A Quick History Of The Music Industry

The music industry has seen a rapid transformation in the past years. It has turned out to be a classic example of how innovation in technology can disrupt an entire system.

Understanding How We Got Here

The turn of the millennium was considered to be the peak for the physical distribution of CDs. One of the very successful bands of this era was Linkin Park.

Their inaugural album, ‘Hybrid Theory’ experienced overwhelming success, selling 10 million albums – a record. Unfortunately, it all began to shift from there. With the emergence of new technology, namely, peer 2 peer file sharing (i.e. Napster), and the embracing of new mediums (remember mp3’s), the sale of CD’s started declining.

The “current” music industry is based on various creative and technological industries cobbled together with some following the same business models from the 1950’s. Yet, musicians are earning much higher proceeds, without the usage of CDs. But, the scenario was much different almost 20 years back.

Linkin Park performing in August 2014

The Pre-Social Media Era

In the pre-social media era, musicians had to sign a contract with a record label to produce and launch a music CD. Once signed, the artist used to enter into the record label’s distribution system.

Yet, the musician’s personal revenue stream was limited, as low as 10% of the profit. On top of that, they also had to bear an array of additional costs. Promotional events, such as success parties, were held to thrust them into the limelight where the musicians had to bear almost half the expenditure. 

Promotional tours were also not as profitable for the musicians back in the day. Bands used to go on tour to reach out to the audience and promote the album, even though the tour was running with a loss. The ticket prices were much lower, with arena and stadium tour tickets costing around £22.

The artists had to pay for the tour, for marketing, for the recording, for the parties, and all of this from the meager 10% share of the profit they had accumulated. Plus, the merchandising and fan engagement options were limited too, with the lack of social media or similar online mediums adding to the struggles of that time.

But, as a response to the shift in music consumerism and unsavoury business deals. Musicians and technologists have built ways to create a different situation altogether. A different chapter, a different era, one which thrives on the journey of a musician, their story. Back then, everything was focused on the album, music was the key. Today, the music product lies at the bottom of the revenue pyramid, with events, merchandise, and content dominating at the top.

Muse playing “Starlight” at Reading and Leeds Festivals on 28 August 2006

Embracing A New Era Of Commerce

The last couple of decades have witnessed a great deal of exposure and acceptance for independent artists (Some notable successes have come from Skrillex, Lewis Capaldi, Scarlxrd, Post Malone, Chance The Rapper, Stormzy, and Ed Sheeran to name a prominent few). The three major labels have started discovering and investing in independent artists and bands. Plus, interactive experiences (e.g. Marshmallow’s Fortnite live show), tours, and merchandise have been leveraged as albums have gone out of fashion and consumers shift to listening via playlists and new-age digital media platforms. 

The scope of the artist and media-based promotional events has increased drastically. Even the approach of artists releasing music has seen much change. These days, thanks to many different music curation algorithms, the approach of single releases throughout the year has gained more momentum and popularity.

Marshmellow’s Fortnite Live Concert

The Democratisation Of Media

With the evolution of social media, artists can easily share their work, directly for free, rather than via a costly marketing campaign. The various online platforms give artists a space to share their music and views with the world with a million eyes to witness. Arguably the biggest artist in the world right now, Ed Sheeran, is an independent musician (albeit with the major labels now involved) from the UK who writes, tours, and collaborates extensively. You can see his journey via his social media accounts where he personally posts regularly. This level of interaction, which is possible now, wasn’t available even 10 years ago. This publicity is free and adds to the musicians’ benefit. 

Musicians can now steadily reveal information about their new releases, how they make music, and their music videos. This helps create a relatable, interactive atmosphere for fans. Through regular social media interactions, the artists can document their everyday lives and make people from all over the world become a part of it. 

The “future” music industry model leverages technology to turn the artist or band into a brand. The overall revenue is generated through tours and also by the merchandise sold online and at events. Initially, before the advent of new age electronic media, artists had to face high entry costs that had to be spent on promotions. But today, social media has reduced that gap drastically and provides powerful tools for artists. 

Musicians’ works can now be freely available to the world and, if they put the right systems in place, fans will want to compensate their favourite bands and artists. 

Bands and artists from humble beginnings, such as the Enter Shikari, have gained wide popularity by leveraging this new way of operating. They provide fans with behind the scenes insights and high-quality valuable products. Their exclusive merchandise, such as t-shirts and photo albums, are extremely popular. Plus, through continually honing their stagecraft and sound, they consistently draw great audiences during their live shows and tours. 

Enter Shikari – Rock am Ring 2018

What This Means For The Music Industry

The music industry has seen a rapid transformation in the past years. It has turned out to be a classic example of how innovation in technology can disrupt an entire system and make way for a brighter and better system. The “future” music industry has been influential and powerful. The revolution of the music industry started with major labels controlling the physical distribution of CDs and shifted to artists introducing music directly via the internet and digital means. 

With the immense popularity that this new medium of music consumption has received, physical music distribution is becoming increasingly irrelevant. Even major labels have had to redefine themselves as “music media” companies with the changing times. The new-age music model has proved to be more profitable for both artists and labels.

About the author: Alex Dudley (BA. MSc.)

Alex Dudley a.k.a. Xander Warren is an award-winning musician & business owner. Currently based in Hollywood, Birmingham, UK. His experiences as a musician, entrepreneur, educator & industry professional have spanned over 20 years.

Studying the music business & sound production at the University of Wolverhampton under the mentorship of Phil Savage & Ken Banks. Alex later went on to get his Master's degree in Audio Technology and found dAudio Music Group in 2015.

A passionate DIY punk from the day he started music. Winning Studley High School Musician of the Year in 2004 led to self-managing his own career in 2012. Later, dAudio Music Group would win the WLV Business Achievement Award for Graduate Start-up of the Year award in 2017.

Alongside offering 1-2-1 coaching, Alex writes about his experiences for the Bizy Musician. Plus, helps vocalists produce release-quality alternative trap pop songs by building a team around their music careers.

P.S. Thanks for reading... I hope you found some inspiration or insight from this content. - Alex :)

P.P.S. If you can't give today, that's ok. For those that can, help support my writing by giving a caffeination donation via PayPal below. ☕

Cultivate a successful mindset

An accessible guide that outlines the mindset and introspective tools required to achieve your goals as an independent musician. 

You’ll learn how to create actionable goals for your music career. Whilst balancing the realities of building an online music brand.

Perfect for those seeking to pursue their creative passions and develop a successful growth mentality.