Skip to content

The Music Industry: Profitability, Innovation and Social Media

    The Music Industry in 2014: Profitability, Innovation and Social Media

    As we look back on the year 2013, we have realized there were some amazing musical projects released which gives us enormous hope for 2014. We are entering a new and prosperous cycle of innovation, profitability and social media. Spurred by the unexpected release of the new Beyonce album, the music industry is headed for an explosive year of artistry and creativity. In addition to this potential burst of innovation, there are many trends that lie ahead for an impressive year ahead of us. The music business is set to receive increased profitability, explosive growth of innovative digital models and a robust social media presence by musicians. This year will bring about massive branding strategies by both artists and labels.

    Profitability is imminent. CD sales still outsell digital downloads. However, digital downloads of singles are growing at an increased rate. We are still operating in a “singles-based” music industry which creates both positive and negative outcomes. What does this mean? Consumers are buying singles because they are cheaper and easier to obtain. That trend will continue to grow throughout 2014. Although this seems profitable, it should be a startling reality for artists and labels.

    Why? Consumers want to be impressed. Their attention span is short and wavering but their buying power is strong. They need the artists to sell them their product in such a manner that causes them to have a very powerful urge to acquire their music regardless of price. Because if they don’t have the album they will feel left out.  Therefore, in order to drive consumers towards purchasing your entire CD, instead of a single, artists and labels will need to reach their fans in an innovative manner and with a very strong brand.  What does this mean for artistry and innovation? There is room for real, authentic, catchy but meaningful music. There is a path designed for artistic leaders, both musically and promotionally.

    There is an unwavering need for good music. Consumers are being quite selective as it relates to their musical choices. The more dynamic and creative you are as an artist, the more you stand to gain new fans. Or, you will be faced with the concerning truth of “they just like your hit single and not the album” thus making it quite difficult for you to tour and perform at a major level. So, make an album full of singles or take a creative approach in your marketing and promotion strategy.

    Profitability will not come from the album sales but from non-unit-based items such Spotify, YouTube and VEVO, SoundExchange, TV, Film and the live performance. For artists, this outlook is great. For record labels, this becomes a troubling reality because it forces them to craft new but tricky record label contracts that seek to tap into other revenue streams of their artists. Revenue streams traditionally not given to record labels.

    Musicians are driving social media. According to RIAA, “You’ll find that 7/10 most followed on Twitter are musicians, 9/10 most watched videos ever on YouTube are professional music videos and that 9/10 most “Liked” celebrity accounts on Facebook are those of musicians.” With this compelling information, it is imperative that artists capitalize on this new and modern way of communicating and reaching fans. Labels and artists must increase their time, resources, money and effort as it relates to social media or find themselves behind the technology curve forever. . A successful brand can be built, developed and cultivated through the efficient and effective use of Social Media. Artist can no longer afford to not have an Instagram, Facebook, Twitter, VEVO, YouTube or SoundCloud account.  It is now a necessity or their careers will deteriorate.

    Indie is the new major. Over the past two years, there has been a very dominant movement for the independent business model. Independent, musicians and labels, are now contributing to the music industry in an immense way. They are visionaries. They are innovators. They are owners. They own their music which means they hold the copyrights to their recorded work. The US recently made history because of the $1 trillion in added value that copyrights offer the economy. According to a US report, “music, movies, books, software, video games, and radio and television broadcasting are the core copyright industries.” The copyright economy is growing faster than the national economy. This is great news for artists, labels and those employed in the music business on an independent basis.  Entrepreneurship in the music industry equates to ownership. This trend is exploding!

    The last trend that will have a major impact on the music business is the global expansion. We are now a borderless society. Therefore, American artists have a unique opportunity to break overseas faster and with a more profitable outlook. The international music market will play a major role in growth here in the US. This is a key trend to watch.

    Musically, we are poised for an explosive 2014!

    Dr.Syleecia Thompson

    Founder, DYG Management Group, LLC

    Creator of Indie is the New Major