Yesterday (Feb 26, 2013), the International Federation of the Phonographic Industry (IFPI) released its 2013 Digital Music Report, noting that the music industry’s global sales rose last year for the first time since 1999.
The New York Times, Billboard and Eliot Van Buskirk each wrote great pieces about the IFPI report and the reasons for revenue growth of the global music industry. Eliot summed up the reasons stated in the report as:
- Digital music sales (a.k.a. iTunes, Amazon, etc.) are rising.
- Subscription fees (Rdio, Spotify, Rhapsody, Muve, Deezer, etc.) are “growing rapidly.”
- Licensing revenue (i.e. to film, advertisements, videogames, YouTube, etc.) is also “growing rapidly.”
Eliot rightly summarized that the music industry is reaping the benefit of particpating in “multiple sources of revenue”. Which makes me want to point to this version of our 42 Revenue Streams list, re-organized into three columns: existing, expanded and new. We put this version together in advance of last week’s SF MusicTech Summit to provide audience members with some sense of the ways that musicians’ revenue sources have changed over time.
A snapshot below. Click through for more.
I’m sure folks will quibble over the categorization of some of these (for instance, should the digital mechanical royalty be in the “expanded” or “new” column?), and I will be the first to agree that the rate of payment on some of these new streams is fractions of pennies, but it’s important to itemize the rights/royalty streams that have either expanded or been newly created in the past 15 years alongside the development of an array of music services.
For musicians, being aware of all of the possible revenue streams is a first step. Then you need to ask yourself:
- Does this revenue stream apply to me, as a composer/performer/recording artist?
- If if does, how does the money flow back to me? What are the conduits? Does the money flow through my PRO, publisher, record label, aggregator, union? Do I need to sign up for something in order to claim this money?
And there are other questions: how much can I expect to make on this new stream? If I don’t like the rate, how can I advocate to change it? Can I choose not to participate in this stream? For each of these revenue streams, the answer is different, but FMC remains committed to helping musicians navigate these changing waters. For an overview, start with our 42 Streams and our New Business Models spreadsheet. But if you have specific questions about how the money flows, reach out to us and we can either tell you or point you to more specific resources.
The findings in the IPFI report also dredge up a bigger question: will these new revenue streams make up for declining revenue from sound recording sales? Will the music industry ever return to its size circa 1999? Experts who participated in yesterday’s IFPI press conference stated varying opinions, but there was a cautious optimism that, at least, there was room for growth and improvement in the future.
While industry-wide data is helpful, the more pressing question for us at FMC is whether and how musicians are benefiting from this shift in revenue streams. This is why we embarked on the Artist Revenue Streams project in 2010, to measure the revenue streams on which musicians are relying, and how they’re changing over time. We have issued dozens of reports to date, looking at everything from jazz musicians to income from sound recordings, but even this is simply a snapshot, measuring musicians’ experience in 2010-11. To really understand if and how musicians are financially benefiting from shifting and multiplying revenue streams, we need to ask musicians. Directly. And routinely. This is why we intend to replicate the Artist Revenue Streams work in the future, so we can measure change over time, and really understand the changing mix of musicians’ revenue streams.
(Image courtesy of IFPI)