Reports Music

Creator Tools The Music Industry’s New Top of Funnel

Report by Mark Mulligan
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The 20,000 foot view: Music production has traditionally been, at best, an adjacent industry to the recording business, and at worst simply a cost centre. That is now all changing.        disruption catalysed the already-rapid shift towards affordable production tools and the rise of a new generation of online platforms that are reimagining music production as SAAS-based communities. This represents the most important product strategy shift music has faced in decades, but it is also much more than just that. Adding to an already vibrant creator tools marketplace, this new breed of services is reinventing the creative process and will similarly reshape the long-term view of what a music company is. The production business and the recording business are about to become intertwined.

Key Insights

CREATORS AND THE CREATOR TOOLS MARKETPLACE

  • Music creators are a large, addressable audience        million strong, of which        million are self-releasing artists direct, up        from        million in        was a catalyst for music production:        of independent artists made more music and        did more online collaboration during lockdown, with music software and hardware sales booming and key search terms doubling
  • Production, distribution and marketing are the three aspects of the music value chain that artists consider most critical to invest in for success:        regularly spend on plugins and VSTs,        on marketing,        on distribution

MUSIC PRODUCTION

  • FL Studio, Logic Pro and Ableton Live are the most widely-used digital audio workstations (DAWs), but this stable market is being transformed by new tools and workflows
  • Artists are spending heavily on software and sounds, with electronic music producers spending more than a thousand dollars a year on these categories
  • The music software space is saturated, complex and can feel inaccessible to new producers; there are more than 2,000 software products in market. A new breed of music tools is emerging that instead focuses on simplicity and elegant design
  • The music software market has a long tail of companies but also has a significant number of large and medium-sized players, including Avid        million), Native Instruments        million) and Ableton        million)

OUTLOOK

  • Music software, sounds and services generated        million in 2019 with Plugins and VSTs the largest single segment        and total revenues will grow to        billion by 2027 with sounds and services the two largest growth drivers
  • Growth will be driven by new models, more self-sufficient tools and the rise of SAAS services, making the market majority subscription by 2026, with subscription services reaching        million by 2027, up        from        million in 2019
  • SAAS-based creator tools are becoming the new top of funnel, establishing meaningful relationships with creators before they even release. Creator tools will push down the funnel while streaming services will use creator tools to push up
  • Collaboration and audience participation will become ever more central to the making of music, a trend that will be accelerated by younger audiences

Companies and brands mentioned in this report: Ableton, Ableton Live, AIR, Akai Professional, Aloha, Amuse, Android, Apogee, Apple, Arcade, Avid, Beatstars, BandLab, CD Baby, Elk, Fender, fiverr, Google, Image Line, FL Studio, Garageband, Guitar Center, iPhone Pro, Kontakt, LANDR, Logic Pro, Logic Remote, Maschine, Mixcloud, Native Instruments, Output, Pro Tools, Reverb, Roland, Soundbetter, Soundcloud, Soundstorming, Soundtrap, Splice, Spotify, Structure, TikTok, Traktor, TuneCore, Waves, YouTube

NOTE – The dataset published alongside this report includes:

  • Music software, sounds and services revenues and forecasts
  • Creator tools revenue value chain
  • Music software availability tracker (plugins, VSTs, DAWs, rent-to-own, platforms, DJ tools)
  • Creator tools company directory

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