Citi reports only 12% of revenue is reaching artists

A new report from Citi reports that the artists share of music revenues is 12% of the $43 billion industry.

In 2017, artists captured just 12% of music revenue with most of the value leakage driven by the costs of running a myriad of distribution platforms such as AM/FM radio, satellite radio, Internet distributors — augmented by the costs (and profits) of the record labels.

The big three Sony Music, Warner Music Group, and Universal Music Group now earn billions each year from the massive growth in streaming music services with the majority of this coming from back catalogue they own the rights too.

Kevin Brown (our CEO and founder) is quoted in the report as saying

I think Spotify and other streaming services have absolutely taken the place of
radio. But the important thing to remember is that radio is linear, whereas streaming
isn’t.
What that meant was that when you listened to radio and heard a song you liked, as
a consumer you had two choices: you could listen to the radio continuously until
they played it again, which could take some time, or you could go and buy the song.
Both routes created some money for the artist, but with the latter being much more
remunerative.

So where does this leave new music and new artists?

Well direct to fan is a growth area as artists look for ways to make their career work. Direct-to-fan delivers value directly back to artists and management.

This is where we can help. We can provide the tools and revenue model to grow your fan base and keep your fans happy so they can go on the journey together with their favourite band.

So is streaming really benefiting artists?

Independent musicians and artists often share their actual streaming payouts with industry news site Digital Music News. And, the answer is simply no they are not benefiting.

Digital Music News notes that Zoe Keating, an award-winning cellist and composer, earned just $4,388.93 from nearly 1.2 million streams on Spotify.
David Crosby reportedly earns $4,370 on the same service.

The clear message is don’t expect to pay next month’s rent from your streaming revenue. And It’s no better on Apple Music or any other streaming music network.