Since COVID-19 stormed the world by surprise in the first months of 2020, the music industry suffered a significant impact in its business model: what was once a six-month hiatus for live events has stretched itself to almost two years of no live concerts or music festivals in most countries, costing the industry billions of dollars around the world.
Adapting has not been an easy task, but new models have emerged to give continuity to events, like the Fortnite concerts that artists like Ariana Grande, Travis Scott, and Marshmello have put up or the Post Malone virtual concert for Pokémon's 25th anniversary.
Another big change is the importance of music streaming in total revenues, which went from 9% to 47% in just six years.
These two aspects are the most notable since the live event ticket sales make up to 50% of the industry's income, and recorded music (streaming, digital downloads, physical sales, licensing) makes up for almost the second half of this revenue.
5 major changes COVID-19 has brought to the music industry
1. Sales
Physical sales represented almost 25% of the music revenue before the worldwide pandemic; since one of the first consequences COVID-19 had on the economy was the closure of retail stores, this comes as no surprise, contrary to digital sales which dropped around 11%, stating that expenses around the world became more discrete, focusing more on basic necessities.
2. Streaming
Streaming habits presented major behavioral shifts. The change in people's routines affected when, where and how people listen to music: since activities like commuting and going to the gym stopped, music streaming went from mobile (smartphones, tablets, and laptops) to home devices (TVs and virtual assistants).
Platforms like Spotify added more subscribers at the beginning of the pandemic, which also had a big impact in...
3. Advertising
Spotify announced that the change of budgets for advertising contributed to missing 2020's first-quarter advertising targets, as the music industry's advertising spend fell 46% worldwide. This affects mainly ad-supported music channels in platforms like YouTube, which represents both total industry revenue and individual income for some artists.
4. Engagement with fans
As massive live events have come to a stop worldwide, artists needed a new way to reach them, turning to tools they certainly had previously used like Twitch, Instagram TV, Facebook Live, and other platforms to live-perform, share content, and interact with their audiences in a more direct, intimate form.
5. Distribution
Without touring, live concerts, and other in-person gatherings to promote new music, artists have been having a hard time distributing their material, especially if they're not signed with major labels or are starting in the industry. That's when outsourcing a provider comes in handy to distribute and boost new music into platforms like Spotify, Deezer, and more.
Right now, a future without COVID-19 is uncertain. The world is changing, adapting, evolving, and so must we. Take note of these insights and take action to develop a strong strategy for your career, and remembering that when it comes to music distribution, the Indiefy team is your best choice to take your music to the next level.
