How musicians can thrive in the streaming era
Spring is finally here along with the Juno Awards, honouring Canadian music achievements.
The music industry continues to change as streaming has taken off and new digital tools make production and distribution easier.
Don Grierson has witnessed the entire transformation.
Grierson is an independent music consultant and a long-time executive in the music business. He's helped shape the careers of Celine Dion, Tina Turner, Duran Duran, and many more artists, who sold millions of albums in the days before streaming.
Today, with album sales no longer making up the bulk of an artist's income, his job is to help emerging artists navigate and thrive in the digital economy.
The new era of streaming
When streaming services like Spotify, Pandora and Apple Music came on the scene, the business went upside down, said Grierson. "We were about a 30 billion dollar business and went down to a 15 billion dollar business." (Six major record labels also came down to three).
"The music business as we know it has gone through dramatic changes, but the music creator is still in demand. The problem is getting them paid a fair price for their talent." - Don Grierson
But streaming has also brought back a lot of positivity, points out Grierson. According to Goldman Sachs, by 2030, music will grow to be a 41 billion dollar business thanks to increased usage of music worldwide in films, television, commercials and radio.
And the good news is, music creators are still in demand, said Grierson. "The problem is getting them paid a fair price for their talent. That's the ongoing struggle."
Startups helping creators
Before streaming, record labels paid a small royalty to creators for every album sold. But now, a number of music startups are trying to change that.
United Masters was created last year by a former executive at Interscope Records. Its focus is using data analytics to target fans and superfans. Artists pay to have their music distributed across different platforms, and they split the royalties 50/50 with the artist.
"It's a much better ratio of income for the artist than a royalty in a label," Grierson said.
"The big money [today] is not really from selling albums, but from touring, merchandising, publishing and branded products. There's some serious money out there especially if you're an international artist." - Don Grierson
Another company, Kobalt, has developed an app that tracks an artist's income across different streaming platforms to help them better manage their finances.
"Kobalt is revered as a label that doesn't spend a lot of money trying to make business happen for you," Grierson explained. "They're set up to find money where it's out there and they pay it to the artist in a timely manner with transparency."
According to Kobalt's website, creators get paid quicker, and on average, 30 to 40 percent more than with a major publisher or a record label.
Advice for modern-day artists
While artists can take advantage of these tools to bring in more money, succeeding in the digital economy in a major way still begins with the music, according to Grierson.
He gives the examples of Adele, Ed Sheeran and Chance the Rapper. They've all created many hits and have built a strong fanbase. "When you make a hit and the music connects, the marketplace is there," Grierson said.
"The big money [today] is not really from selling albums, but from touring, merchandising, publishing and branded products. There's some serious money out there especially if you're an international artist."
Once you have good music, the next challenge is to market it and to build your fanbase, advised Grierson.
"If you're signed to a label, they're gonna do a lot of things. If you're an independent artist, you have to do similar things yourself."
There are many successful independent artists out there doing that, Grierson points out. "They are making decent money, working all the time, because they really know how to handle the street, the social media, the interactions between fans and them and they build upon it."
Many of them are making more money than signed artists because they're doing it themselves, he explained. "They're taking the risk...so you have to be willing."