The Death of the Long Tail The Superstar Music Economy

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The 20,000 Foot View

The        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

• Total global artist income from recorded music in 2013 was        billion, down from        billion in 2000 
• Artists’ share of total income grew from        in 2000 to        in 2013, driven by factors such as higher revenue shares on some digital deals for artists
• Of an average        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        of musical works accounting for        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       
• 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
• Superstar artists does not mean an absolute domination of major label artists, indeed many independent artists have broken through into the top        and independent repertoire can often over index on digital services
• The catalogue arms race has become entirely detrimental to consumers’ digital music experiences

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