Covid 19 Causing Accelerated Music Industry Consolidation?
Covid 19 has undoubtedly changed our world so far and it seems like it’s only getting started. The music industry has taken a substantially economic hit and one can only imagine what the repercussions of this will end up being.
One thing we know for certain is that it is becoming increasingly more likely that we will see further corporate consolidation of the music industry; smaller labels that were operating on the edge of profitability before Covid, will now be forced to sell to the bigger players and thus consolidating the industry even further.
From 1988 to 1999, there were a total of six major record labels in the industry. There was Warner Music Group, EMI, Sony Music, BMG, Universal Music Group and Polygram. By 1999, only three remained: Warner Music Group, Sony Music and Universal Music Group. According to Will Meyer of “CASH Music” article “Taking the Music Monopoly Serious”, “(…) most of these companies are also vertically and horizontally “integrated,” meaning they own other companies that are relevant to their financial success. For example, Sony, Universal and Warner — The Big Three — are all partial owners in Spotify. Live Nation, meanwhile, owns Ticketmaster and has tentacles in venue sponsorship, artist management and promotion. Spotify is branching out into music journalism and playlist “curation,” as well.”
One can start to see the possible negative repercussions of this consolidation. It’s possible that this will make it even harder for artists to “make it” in the industry, given that they have less pathways to pursue the best possible deal. A lot of upcoming artists will be forced to take a more long term, less paying deals because there will essentially be no other label to go with. This can then overall reduce new artists coming into the industry as most will find it harder and less worthwhile to get started.
The consumers are also at risk of being “forced” to listen to only “corporate backed” artists. Streaming services could be exceedingly more at risk of promoting only “corporate backed” music and limiting the consumers choices even further.
It feels that in a sense, this is leading to control of creativity. For example, If you as an artist are not making music that appeals to a wide range of listeners, you will essentially be not worth any promotional resources the labels are willing to spend on you since they could have a better return on investment with another artist that’s more “popular”. What we could ultimately end up with is a downgrade in the overall music quality. This is quite similar to what is happening in the Movie Industry as of late; the major producers are looking for more movies that are a “safer bet” which leaves us with a lot of movies that have the same general plot lines or a bunch of remakes and sequels.
It seems that we will also start to see more AI produced music. As the cost for this production is decreasing on an exponential scale, the major labels will be more prone to use this technology since it has the potential to create huge returns. We are already starting to see 100% AI produced streaming services like “Relentless Dopelganger” which streams 24/7 AI created heavy metal songs, starting to pop up in the marketplace. Will this lead to a decrease in the overall popular music quality? Only time will tell, but one thing is for sure, it’s bad news for traditional musicians.
The music industry was already consolidating well before the Covid 19 outbreak, but it seems that there is a good chance we can see its changes and deviations even faster because of the recent crisis; from exceedingly higher live music ticket prices to a further grip on musical creativity, the future for music unfortunately looks increasingly concerning and challenging.