Why I'm Bullish On The Music Business

Posted by Aaron Davison on Friday, December 5, 2014

I have to be honest.  A couple years ago I started getting really jaded and cynical about the music business.  I started to really buy into all the doom and gloom about the decline of the music business that is so prevalent amongst many musicians I know.  Although I wouldn’t admit it to that many people, I started to feel like I had chosen the wrong profession.  It started to feel like I had made a commitment to a path that was simply too treacherous and too uncertain.  I started to think that maybe I should admit defeat and go look for a “real job”.

Ultimately I never gave into those feelings.  Not necessarily because I felt like those feelings were wrong at the time, but because I couldn’t really find anything else to replace my passion for making and performing music.  I never considered giving up music to go sell insurance or something like that.  But I started to think maybe I had other latent passions that I simply hadn’t allowed to express themselves, that would be more lucrative.  So during this time I started doing some soul searching and gave a lot of time thinking about what else I would do if music didn’t play as big of a role in my life.  What did I find?  Nothing really.  I mean sure I have other interests.  I like to read. I like to surf. I like to swim and play tennis.  I like to drink wine.  However I didn’t like any of these things enough to pursue them professionally (although being a professional wine taster would probably be a pretty good gig).  The long and the short of it is, I don’t have anything else in my life that I’m as passionate about as music.  I’ve looked for it and it’s just not there.

So, I kept going.  I kept writing songs, recording them, playing gigs and doing my thing. This period of uncertainty eventually passed and I started to feel not just sure of myself and my path again, but I started to feel something I hadn’t felt in a long time about the music business, optimistic. 

I have to be honest, most of these feelings aren't really based on data or facts.  I have little evidence to point you to that my optimism about the music business is warranted.  Sure, I’ve done videos where I point to statistics that support my assertion that the music business is still, in many ways, thriving, and at the very least not dying.  (See http://youtu.be/w7Dz9HrypEc )   But the feeling I’m talking about is more of an intuition that the music business is going to keep getting better in the coming years.

I realize that I can’t really make a case based on intuition alone, so I’ll try and provide some tangible things to think about as to why I think the music business is headed in a positive direction.

Here are few….

Youtube - To be honest, I’m far from being an expert on youtube.  But if anyone makes media and isn’t excited about the potential that youtube and sites like it represent, in my opinion you’re not quite fully realizing the potential that this new medium offers.  I have a relatively small youtube channel for my website and my music and I get just several thousand views a month.  I’m a small player compared to other youtubers, some of which are racking up millions a views a month. But even my relatively small numbers make a big impact on my business and my ability to get my message out and promote myself.  If you think about what youtube is, which is essentially a TV channel that anyone can create programming for and potentially get paid for, it’s hard not to be excited.

Of course, doing well on Youtube takes time and dedication like anything else.  So what?!  We all now have at our fingertips a global channel to spread our art, media and content around the world to potentially millions of people.  And it’s free!

The internet, Spotify, etc… - I realize that there is a lot of pessimism about streaming music and in many ways those feelings are warranted.  However, most of this negativity is based on the current payouts for these services, which for most of us are pretty dismal.  The thing to keep in mind though, is that the music business and services like spotify are dynamic.  It’s changing.  The music business is not going to look the same in five, ten and twenty years.  It’s going to keep transforming and I think for the better.

Why?  I think we’re in a very new phase of the music business that will keep improving over the next couple decades. We are in a new ground floor.  Sites like Spotify are still relatively new and as they grow their user base, they’ll increase revenue and increase their payouts.  I also think that sites like Spotify will continue to modify and improve their business model in order to generate more revenue for themselves and the artists they work with.  ( I created a recent video about Taylor Swift and Spotify recently where I break down my thoughts on their service as it stands, check it out here: http://youtu.be/EfhW3aMTJQM )

Another consideration regarding sites like Spotify is that many of the complaints in terms of revenue are made relative to what artists make from CD sales.  This really isn’t a fair comparison. A better comparison would be to compare Spotify to something like terrestrial radio.  Using this barometer Spotify actually already comes out ahead in terms of what they payout to artists.  (See http://www.billboard.com/biz/articles/news/1155395/business-matters-why-spotify-royalties-are-greater-than-radio-royalties )

A very valid concern is that if your music is on sites like Spotify that there is little incentive for people to buy your music, if they can simply listen to it on demand online.  This is a legitimate concern for musicians but I think this issue will be addressed in the near future.  There is already talk about moving away from completely free models of unlimited streaming.  (See http://finance.yahoo.com/news/era-of-free-digital-music-wanes-160154279.html )

Decline In Recording Costs – The other great change that happened over the last decade or so is that recording costs have dropped dramatically.  Although I still think you need to have some professional help in terms of producing music for things like licensing, recording costs in general are much more affordable than they were 10 or 20 years ago.  Now if you have some songs and want to record them and get them out there, it’s within reach.  Recording your music professionally isn’t something that you have to take out a second mortgage to accomplish.  If you have a dream and a couple thousand dollars you can, at the very least, throw your hat in the ring.

Think about it, for basically the first time in history, ever, recording music and distributing it around the world is something that is attainable to almost anyone, certainly to anyone in “developed” countries.  I have artists send me music from literally all over the world. I get submissions from places like Uganda, Argentina, Nicaragua, Guatemala, Colombia, Pakistan, India and on and on.  Of course, creating music and creating a successful career in music are two very different things, but never has it been easier to at least try.

Don’t mistake my optimism for naivety, I realize it’s not easy.  But has pursuing a career in music ever been easy? I don’t think so.  It’s always been a path reserved for dreamers, non conformists and the like.  But now, if you have a dream AND are very ambitious you have channels that are easily accessible to put out into the world what it is you do.  What happens after you put your art and music out into the world is out of your hands.  The public ultimately decides what makes it and what doesn’t. But there are no longer excuses for not trying.

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