Best Music Spotlight

The World of the Multi-Channel Music Consumer

Photograph of the blog post author, Music Gateway Team

Music Gateway Team


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Some of us may remember the days when we only had one or two options to listen to our favorite tunes. Maybe you jammed out listening to vinyl or the radio or your dorm was stacked with CDs from floor to ceiling. Those days are long gone, and today you are just as likely to listen to your favorite music on any of a dozen different channels from YouTube to an iPhone app to Pandora. How did we get here? And which channels should musicians use today to reach the broadest audience?

A Digital Bizarro World

The Internet and the impact of digital technology on the music industry has bred this interesting borderless music society where any musician reaches millions of fans for free but earns virtual peanuts for their efforts. This reality of instant fame and little revenue has affected the music industry substantially, but has also affected other forms of entertainment like Hollywood films and book publishing. Perhaps the only industry that has ridden the waves of change with incredible success is the video game industry, mainly because those involved embrace technological change and gamers are a rabid crowd willing to dish out $60 for an interactive immersive experience.

In some ways, the music industry’s recent decline in revenue is a product of public perception of value. Thirty years ago consumers gladly dished out dollars to pay for the latest album. Their favorite artists were only available in a few channels, and analog “copies” had low sound quality. But this changed with digital filesharing.

There is a tangible difference between owning a physical album in your hands and “owning” a digital file. Consumers are savvy. They understand that each individual physical album costs money to produce, but in a consumer’s mind a file can be quickly cloned without any perceived immediate cost. Most consumers are not willing to steal a shopping cart full of vinyls out of a store, but copying a friend’s entire digital music library? It seems harmless. Swapping digital files became something almost American, a way to enjoy music without benefitting what consumers saw as predatory record companies.

Piracy in the early days of the Internet (remember Napster?) unveiled a portal to the future we now experience, where music is nearly free and music industry moguls are scrambling to either adapt or die trying. While piracy continues to affect entertainment industries, decimating international market sales, it is the legal “pirates” of digital streaming who are the targets of the music industry today. The global music market has fought against music marauders like YouTube and Spotify by pushing for the legal rights of the artists and the industry that represents them and for policies that are more lucrative for music makers. The Apple Music snafu with Taylor Swift, where she threatened to pull her music because Apple had no intention of paying any artists during the Apple Music trial period, shows that when you have influence, even Apple will listen.  

Which channels are most successful?

When you look at total global revenues, you can quickly see that musicians need to redefine success. Is success viewed in terms of monetary value, the number of YouTube, several million streams on Spotify, or sold-out live shows? How can you quantify success?

In terms of popularity, digital streaming services have seen an incredible uptick in the last year, with music consumption in the US growing by over ninety-three percent, according to the Global Music Report 2016: State of the Industry. Meanwhile, physical sales like vinyl and CDs dropped another ten percent, although they still make up a hefty part of the profits. Other forms of revenue, like synchronization, only make up a small percentage of profits.

So are streaming services the savior of the music industry? Well, not so fast. With streaming services, a music consumer pays nearly nothing for access to almost unlimited catalogues of artists. These services include Apple Music, Pandora, and Spotify. Financial success of the platinum kind remains to be the domain of managed artists like Adele, Justin Bieber, and Drake, who rake in millions in profits each year, regardless of the poor profit margins of streaming services. Increases in performance rights have grown slightly as the music industry attempts to play catch up. Partnerships with name brands like Coca-Cola provide an additional revenue stream and just another channel to reach fans. Performers like Katy Perry, who has over 86 million Twitter followers, take advantage of social media platforms to spread the word about their music and engage fans.

If indie musicians want fame, then video may be the answer. Musicians with the talent to create high quality video content have found that video streaming through YouTube gives them access to millions of fans, increasing chances of profit and visibility. A select few of these artists end up signing on with big name record companies like Sony or Universal. Hit songs like Adele’s Hello and Psy’s Gangnam Style blow up the Internet, generating billions of hits online.

And the Loser is? A Look at the Value Gap

No matter how you look at it, physical sales have declined substantially from the days when teens used to shell out $16 for a favorite CD. Today music consumers are literally gorging themselves on music and media for a microfraction of the actual cost to the artist and record companies. Fortunately, physical sales still have a place in today’s market, but as the population ages and Digital Natives grow into adulthood, the need for physical forms of music will most likely radically decline.

This is part of what the industry is calling the “value gap” – listeners are not paying a “fair share” for their music consumption, and artists, especially lower level artists, are feeling the hit. Ironically, while physical sales have plummeted over the last decade, the percentage of profit that an artist can get from the sale of a physical album still greatly outweighs the profits from streaming services that sometimes only pay a single penny per thousands of views. This is just one reason why any serious musician needs to sell a combination of products, from digital sales to physical items like autographed albums and t-shirts to turn a profit.

Benefits to public for multi channels

Today serious musicians must look at multiple streaming, physical, and digital platforms when reaching their market if they want financial growth. They need to be savvy in terms of social media marketing, digital distribution, and jumping into music licensing. Online presence is not enough, with the most successful artists coupling live performance with online distribution. Any even more lucrative path is one that integrates endorsements and brand partnerships as an additional source of income. Big name artists may be able to snag partnerships with companies like Chrysler or Citibank, but even low-level musicians can benefit from partnering with companies.

The services and opportunities for musicians will continue to evolve over the next decade as smart devices from wearables to driverless cars integrate technology and become another platform to enjoy music and media. Internet technology has revolutionized the music industry, but the roller coaster is just getting started.

Written by: Sabrina Peña Young

Called “Wagner 2.0” by critics, award-winning composer and music technologist Sabrina Peña Young produces commercial music, soundtracks, and electronica presented throughout Europe, Asia, Australia, and the Americas. A sought after consultant and TED speaker in music, arts and technology, Young continues to push musical boundaries with works like her “groundbreaking” animated Libertaria: The Virtual Opera and her album “A Futurist Music Anthology: The Electroacoustic Mind of Sabrina Peña Young.” Young recently published the book Composer Boot Camp 101: 50 Exercises for Educators, Students, and Music Professionals, available at

Follow her on twitter DalatindivaFacebook and take a look at her own running Blog. Also take a look at her website here and music by clicking here.

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