA) published its report on recorded music industry revenue in 2014. There are plenty of interesting data to consider, and the overall picture is one of an industry in transition. From the creator perspective, this is hardly news: musicians and composers have been adapting to almost two decades of technological change without a pause button.
The RIAA report is instructive to the extent that the trade association for the major labels presents an accurate picture of commercial activity around music. It is unlikely, however, to capture the breadth and diversity of business models and revenue streams available to today's artists. This is why Future of Music Coalition has spent considerable energy investigating how musicians and composers are making a living in the digital age.
Still, the RIAA report offers some valuable insights into overall industry earnings. One figure that has been touted is the 2 percent growth in recorded music revenue. These stats are welcome in an industry that has struggled with diminishing returns since shortly after the turn of the millennium. More encouraging is RIAA's claim of being more interested in licensing emerging technologies than waging war against them.
It's not surprising that the RIAA would put a positive spin on the report. Consider that the music industry has gone from $13 billion in revenue at its peak to $4.8 billion today. Musicians and composers may have less to celebrate, as it's unclear how much, if any, of that additional revenue will trickle down. There's also the fact that 2 percent growth doesn't even keep pace with inflation. The more encouraging numbers are around streaming growth, which indicates that listeners are helping to drive what may be the most significant format shift to hit music since the LP. The increase from 21 to 27 percent in streaming revenue from 2013 to 2014 suggests bigger returns to come, although it remains to be seen who benefits the most from this expansion. Right now, it looks like the biggest winners are the three major labels and a select number of superstar artists. Platforms are routinely criticized, sometimes legitimately, but their own sustainability is hardly guaranteed—especially standalone or "pureplay" music services.
Evolving the model or having alternative models may benefit creators outside of the mass-market. For that, we need accessible technologies and for artists and developers to work together to identify common challenges and potential solutions. This is where I'm the most hopeful. Emerging generations of artists grew up with the Internet and understand more intuitively how to use it to their advantage. Aligning the incentives of developers and creators may be easier where parties possess both competencies.
To the broader question of the sustainability of streaming, it's important to keep in mind that this is still a fairly young marketplace. In order to more accurately gauge how this transition impacts artists requires greater transparency and better data for tracking music uses. Right now, there are any number of impediments to having a more complete picture of this emerging economy. As the marketplace matures, there will hopefully be more opportunities to fine-tune the models, but that will be a challenge without transparency, uniform data standards and clearer information around ownership and artists' shares.
The RIAA report indicates that streaming is here to stay. I think that's good news. Now let's get to work to make sure that this brave new world of access offerers greater opportunity for all creators.
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