I have a lot of friends in the music industry. The ones that have taken note of what is going on NOW are doing well. The ones that are stuck in the past and still using the old tricks of the trade are simply stuck….and I don’t think they’ll be going anywhere any time soon. Simply put, a new paradigm has formed and those that do not heed the call will get left in the dust.
There are a number of things that have caused this shift in how things are done in the music industry:
1. The Demand
Music is a business just like any other. It follows and feeds on money. Don’t get me wrong. Music doesn’t exist because of money….but the music business does. Over the past twenty years, music has suffered through the invention of the CD, free torrents, iTunes (with Apple’s 30 percent cut), Napster, and now, all of the new streaming services that lower sales below the already-low, low level.
The industry has been rocked by all kinds of new trends, and has recently succumbed to a state of free-fall terror. Industry leaders are clutching whatever straws are left in an attempt to still make a little profit from the remains of its now-broken business models.
As music becomes firmly embedded in the digital realm, Millennials have become the dominant music consumers. They also dominate the most likely successful future market for music: mobile devices. Millennials use music and other kinds of entertainment apps more than 75 percent more than anyone else. They also use social sharing apps 20 % more frequently than any other demographic.
In other words, Millennials consume more music than anyone else, and they tell the greatest number of people about it. Why the sharing? Why is this so important?
The old music industry had a banner metric of artist success: album sales. For years, album sales have been declining and the growth of singles and streaming services have accelerated the trend.
As we’ve transitioned into a digital music economy, new measures of success have emerged. A new generation of artists has hit the scene and they thrive on attention rather than units of music they sell.
The attention has become every bit as valuable as one’s likelihood to purchase. The attention is what leads to festival and concert attendance, merchandising sales and other sources of revenue. However, they still won’t buy anyone’s music.
Brands know this, too. Companies like GUESS, Red Bull and Steve Madden will pour more than $1.34 billion into sponsoring music venues, festivals and tours this year.
Over a billion dollars will be spent for the opportunity to build customer relationships and brand equity with digital natives. In contrast, the top 10 highest-earning electronic artists last year cumulatively made just over $240 million — less than 20 percent of what brands will spend in 2014 to capture Millennials’ attention.
What brands understand is that music is an important part of Millennials’ identity. It’s more than entertainment for this generation. The music they listen to can be as important as how they dress and influences who their friends are. Going to festivals and concerts is an expression of identity. The brand will become part of the fans’ lifestyle.
The crux is that the music industry and the big brands are both chasing the new generation of artists; artists who can capture, retain and monetize attention — instead of album sales — and who can keep Millennials interested. If you’re still trying to ride that old steam engine, it’s time to jump off and ride the new wave of music.
2. The Supply
These days, the only things required to make a sellable recording is a computer and a piece of recording software. One of the most powerful professional digital audio workstations used to produce music is Logic Pro from Apple. Get this…it only costs $200. It has virtual instruments like pianos, synthesizers and drums, as well as all the necessary tools to edit and produce audio.
Most of the equipment required to create music has been absorbed into digital audio workstations while the software continues to get easier and easier to use. The end result is that artists can create music more quickly, more efficiently and less expensively than at any other time in history.
Gotye created “Somebody That I Used to Know” in his parents’ house in Australia.
The song reached #1 on more than 23 national charts and landed inside the top 10 in over 30 countries worldwide. By December of 2012, it became the best-selling song of that year. That’s right. A song recorded in an Australian basement with a $200 piece of software sold over 11.8 million copies! It was ranked among the best-selling digital singles of all time.
A young Dutch producer named Martin Garrix reached the top of the charts in more than 10 countries with his smash hit, “Animals,”
He produced and released this song when he was only 17 years old. The song hit number one on Beatport, making Garrix the youngest person ever to receive the honor.
Millennials, who can simply record after class or work, are mostly familiar with this technology, but our open-source attitude toward learning is much more important.
Search “How to use Logic Pro” in YouTube and you’ll find thousands of free tutorials. Sites like Reddit have entire communities with tens of thousands of members who are dedicated to learning about music production.
3. Music Discovery Is At An All-time High
Music discovery and music production go hand in hand. However, as technology has enabled easy music production for emerging artists, it has also provided them with a way to reach fans all over the world.
There are the classic success stories like Justin Bieber and Lana Del Rey, of course, but below the YouTube empire rests an entire culture of Millennials who are discovering music online.
Platforms such as SoundCloud have more than 250 million active users each month and Millennials discover their music predominately through these digital platforms. Oh, and by the way, when digital natives produce new music, they initially release it on the digital platforms.
A key element to remember: Millennials are creating more music than ever and releasing it onto platforms where their peers go to discover music.
4. Millennials Are Forming Powerful Musical Teams
Powerful songwriting and production teams exist to back popular artists such as Taylor Swift, Rihanna and Katy Perry. These teams are one of the primary drivers that sustain the superstar artists on top. Working in teams allows writers to churn out tons of highly enjoyable music tracks at top speeds.
However, Millennials are breaking down this final barrier, too.
Services like FindMySong are connecting independent musicians so they can form their own dominant songwriting and production teams. The FindMySong model takes advantage of the fact that there are more independent musicians than ever before who want a piece of the major artist success without the major label strings.
With cheap recording technology and an effective way to distribute the music, these independents team up online to rival major labels.
For the first time in its history, the American music business is firmly in the hands of the artists and the consumers. The power is now in your hands. You have the ability to lead the industry wherever you want it to go. Where will that be?