Mark Runyon | ConcertTour.org
Somewhat depressingly, but equally unsurprisingly, new research from MIDiA Consulting has found that the modern music economy favors the world’s megastars more than we’d initially thought, with 1% of superstar musicians earning 77% of music’s overall income.
“The music industry is a ‘superstar economy,’ that is to say a very small share of the total artists and works account for a disproportionately large share of all revenues,” says Mark Mulligan of MIDiA Consulting, adding “this is not a Pareto’s Law type 80/20 distribution but something much more dramatic: the top 1% account for 77% of all artist recorded music income.”
Mulligan describes this as the “opposite of the long tail” which means that, rather than exploring their options, consumers are becoming more and more overwhelmed with choice, making exploration insurmountable, and endearing them to default, superstar musical options.
“The concept of the long tail seemed like a useful way of understanding how consumers interact with content in digital contexts, and for a while looked like the roadmap for an exciting era of digital content. Intuitively the democratization of access to music – both on the supply and demand sides – coupled with vastness of digital music catalogues should have translated into a dilution of the Superstar economy effect. Instead the marketplace has shown us that humans are just as much wandering sheep in need of herding online as they are offline.
In fact digital music services have actually intensified the Superstar concentration, not lessened it. The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.”
Apart from the fact that music’s social mobility is obviously a real problem, the report also concludes that the digital revolution has only aided the increase in its financial divide, with streaming services like Spotify, Pandora, and Rdio, who are engaged in a “catalog arms race which has become entirely detrimental to consumers’ digital music experiences”, being identified as the key contributors to the problem.
Where does this leave the modern music industry? Who knows, but hopefully, in a few years’ time, these figures will look a lot less depressing for the upstart artists out there.