Built for the split: how Create Music Group is positioning itself for a bifurcated industry

The music industry is entering a new phase – less a fork in the road, than a slow but steady divergence. On one path sits the traditional record label model, which monetises music rights via scale of streams. On the other is a new breed of creators who have become disillusioned by streaming, and are trying to build businesses outside of it.

At the moment, the latter group of artists (and their businesses) are a music industry blind spot. 

They often operate more like social media entrepreneurs than conventional artists, build on platforms like YouTube, and focus on monetising depth of fandom rather than scale of listenership. These creators tend not to register as “artists” or as part of the “music industry” – they do not always show up on charts, win awards, or sign to labels. Yet many (e.g., Ricky Tinez, SEIDS, Metta & Glyde) are building sustainable income streams that bypass the major-label machinery entirely. At the same time, the platforms they rely on are not designed specifically for music, and neither are their monetisation tools.

This dynamic means there is a growing opportunity for a different kind of music company: one that can meet the needs of this overlooked segment, without being tethered to the traditional path. Enter Create Music Group (CMG). Founded in 2015 and home to artists including Marshmello, deadmau5, and Sevdaliza, CMG answers the question “if you could build a label from scratch for today’s reality, what would it look like?” The answer is, “not much like a label at all”.

Owning the playground

With its roots as CreateTV, a collector of unclaimed music revenue from YouTube, CMG’s founders were early on monetising music beyond pure-play streaming. The company continues to focus on maximising social revenue through its owned content ID systems, but the real key is in its owned social channels and their content franchises. 

This strategy began with Flighthouse, the social content studio behind franchises like Finish the Lyric and Karaoke Mic Drop. CMG has also acquired accounts with strong followings, like The Nation, the genre-based YouTube channel network in which it bought a majority interest in 2022.

These channels and their franchises serve as monetisation and marketing in one, allowing CMG to control not just distribution but the culture and audience around it. Most crucially, though, they require minimal involvement from the artists themselves. In an era where marketing is increasingly equated with social posts, artists are taking on more of the marketing work they sign to record labels for. To continue delivering value, it is important that today’s music companies can offer artists tools, teams, and channels to lighten the load. However, this support must go towards building sustainable, long-term artist careers and fanbases, rather than simply generating views.

Building an ecosystem

Like other modern music companies (e.g., HYBE, Empire, GAMMA, and even YouTube itself), CMG is building an ecosystem that spans creation, distribution, marketing, and monetisation. In recent years, it has made moves in:

• Creation: CMG Recording Studios
• Distribution: Label Engine
• A&R and frontline: CMG label
• Catalogue: Recent acquisitions include Monstercat, deadmau5, and Pack
• Publishing: CMG Publishing
• Social marketing and original content: Flighthouse Media and other owned networks
• Video rights management and licensing: Yoon

Not only is this infrastructure used for in-house artists, but it also supports a network of 2,500+ labels, including major-label imprints like Interscope and Atlantic. Still, there are some weak spots. Unlike some of its competitors, CMG does not yet own music-making tools (think Splice, Soundtrap – once owned by Spotify – or BandLab), leaving a gap at the top of its funnel.

What next?

CMG has a head start on a bifurcated future, but its journey does not end here. Some strategic moves the company could make next include:

• Acquire or partner with a creator tools company: While CMG offers recording studios, music creation is the weaker link in its ecosystem

• Build a management division: This would allow CMG to further support and participate in artists’ expanded rights revenue
• Expand into D2C: Add or acquire tools for direct-to-fan commerce, positioning CMG as a creator economy hub for the “bifurcated” generation of artists with strong fan loyalty but modest scale

• Develop a micro-licensing platform for sync: A self-serve, subscription or a-la-carte based sync licensing service for content creators of all sizes

• Launch a social-first A&R competition: Flighthouse could develop a competition series on social platforms for scouting new talent through challenges, audience votes, and / or remix contests
• Acquire catalogue, and content, in scene-rich markets: Through label acquisitions and / or signings, CMG could target regions with fast-growing music scenes with strong YouTube channel presence, like Southeast Asia, Sub-Saharan Africa, and Latin America (Brazil’s KondZilla comes to mind)

Built for the split or stuck in between?

As bifurcation theory suggests, the future of music will not belong to one dominant model. Instead, there may be a split: legacy players will optimise for streaming and catalogue, while a new generation of platforms and services rise to serve a new breed of artists. It is possible that the winners will not be those companies which try to do everything, but those which understand what side they are on, and build accordingly.

CMG is in a rare position of straddling both worlds, and right now, this is a strong advantage. As the music business continues to splinter, CMG will help answer a broader question: Can a music company successfully serve both paths?