How is Popular Music Distributed Today?

SOURCE: LANDR

The economic principle I’m exploring is “People generally respond to incentives in predictable ways.” My research question to help me study the economic principle is “How does the music industry incentive artists to make popular music?”
The article published in LANDR titled “Everything Musicians Need to Know about Music Distribution” demonstrates this economic principle by explaining what music distribution really is, how music distribution has changed in recent years, and what the benefits are to digital distribution all in relation to how artists are incentivized to make the most money.

First, the article simply explains what music distribution really means. How music is distributed is essentially the link between a finished record and fans of the artist. In fact, even though many people don’t know the specifics of music distribution, it is a “crucial part of music promotion.” While it is easy to understand that music distribution is literally how music reaches the listener, what is interesting is just how much music distribution has changed over recent years, and how this affects the music industry.
Traditionally, finished music would have to go through a distributor who would have an agreement with the artist/ label on distributing physical copies of the music. In this system, the middleman, or the person in charge of distributing the music to record stores, would get a certain percentage of the profit made off of that album. This all changed dramatically with the introduction of digital music distribution in recent years.

Next, it is very interesting to see just how much the distribution of music has changed in recent years due to the rise of digital music consumption. In this new age of music distribution, a middleman that distributes the music is still present but the system is drastically different. To understand this shift, it is important to first understand how digital music distribution works in general. Artists first must try to get their music into digital music stores such as Spotify, iTunes, and Google Play. These digital streaming services serve as “digital record shops” as user pay a monthly fee in return for access to practically every song, artist, or album they can imagine. It is because of this popularity of digital music stores that the role of the middleman in music distribution has changed.
Now, digital music stores will make an agreement with the artist/ label whose music they want to play, and get a percentage of the revenue based on amount of plays on a certain song or album. There is no doubt that digital music distribution is at the top of its game, and still continues to rise, as “people spend more time online, and less money of physical music.” However, what we now must investigate is just how beneficial digital music distribution is to the music industry- and possible drawbacks.

Finally, digital music distribution doesn’t seem to be slowing down any time soon, so how does this system both help and hurt the music industry as we know it? One of the biggest benefits of this system is simply that “digital music sells the best.” This is glaringly evident when we see that 50% of the “global revenues of the [music] industry in 2016” came from digital revenues. Another substantial benefit to this system is that artists are more capable than ever of reaching new fans. Before music streaming services, when all music was sold and bought in physical copies, you wouldn’t have the chance to just give a new artist “a try”, because you likely weren’t buying a full album of an artist you had never listened to before.
Now, artists can release singles and EP’s easier than ever before, and this allows more people to listen samples of their music. One negative that could be related to this, however, is the increasing popularity of playlists. With streaming services, listeners can create their own playlists made up of songs from various albums and artists. Some could argue that this actually hurts the artists because with fewer plays on one specific album, they may not see as much of a profit. To conclude, one of the best parts about streaming services from an artist’s perspective is that many of these services, or stores, do not require “exclusivity deals” that confine the artist to that one store.

In my next blog post I will research the question: What are some ways artists can be successful without conforming to industry standards? Are there any? If not, how come?