Musicians get 12% of $43 billion generated by music industry: Study

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• Recording artists received just 12% of the $43 billion
  that the music industry generated in 2017, according to a
  Citigroup report.
• Consumer spending on music generated an all-time high
  of more than $20 billion last year, but music businesses,
  including labels and publishers, took almost $10 billion, while
  artists received just $5.1 billion, the “bulk” of which came
  from touring.

Recording artists received just 12% of the $43 billion that the
music industry generated in 2017, according to a
Citigroup report published on Monday, and led by
analyst Jason B. Bazinet.

$43 billion matches a 12-year peak that the industry hasn’t hit
since 2006, the report said. 

The proportion of the total music industry revenue artists are
capturing has actually risen since 2000, when artists took home
only a 7% share of the revenue.

But this increase is due in large part to the growth of concerts
and touring as a revenue stream that is largely distinct from the
intermediary of their music labels. Artists are still taking home
a meager share of the increasing revenues in streaming for their
music, where music labels and music streaming services act as
intermediaries. 

The report shows that “consumer outlays,” which includes
streaming, concert sales, and purchased music, generated an
all-time high of more than $20 billion last year. But music
businesses, including labels and publishers, took almost $10
billion, while artists received just $5.1 billion, the “bulk” of
which came from touring.

Citigroup

The report anticipates (and is likely to spur calls for more)
“organic forms of vertical integration” in the industry, where
existing music providers like Spotify and Apple Music could
“organically morph into music labels,” allowing artists to
capture more of their music’s value by releasing their work
directly with the services. 

The group concluded the report by highlighting an alternative
voice in the industry, with a commentary from Bjorn Niclas,
cofounder of Choon, a cryptocurrency-based music streaming
service. 

“Currently artists are at the end of the line,” Niclas said in
the report. “They get the smallest piece of the pie even though
they are the ones creating the content. In any other industry you
typically see much better returns and margins.” 

Read the report here.