The Death of the Long Tail: The Superstar Music Economy

The 20,000 Foot View

The 21st century decline in recorded music revenues continues to send shockwaves throughout the music industry and although there are encouraging signs of digital-driven growth, the impact on artists is less clear. The concentration of the majority of recorded music revenue around a small share of musical works has led to the emergence a Superstar artist economy.  The promise of the long tail proved to be illusory and the resulting picture is one of contrasting fortunes of the super successful and the rest.

Key Findings (Data Points Are Removed From This Preview Summary)

  • Total global artist income from recorded music in 2013 was $X billion, down from $X billion in 2000
  • Artists’ share of total income grew from X% in 2000 to X% in 2013, driven by factors such as higher revenue shares on some digital deals for artists
  • Of an average $0.99 single less than half goes to the label and artist combined, with sales tax, retailers and publishers accounting for the remainder
  • The recorded music market is a ‘Superstar artist’ economy with the top 1% of musical works accounting for X% of all artist revenues
  • The concentration is a reflection of the natural bias of music towards hits but digital stores and services have an even strong bias towards the top 1%
  • Digital concentration is driven by a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery
  • The democratization of access to music distribution has delivered great benefits for artists but has contributed to even greater confusion for fans, ironically culminating in an intensification of the superstar effect, with the successful artists relative share of the total pot of musical works getting progressively smaller
  • Superstar artists does not mean an absolute domination of major label artists, indeed many independent artists have broken through into the top 1% and independent repertoire can often over index on digital services
  • The catalogue arms race has become entirely detrimental to consumers’ digital music experiences, and action needs taking urgently to make sense of 25 million songs, not just through discovery and editorial, but also by taking the brave decision to keep certain types of content, such as sound-alikes, outside of music services’ main functionality

Companies mentioned in this report: Vevo, YouTube, PRS for Music, Big Machine Records, XL Recordings, Glassnote

Price includes excel dataset