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Streaming Music is Finally Paying the Bills

Since the fall of the CD format, there was a general consensus that for minor genres and artists music streaming was a very bad business model. Now there’s many reports from New Age music artists that something has changed; streaming is beginning to pay. Indeed, quite a few artists are now living on royalties alone. It seems like the business side of things has evolved. If that is the case, the future of music has arrived!

For a major pop star or group, streaming was a great business model from day one. If you sold a few million CDs or had a few billion streams, you earned about the same. But for an artist who used to sell 2000-5000 CDs a year, it was hard to get the number of streams up enough to make a living from streaming alone. This has now changed for many artists.

A new day
Since we here refer to independent artists, it is hard to get good and accurate data. But once in a while we get a glimpse into the studio economy of independent artists.

By Mr. Adams:

Check out this interview with Michele McLaughlin on DIYmusician.com.

Today more and more artists are able to get several million streams. To get a decent income and avoid holding concerts, touring and selling merchandise, it is safe to assume that you will need at least 10-20 million streams a year – depending on your expenses.

Spotify and Pandora
The driving forces here are, of course, Spotify and Pandora. ITunes, Tidal and radio licensing are rarely mentioned. CDs are still sold, but few New Age music artists sell more than 1000 CDs per release. Usually about 100 albums are pre-ordered, and the rest of the print is distributed to press, radio and contacts.

Artists used to hide the fact they were on Spotify not to hurt CD sales. That is not the case any more.

Pandora really deserves to be mentioned twice. Although the service is only available in the US, it is obvious that it is very popular among music fans, and creates substantial royalties for artists.

It might be a bit premature to declare that the crisis in the music business is over, but there are definitely signs that the situation has improved. Streaming is perhaps not the milking cow the CD format once was, but artists and labels are making money again. That should be great news not only to artists, but to music fans as well.

Above picture copyright Martina_L – Bigstockphoto