Are Livestreams the Future for Musicians?
Even before Covid-19, fans and musicians were flocking to live streams in massive numbers. This has everyone wondering: could livestreaming be the future of the music industry?
Let’s face it, the past 2 decades have not been great for musicians. Between online piracy, streaming services and record labels that hold on to huge portions of artists’ profits, and a global pandemic, making a living as a musician is harder than ever.
This might explain why so many musicians are turning to a new type of content medium. One whose growth in the last 5 years was over 130% and is expected to be worth anywhere from $180 - $250 billion by 2027.
To understand why livestreaming may be making such a revolutionary impact in the field of music, we first need to understand its history, and how we got to a point that so many of our society’s talented musicians are looking for a change.
For most of music history, looking for new talent meant actually going to bars, pubs, and clubs either on your own or (hopefully) with a few friends. The Beatles didn’t just walk up to producer George Martin and demand that he record Please, Please Me for them. They were discovered playing in bars in Liverpool and Hamburg, and invited by the studio to make an album.
The good news is that today you don’t have to go from open mic to open mic hoping you stumble across a sound you enjoy. In a world connected by computers you can discover new music and musicians on a daily basis from your home.
From the earliest days of the internet a permanent shift was made in how audiences found their next favorite song. One site in particular would change how music was enjoyed and listened to by millions of fans, and begin a struggle between artists, fans, labels, and online platforms that has lasted until today.
Napster was a simple yet ingenious concept. By allowing data to be compressed into an mp3 file it could be shared between millions through a peer-to-peer network. All for free.
Naturally, artists weren’t thrilled about no longer making royalties, and the site was brought down by a $300 million lawsuit. Instead of stopping illegal downloads, Napster’s fall allowed for dozens of other sites to take its place, and free music downloading spread like wildfire.
Revenues for the music industry were in freefall, and nobody had any clue what to do. Who wants to buy CDs when every song you love is available online for free? Apple tried to create a profitable market with iTunes, allowing users to purchase a song for download for a mere 99 cents. But it still wasn’t free, and people kept pirating music.
It got so bad, that by 2008, the IFPI estimated that 95% of all digital music was being downloaded illegally. Every time law enforcement successfully shut one down, another site stepped in to take its place.
Clearly paying for downloads wasn’t working, opening the door for streaming. In 2005 three former PayPal employees launched YouTube. Although not the first video streaming site it quickly exploded in popularity, particularly for music.
In 2006 and 2007 music streaming sites like Spotify and Pandora were launched, bringing millions of listeners away from piracy and towards more legitimate sharing sites. Clearly, these companies were on to something.
Streaming technology worked in a surprisingly simple way: a platform would deliver continuous data in small amounts to the user, who would get a pre-buffered song or album on their device.
With a powerful enough connection and broadband, users could get an unlimited amount of music delivered straight to them no matter the size of their device, since nothing was ever stored or saved.
In 2011, 80% of music sales were dominated by physical sales. By 2020 streaming had changed the market, and 85% of all sales were now digital.
Despite these impressive figures the industry still hasn't managed to match the peak of its success in 2001. While streaming brought those figures up, much of its success was believed to be due to people making the switch from physical to digital. That growth is slowing down though.
Between 2014 to 2015, the streaming industry grew by an impressive 32%, a trend that more or less continued up until 2018. Between 2018 and 2019, music streaming grew less than 20%.
I’s unclear whether or not these services will be able to provide a sustainable financial model in the future. MIDiA Research has predicted that by 2026, the streaming industry can realistically expect a growth of 7%. This is considered, by investment standards, to be stagnation.
Can the streaming industry overcome this? Unfortunately growth isn’t its only issue. Streaming has been a magnet for controversy.
Earlier this year the British DCMS, or Department for Digital, Culture, Media, and Sport, engaged in a series of hearings to determine whether artists are being paid fairly by streaming services. While the streaming services themselves are arguing that they pulled the music industry from the brink of destruction, artists are complaining of being intimidated into silence and one record boss described it as “living in cuckoo land.”
According to the hearings, artists can be paid as little as 13% of the income generated via streaming, receiving as little as $0.0028 to $0.0052 per stream on Spotify and about $0.0081 on Apple Music. As a result, artists have been forced to rely on touring in order to earn for their music.
By the end of the hearings, chair of the DCMS Committee, Julian Knight MP said:
“While streaming has brought significant profits to the recorded music industry, the talent behind it - performers, songwriters and composers - are losing out.”
History was made on June 24, 1993 at a little place called Xerox PARC in Palo Alto, California. There, a group of scientists and researchers had come together to form a band, Severe Tire Damage.
