The future of music: there’s everything to play for

Last night I was at the latest of many discussions about the future of music streaming. And the more I hear, the more I come to the same conclusion: nobody knows how – or if – the business model will work.

As more and more music streaming sites vie for market share, the one thing music industry experts and utopian-minded music bloggers share is this: digital sales will continue to increase, and no one has yet fully figured out how music will be monetised in the future.

Host John Safran, Rdio's Dave Cain and Scott Bagby

Host John Safran, Rdio's Dave Cain and Scott Bagby

I was at Rdio’s Future of Music roundtable, featuring some of Australia’s best brightest music industry people, and came away with the single clear thought: the role of brands will be paramount, but no one has anywhere near cracked how to play that role.

There’s no doubt that music streaming platforms like Rdio and Spotify offer users an experience of music that is more relevant to modern consumption habits – a ubiquitous ‘all music everywhere all the time’ experience. But two things aren’t clear. Firstly, whether sufficient numbers of Australian music lovers will buy these subscriptions to support the way the music industry is structured – at 7m music streaming subscribers globally, there’s a long way to go. And secondly, how much of the functionality and accessibility music streaming fans are becoming accustomed to is going to depend on third parties like telcos and the NBN. Even Rdio execs Dave Cain and Scott Bagby repeatedly made the point that their business model continues to evolve.

It was clear that music bloggers view the value exchange as one that is almost weighted more heavily on their side than on the side of labels and musicians: they connect the artist with the fan, and as such the expectation becomes that music is available freely (or at minimum cost) and can be shared, embedded and distributed to their audience without let or hindrance. And if that’s the trend, one wonders how long before it leaves the labels struggling to stay profitable.

Who is going, ultimately, to pick up the tab?

ARIA chair Dan Rosen predicted that the split between digital and physical music sales will continue to shift in favour of digital, becoming a 60:40 ratio with the next couple of years. It seems likely the trend will continue on until physical music content becomes the concern of relatively small number of collectors and obsessives who love the smell of vinyl in the morning.

Something else that seems likely is that music success will be made and broken on the ability of emerging artists to market themselves. From crowd-funding studio time via sites like Pozible, to promoting themselves via social media – and the activity around the Voice is a good demonstration of this – in a world where we have almost the entire planet’s back catalogue available at all times, achieving cut-through is going to increasingly come down to a musician’s media savvy. As a passionate music fan, this makes me a little bit sad: I can’t imagine a modern Ian Curtis making his way in this landscape.

Another interesting trend, identified by Sound Alliance MD Neil Ackland (and re-titled by me) is the emergence of the t-shaped music collector – fans with a hugely broad and shallow range of artists with few deeper interests, where you might own singles by a thousand different bands but perhaps only albums of a very select few.

And these fickle future music fans will want access to all of their enormous libraries at all times, across all devices. “Smartphones make it easier to do the right thing, which is the legal thing,” according to Dan Rosen. But it’s clear from looking at torrent sites that if the ease of doing the right thing doesn’t continue to increase, doing the wrong thing doesn’t phase too many people.

Perhaps it’s down to the modern media brands, having created these nation of super-empowered and enormously entitled consumers, to solve the problem of paying for their content needs- and this is the big opportunity for brands. Branded content development needs to consider music, as experience, as commodity, as the channel to convey relevance to the consumer’s world. As a recent guest post suggested, “brand managers, you’re the new studio execs. Get out there and green-light amazing projects”.

As musician Muscles suggested, “Artists fill the gap between who you are and who you want to be’ – and it’s brands that will be left to bridge the gap between musicians and their public. Only no one quite knows how.


Cathie McGinn


  1. Daniel
    20 Jun 12
    1:02 pm

  2. Thanks for this Cathie, definitely an interesting read.

  3. Damo
    20 Jun 12
    1:45 pm

  4. Weren’t brands what caused part of the problem in the first instance? Where major labels became so obsessed with marketing and image they started unleashing utter rubbish on the public who ended up spending less of their money on music.

    Having said that, while physical sales have eroded, ticket sales have sky-rocketed, that’s a part of the music industry too. So it’s not all bad.

  5. Tom
    20 Jun 12
    1:58 pm

  6. +1

    More like this please!

