Less Artists Going Platinum May Be The Best News The Music Industry Ever Had

During an earnings conference call on Monday, Warning Music Group, the third largest recording company on the planet, stated they generated more money from streaming than they did from digital downloads. That’s no small feat, and as Re/Code notes, this “is the first time a big music label has hit that milestone.”

A Warner Music press release reads:

“We experienced significant revenue growth this quarter across key segments of our business – in particular Recorded Music, across the U.S. and international and across digital and physical – capping off a strong first half of our fiscal year” said Stephen Cooper, Warner Music Group’s CEO. “Notably, in this quarter we saw continued growth in streaming revenue which surpassed download revenue for the first time in the history of our recorded music business.”

Streaming based music revenue from sites like YouTube, Pandora, Spotify, and Beats Music increased by over 33% during Warner’s March quarter. Meanwhile, revenue from digital sales increased by only 7%. This tells us the growth of streaming is significantly outpacing digital downloads.

In fact, Apple is poised to release it's own streaming service later this year.

I explained in an earlier article ways Spotify can earn artists more money, and the above statements support that claim.

You'd have to understand something about advertisers to understand my train of thought. They flock to where the people are. Think about the way you advertise your music?

You flock to where the people are. You go on Twitter, SoundCloud, and YouTube because people are already there! They have a customer base that you're trying to turn into your fans.

All you're doing is borrowing traffic off someone else. Why? Because it's a low barrier to entry and it's free.

Spotify has the same model.

I've heard one too many people say about music, "Why would I pay for something when I can get it for free?" Before, there was a morality complex (for those aware of morals) that they shouldn't steal music, just as they shouldn't steal movies.

With services like Spotify and Netflix, that excuse is off the table! People have widely shown they're willing to pay small monthly fees for unlimited access to music and movies.

This means what I've been trying to tell artists all along. Having a Buy on iTunes link below a song is NOT selling your music to anyone. It's simply making them aware that it's on iTunes. You're going to need to learn marketing if you want to still make a good chunk of revenue off album sales independently.

It's possible, but you have to know what you're doing.

People buy music from people they have a connection with. Even when they can stream for free. They buy because they genuinely like the artist.

Less artists going platinum means that the playing field is being leveled for independents. You no longer need a label to make a career out of your music. In fact, the only label I'd want to be under is one I start myself. Being independent is far better in my eyes at this stage in the game, but I may write on that later.

Digital sales aren't increasing as fast as streaming is, but revenue is up.

I don't know about you, but I don't pay my bills in albums sold. I pay it with the revenue earned form my music business. If cash flow is up, that's good news for artists.