According to a report from Citigroup, the average musician only takes home 12% of the total revenue in the music industry, which amounts to $43 billion. This includes live music and the recording business.
Now before this comes off as a total travesty, the report goes through all of the various middlemen involved that need to get paid before a song goes to market. Now many of these people are necessary to the process and some of them don’t get paid enough, songwriters, producers and engineers, but also managers, labels, distributors, publishers, lawyers and agents.
The people who make the most money in the industry are those aforementioned middlemen like record companies, tech companies (think of the size of Apple, Amazon, Spotify and Tencent), and radio stations.
There is some encouragement though. The 12% is higher than it was in 2000 when artists were only taking home 7%. That is now due to strength of the concert business and more artists able to self-release using internet marketing tools and cheaper distribution methods that don’t require expensive labels.
The report outlines a few ways in which artists could potentially make more money through better deals. Concert promoters could merge with a distribution platform or streaming services could morph into labels.
The report barely mentions blockchain. Actually it mentions it for the first time on page 70 of 88. They do expect it to “increase the transparency and efficiency of the industry, which is likely to be a key differentiator vis-à-vis the artists.”
The Music Modernization Act (If passed without being completely watered down) could change the rates that some artists are paid, how quickly royalties are paid and who gets paid for what, but most of the basics will remain the same.