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Growing music revenues, where to invest your time in 2017 and beyond

In case you hadn’t heard the news yet, 2016 saw the first real growth in global recorded music sales than it had in 18 years. Revenues hit a peak in 1999, went on a downward spiral until 2010, stayed stagnant for 5 years, and are now back on the rise again.

It’s a good time to be alive my friends. Cynics beat it.


As you can see in the graph above, physical sales of recorded music (CD’s, vinyl) went from over 23 billion down to 5.4 billion. In the past 10 years, digital music sales (iTunes downloads, Spotify streams, etc.) have gone up from 1 billion up to nearly 8 billion. And although a much smaller fraction, performance royalties, and sync royalties are increasing as well.

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Where should you invest your time and dollars?

Today (in regards to recorded music), artists and record companies are making the most money from digital performance royalties from streaming, digital downloads, and getting their music placed in film, television, commercials, advertisements, and video games. Another piece of the pie? While physical sales are continuing to decrease, this is technically only speaking to the CD. As you can (barely) see on the chart here, we are increasingly seeing the revival of the vinyl record.

As explained in a 2017 global music report by IFPI:

Streaming is now established as the most prevalent and significant format in the modern music industry, fueling growth in almost all major markets and starting to unlock the phenomenal potential within developing territories. Physical sales remain significant in certain countries and for certain artists, and the vinyl revival has been a headline grabber, but streaming is the growth driver that is revolutionizing the business.

Sony Music’s President, Global Digital Business & US Sales, Dennis Kooker, says:

“When we look back, 2016 may have been a tipping point for streaming and, most importantly, for paid subscription streaming. A year ago we listed driving paid subscription as the number one priority, so that has been a positive development and a lot of hard work went into that.”

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What does this mean for you?

1. Invest more of your efforts in getting your music onto DSP playlists

Either get to know the editorial/playlist creator staff at Spotify, Apple Music, Google Play and other Digital Streaming Platforms (DSP’s), as well as Sirius XM and other satellite radio broadcasters, or hire a streaming promotions company to do the pitching for you. Draw your fans to stream your music as much as you can. And make sure your songs are registered with SoundExchange in order to earn those digital performance royalties.

2. Invest more of your efforts in getting sync opportunities

Meet music supervisors who are working on shows that fit your musical style. Try to get a deal with a publishing company that has preexisting relationships with music supervisors and a track record of sync opportunities for their clients.

3. Consider jumping back on the vinyl bandwagon if you haven’t yet

Though it’s still a tiny piece of the pie, it’s been on the rise for the past couple of years. Take a look at your market and consider whether or not releasing your album on vinyl (and perhaps instead of CD’s) is more viable for you.

4. Invest in mastering your live performance

While the global recorded music industry is a 15-billion-dollar industry, the global live performance industry is sitting around 10 billion. So while you’re focusing your efforts on streaming and sync, don’t forget to focus your efforts on the other big piece of the pie, touring.

What else are people saying that we will see more of in the future of music?

  • Music will continue to be released in more and more unconventional ways
  • Experiential advertising and marketing
  • Political songs about Trump
  • Females – less “bro culture”
  • Algorithms will continue to take over
  • Getting on streaming playlists will become increasingly crucial to streaming success
  • Vinyl will continue to sell
  • Streaming will out-do digital downloads
  • Spotify will continue to dominate the streaming market, but competition will increase
  • Virtual reality
  • We will continue to go over our monthly cell phone data plans 😉

Where are you investing your time this year? What do you think we will see more of in 2017 and 2018? I’d love to hear from you in the comments.


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