We’ve all heard the complaints about the current Music 3.0 music industry model: physical product doesn’t sell anymore, download sales don’t make up for the shortfall, and streaming music cannibalizes sales and pays a pittance in royalties. Then let’s heap on the accusation that music today is so formula and soul-less and generally a shadow of what it once was.
A lot of industry vets actually believe this, and like everything, there is a hint of truth in it all.
But then how to do you account for Mumford and Sons’s new album Babel being the biggest release of 2012 so far with sales of over 600,000 in the first week of release? How do you account for the fact that there’s been over 8 million listens of the album on Spotify so far, shattering the record for number of streams in a week? How do you account for the fact that new records by superstars Green Day, No Doubt, Justin Bieber, Nicki Minaj, Madonna and Pink have only sold a quarter (if that) of what Babel sold, despite wider ranging publicity campaigns? How do you account for the fact that the Mumfords did this all without a hit single?
When it comes right down to it, there are two principles at work here that are perennial. They’ve worked in the previous eras of the music business and they work now:
1) Your music is your marketing. I preach this in the Music 3.0 Internet music guidebook and it holds true on any level. An artist can only build a brand by repeated listens, either through radio airplay, torrents, piracy, streams, downloads and anything else you want to put in here. The more people hear your songs, the more likely you’ll find an audience for them.
Music is a marketing tool for the artist. If no one hears it, they won’t buy it, or buy merch, or go see an artist in concert. If you limit the way they listen, you limit your marketing ability.
It’s important to remember that most major artists never made their fortunes from the sales of music itself. In fact, there are numerous studies that show that record sales were never more than 5% of a major artist’s revenue stream. For an artist to cut off Spotify because of the peanuts for royalties pay scale totally defeats the purpose of the service to an artist’s brand, as Mumford experience brilliantly illustrates here.