Bruno Mars, Taylor Swift, and Kendrick Lamar! You’ve probably heard of all these big-name artists and also likely listened to their songs at one point or another. The music industry is incredibly popular and only continuing to grow and serve as a centerpiece for our daily lives. Despite how often we turn on the radio or play a song off Spotify, many people never stop to think about the role business plays in the music industry. More specifically, what are the largest sources of revenue within the industry? After conducting in-depth research, it is apparent that the two main factors driving profit in the music industry are streaming services and live music.
Before the advent of streaming services, many people turned to CDs and record players as their source of music. Eventually, technological advancements led to a medium by which people could access music and have it at their fingertips. Unsurprisingly, many people moved away from their old music channels and towards streaming services, so much so that “83% of music industry revenue comes from streaming” ("Götting, 2021"). Justin Powell, a Marshall School of Business Student at the University of Southern California agrees, citing how streaming services have caused “songs to get shorter and albums to get bigger, as it pays more to make more songs.” Clearly, streaming services have taken hold of the music industry.
Aside from streaming services, live music has also served as a tether point for business in the music industry. With COVID-19 shutting down face-to-face interactions, “live music concerts brought in 14.15 billion in revenue in 2021, but is projected to hit 30.67 billion by 2025” ("Götting, 2021). Samantha Aviles, a Production Runner at Live Nation explains that “artists have turned to touring” as it is the largest source of payout for up and coming artists who don’t have the fan base prominent artists do on streaming services.
Between streaming services and live music, it is clear that the music industry and business industry are interdependent. As ABBA would say, “Money, Money, Money!”