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INTRODUCTION

Music is undeniably one of the most important forces in societies. Its ability to transmit meaning, culture, and emotion through endless creative processes defines its massive influences on human life throughout all of history. As musical composition, structure, genres, production, and other aspects all develop, so do the advancements to create and distribute music. A big question to ask would be, “How does music spread the way it does?” Before modern technology, artists had to seek more local and physical solutions to solve this dilemma. As time progressed, record labels started to form to consolidate the creation, promotion, and distribution process to help artists reach an audience- as well as to make a profit. Now, the new major medium for consolidation is digital. The digital age has massively impacted the entire music industry, such as adding new layers to the creative process, and even to how we listen to music. As essentially all aspects of the industry have changed, the economic sphere has undoubtedly changed as well, with streaming services adding another method for royalties to be calculated.

EXAMPLE SONG 1: "SING ABOUT ME, I'M DYING OF THIRST" - KENDRICK LAMAR

Kendrick Lamar’s record labels, past and present, are PGLang, Top Dawg Entertainment, Aftermath Entertainment, and Interscope Records. Interscope was founded by Jimmy Iovine and Ted Field, with John Janick as its current CEO, and Universal Music Group as its parent organization. Aftermath was founded by Dr. Dre, and is distributed through Interscope. Top Dawg is an independent label and is owned by its founder Anthony Tiffith. And finally, PGLang is owned and founded by Kendrick and Dave Free. When it comes to the price metrics, the song is packaged with my $15 monthly Apple Music subscription, but purchasing the song alone would cost $1.29. This translates to around 60-70 cents for his profit. Streaming the song results in far less profit- around, but less than, a single cent per play. Although it depends on his royalty rate, in general, for every $1 paid in royalties, labels get around 60-75%.

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EXAMPLE SONG 2: "AROUND THE WORLD" - DAFT PUNK

Daft Punk’s record labels are Daft Life, owned by Guy-Manuel de Homem-Christo and Thomas Bangalter; Columbia Records, owned by Sony Music Entertainment; Virgin Records, owned by UMG; Soma Quality Records, owned by Some Recordings Ltd; Parlophone, owned by Warner Music Group; Warner Records Inc; and Walt Disney Records, owned by Disney Music Group. Their comparatively larger list of labels is most likely attributed to their larger audience, the genre of music, and being active in the industry for longer. The price for the song, $1.29, and other metrics is similar as Apple Music is used in both cases. The main variable for different profit margins would be their royalty rate- which is assumedly close to Kendrick’s, due to both of their popularity.

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EXAMPLE SONG 3: "WHITE GLOVES" - KHRUANGBIN

Khruangbin’s record labels are Dead Oceans, owned by an independent label Secretly Group; and the independent label Night Time Stories, owned by Paul Glancy. As seen with the previous two examples, the number of associated record labels an artist has can indicate their popularity, although it’s purely a pattern that can be seen. Once again, Apple Music and Khruangbin gain relatively the same amount for each purchased song, $1.29, and per stream. When it comes to their royalty rate, this could vary wildly, as their labels are more independent than the others, allowing for a much higher royalty rate than expected. This doesn’t equate to much higher profit, as streams and purchases are still necessary, but it’s a decent balance for the smallest artist/group out of these three.

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CONCLUSION

The massive push toward digital media has greatly impacted how the music industry creates, promotes, and distributes, and how we consumers interact with each step of the process. Streaming services steadily balance between being very user-friendly and artist-crushing. The ease of access, unlimited catalog, and ad-free listening that many of the most popular mass-market services- Apple Music and Spotify- have, make them incredibly convenient for consumers. They allow for user-defined experiences and create dynamism with daily activities (workout, study playlists) that, while possible before, are now more easily integrated through our heavy use of smart devices. The tradeoff with these mass-market services is that they are less friendly to artists, as a majority of their work is a drop in an ocean. These can also feel very unrewarding when it comes to royalties as well, as stated before, Apple Music pays around $0.008 in royalties for every stream (less than a cent!). This means it takes around 128 streams for a dollar to be made. For many popular artists, meeting these requirements isn’t difficult, but it is for smaller artists. The large negative impact of these services that has been noted in the last few years is that artists are often forced to fish for streams, whether by outputting music that is specifically tailored to get streams or by asking their listeners to stream their music repetitively. An example of this is Justin Bieber’s push for his 2020 single “Yummy.” He made posts asking his fans to stream the song on repeat overnight while sleeping, or buy the song multiple times. I see this as a shameful side of the developing industry, as artists have to beg for streams to “game” the system. This can place the harmful mindset of only needing streams and not worrying about the craft in newer artists.
The opposite of these larger, more audience-focused services, are record label or artist-centric services (Patreon). These can make a more defined experience for a specific artist or label, decreasing the reach for audiences, but increasing the experience for those loyal to them. This also provides a better experience for the artist, as they have a better grasp of their audience’s experience, and they have a more defined stream of income.
The increase in user experience at the potential cost of diverse options for services and forcing a potentially creatively-hindering mindset for artists to garner streams is a tradeoff that I hope will better itself with time. Whether for better or worse, industries will continue to evolve and change, and the music industry is no different.

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Sources

https://www.musicbusinessworldwide.com/the-four-types-of-music-subscription-models-in-2019/
https://www.indiemusicacademy.com/blog/music-royalties-explained#types-of-music-royalties
https://dittomusic.com/en/blog/how-much-do-music-streaming-services-pay-musicians/
https://producerhive.com/music-marketing-tips/streaming-royalties-breakdown/
https://en.wikipedia.org/wiki/Lists_of_record_labelshttps://www.musicbusinessworldwide.com/justin-bieber-in-spotify-stream-gaming-controversy-as-he-directs-fans-to-play-new-single-on-repeat/
https://www.billboard.com/pro/music-streaming-royalty-payments-explained-song-profits/

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