There’s been a flood of stories about the changing nature of the music industry recently. The recent stories are just the latest in a long line of industry reactions to the evolving marketplace.

From the Pirate Bay saga and Kim ‘Dotcom”s ongoing Megaupload drama, through fears about CD duplication, to the British Phonographic Industry’s ‘Home Taping is Killing Music’ campaign in the early ’80s, the music industry has been fighting to come to terms with new developments since our ancestors worked out how to shape grooves into plastic cylinders and discs all those years ago.

The latest ominous prediction of consumer trends comes from the Music Industry News Network, which reports a study by US-based technology research company Gartner Inc claiming that consumers will store more than a third of their digital content in the cloud by 2016.

Although Gartner’s report concerns all digital content, the implications for the music industry are substantial – in terms of piracy, access to data and, perhaps more importantly, monetisation.

Compare the situation with the infamous Spotify artist revenue story last year and artists and labels have good grounds to be concerned – not least with which agency/ies will police the new cloud-based music economy.

The story ties in with an excellent piece we spotted last month from the Future of Music Coalition. Kristin Thomson’s thorough analysis of musicians’ income from sound recordings makes for interesting – if heavyweight – reading.

Although the study covers a range of genres from classical to pop, the key finding is that the majority of artists recording and producing today are being forced to come to terms with the fact that sound recordings – the traditional bread and butter of the professional recording artist – are becoming considerably less reliable as a source of income.

Click to enlarge. Source:

Increasingly, the report continues, musicians are turning to other revenue streams to generate income from their music – from session fees and merchandise sales to commissions and grants. Indeed, more than half of all respondents said they earned money from three or more roles.

Whether new cloud-based trends will tilt the balance back a little remains to be seen, but a potential move away from the dominant iTunes model of music downloads towards a direct-to-cloud replacement predicted by Gartner could have a number of implications; maybe not all of them bad.

In other related news, Music Week report Alison Wenham, Chief Executive of the Association of Independent Music, calling for patience with Spotify last week. The independent labels’ view should be contrasted with Business Insider‘s report that Spotify is now the second biggest source of revenue for majors.

The war of words aside, who can really say whether Spotify will still be relevant by the time a fair payment deal for all labels is agreed?

10th July, 2012

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