  7. Derek Strahan
    20 Jun 12
    5:52 pm

  8. Writing as a writer & composer (formerly also a performer) who has written in modern “classical”, film and pop modes, with physical CDs for sale online since 1996, I consider the situation for “primary creators” to be much worse than that outlined in this article, valuable as its insights are. Dan Rosen’s prediction of a 60:40 split between digital and physical music sales is already way off mark. On the sales figures for my modest operation i put it already at 80:20, but the dollar implications are much worse, since the $ value of intellectual product sold in its digital form can be currently measured in fractions of a cent versus dollars. Let me sum it up by suggesting that the impact of digitisation of “content” and the relegation of purveyance of such “content” to social media has almost totally banished mind from the universe of human interchange. For example, consider “content” created by “words”: TV drama series on commercial channels are paid for from advertising revenue from which professional writers are paid to create the “content” of drama. But advertising revenue is moving to social networks. Who creates “content” here? Bloggers. Gossip reigns. No payment for gossip. Now on to “content” created by sounding musical “notes”. Are musical bloggers paid to create “content”? Are the resulting data files paid for when shared? Does this activity amount to an ongoing industry? Work it out.

  9. wow
    20 Jun 12
    10:31 pm

  10. ^^ warning – do not read dereks post whilst under the influence of illicit substances.


  11. paul
    21 Jun 12
    11:12 am

  12. Ah, sounds to me like the familiar story: money vs love. Should I be paid to blog?
    If this discussion is about about the future of music (good music will always win out), then it’s probably as much about TIME as it is about money.
    When all the world’s magnificent cultural produce from pretty well all time is available at the click of an illegal-ish button, how will we choose to spend (!) our time? Where is the value, not just $$, but meaning, happiness, etc.
    Brands? Well, of course this looks promising to the media spinners, cos it’s the current explain-all theory. But it only works if brands are understood as just short-hand ways to signal something interesting and valuable going on. If they’re hype (spice girls, Masterchef, etc), it’s a short-term fix, and finally a dead-end. Viz EMI’s demise. Is Miles David a brand? Well yes, if necessary, but a whole lot more.
    And please tell me: if advertising is supposed to be the magic force somehow underwriting the cost of the mainly free internet (Google’s classifieds, Facebook’s social connections, etc), who would put their hand up for having ever EVER clicked on an on-line advertisement? Who doesn’t immediately cut the volume on those re-played TV ads that clutter SMH videos, for example. I reckon it’s Cargo Cult territory: emperor’s new clothes all over again.
    And when is the Pirate Party going to put its flag up down under?! 30% of the vote in Euro elections with no promo budget?! YO!

  13. Craig
    29 Jun 12
    6:36 am

  14. Perhaps the issue is that most music has far more value to its creators and a small group of dedicated fans than to the rest of the community.

    AKA most music is not as valuable as its creators believe it is.

    The 20th century saw a blip when mass media and mass distibution, supported by high cost content creation and distribution systems combined to form an environment where a few content creators could soar to amazing heights of awareness and profit.

    This is not historically true. Great composers, musicians and artists did not previously receive enormous monetary wealth. In many cases they did not even receive much respect or recognition during their lifetimes. How many paintings did Van Gogh sell?

    Most musicians even through the 20th century didn’t make much money through sales of their creations, despite what the publishing industry would have people believe. Essentially distributors built a sausage factory for content, even going to the extent of manufacturing fake bands to meet market niches they felt were profitable.

    Like the stock market it was driven by hope, greed and fear. Musicians hoped for a big break, which would see them rewarded beyond their wildest greeds. Distributors feared having a competitor discover the next performer who would ‘go all the way’ ahead of them and built systems that worked off the naiviety of young dreamers to lock them into punishing contracts where they had to deliver a certain amount of pre-packaged content on a regular basis.

    There is no reason to believe that the state of music up to recently represented a permanent change in the market and that (again realistically only a few) musicians could expect huge profits from their creations.

    The market is continuing to evolve, and it is too early to see the final form, however take out massive distribution costs and machinery there’s no justification for the price points charged today.

    By preserving production, wholesale and retail margins, music distributors are now at war with music consumers and producers.

    They are artificially controlling supply to preserve their profits and control as middlemen, at the expense of both artists and music lovers.

    Just don’t expect the people who benefited the most from the 20th century to be the people to ‘fix’ the industry in the 21st. It is extremely rare for the most profitable part of an industry to reinvent itself successfully – their entrenched interests have too much to lose.

    The solution will most likely come from the edges, from a direction no-one expects.

    Therefore asking the people most embedded and acculturalised into the present-day music industry to ‘solve’ the issues it faces is not likely to provide many new insights.