That band of accomplished researchers, in coordination with computers from Xerox PARC, Apple, and DEC Systems, created the world’s first music livestream, heard as far away as Australia.
In 1998 people began to take livestreaming seriously after George Washington University hosted the Third Way Politics in the Information Age webcast with a very special guest host; then-President Bill Clinton.
A year prior, live streaming was pushed to its limits. 4 friends broadcasted a 24/7 livestream of Justin living his life. That site, originally known as Justin.tv, eventually became Twitch.tv, now one of the most popular livestreaming sites in the world.
However, livestreaming has one company above all to thank for its explosive success. YouTube. In 2008 YouTube hosted it’s very first YouTube Live. Just 3 years after the company’s founding, celebrities like Katy Perry, Smosh, and Bo Burnham were being interviewed and interacting with fans, all in real time.
Today it seems like every site, from TikTok to Reddit, is investing in livestreaming. They all offer, with limitations, opportunities for content creators to produce live entertainment in various forms.
This has also led to the growth of various livestreaming apps. Tango is one of the biggest front-runners in this world. It offers artists the opportunity to monetize their art in a way that traditional streaming simply can’t offer.
Unlike with streaming services such as Spotify, YouTube, or iTunes, streaming apps like Tango don’t take the lion’s share of the artists’ earnings. Instead, 70% of every dollar made on the app goes directly to the artist.
Not only that, but Tango allows for artists to collaborate, interact with fans, and put on concerts that they are in control of. No more managers, venue owners, or production assistants reaching into the pockets of the artists who are driving the broadcasts forward.
Currently, live streaming concert sales amount to $20 billion worldwide, with an estimated growth of nearly 2% each year. That’s just for organized music sales though, which generally benefit the professionals whose concert sales can attract global audiences.
For many musical stars, selling tickets at a cheaper price with the potential to reach a much larger audience is preferable to touring worldwide and performing for a limited audience.
At a time when “online content is king” many artists are sparing no expense to create a livestreaming audience that translates into real dollars. This includes major stars for whom finding fans isn’t an issue.
Sofi Tukker, Timbaland and Swizz Beatz, Dua Lipa, BTS and numerous other celebrities turned to live streaming platforms to keep the show going at a time when leaving the house wasn’t an option for much of the world.
Even as the world opens its doors again, celebrity musicians seem unwilling to give up this newly discovered revenue stream. In an interview with Time, Timbaland explained:
“We’re going to have a hybrid of both live and digital because as you can see the way the world is going. We still like to go out, but this gives us an option.”
While platforms like Instagram Live, YouTube Live, and Twitch are earning artists a much larger percentage of revenue that they would on Spotify (by Spotify’s own estimates, 97% of their artists are making less than $1000 a month), new artists are coming in to a market where their competition is literally the likes of Taylor Swift and Dua Lupe.
For those new artists looking to build a fan base and expand reach around the world, apps like Tango make the most sense. Not only does Tango not require any previous followers, it is also free, and doesn't need the use of any special equipment in order to set everything up and get started.
As an example, on Tango musician, Lelya, the chance to reach out to fans and earn money on her own is an incredible opportunity. Having only started in May 2020, Lelya has since become one of the top earners on Tango. Her live musical performances have already earned her 20,000 fans, including increased traffic to her YouTube and social media accounts. In her own words:
“When I first broadcasted in May 2020, I felt the joy and gratitude of Tango, because my dream became possible: to perform my music in front of the whole world!”
The number one question on everyone’s mind when entering into a new content medium is: is this trend going to continue?
Currently, livestreaming’s financial growth has a predicted increase of 20% year over year from now until 2025.
Viewership is a different story, industry analysts are seeing a trend there with enormous potential: a 50% yearly increase, not accounting for 2020 which saw a 70% rise in viewership during the Covid-19 pandemic.
For new artists looking to get involved in livestreaming it’s important to begin with the correct mindset:
Streaming as a technology is a constantly evolving technology that is still in its early stages. Originally designed as a counter to the endless music piracy online, it has now become the primary income generating technology for the music industry. Sadly, while it has been good for the industry as a whole, it has not been good for artists.
Live streaming is an attempt to balance the scales. To bring the power and income back to the creator. As musicians both famous and just starting out make the choice to move their music to live streaming, it is possible that we will see a major shift in the power and focus within one of the biggest industries in entertainment.
Ultimately, it will be up to the artists themselves to decide whether or not they will take control of their own music. It might be difficult at the beginning, but being able to keep your music profits is something that no artist should turn away from.