The old music industry is dead. We’re standing in the ruins of a business built on private jets, Cristal, $18 CDs and million-dollar recording budgets.
We’re in the midst of the greatest music industry disruption of the past 100 years. A fundamental shift has occurred — a shift that Millennials are driving.
For the first time, record sales aren’t enough to make an artist’s career, and they certainly aren’t enough to ensure success. The old music industry clung desperately to sales to survive, but that model is long gone.
Even superstars have it tough. Pitbull — despite having 50 million Facebook fans and nearly 170 million YouTube plays — has sold less than 10 million albums in his entire career. This is the reality of the new music industry, which is built off of liquid attention, not record sales.
Why? Well, the answer lies with us , the Millennials. We’ve taken over the music industry by controlling the two things that matter most:
1. The Demand
The music industry is just like any other big business: It follows cash. Over the past two decades, music has suffered through the CD bubble, torrents, Napster, iTunes (with Apple taking a 30 percent cut of everything) and now, the ubiquity of streaming services, which reduces sales below the already rock-bottom level.
The music industry has been rocked by new trends and over the past few years, has succumbed to a state of near free-fall. It’s clutching whatever few straws are left in an attempt to salvage profit from the remains of its broken business models.
As music becomes more and more entrenched in the digital realm, Millennials have emerged as the dominant consumers. More importantly, we dominate the most promising emerging market for music: mobile devices. We use music, media and entertainment apps more than 75 percent more and social sharing apps about 20 percent more frequently than any other age group.
In a nutshell, Millennials consume the most music and tell the greatest number of people about it. While it’s obvious that consumption is important, why is it so important that we share what we listen to?
The old music industry had a banner metric of artist success: album sales. For years, album sales have been declining and the growth of singles and streaming services have accelerated the trend.
As we’ve transitioned into a digital music economy, new measures of success have emerged. A new generation of artists has hit the scene and they thrive on attention rather than units of music they sell.
The attention has become just as valuable as our likelihood to purchase, as it leads to festival and performance attendance, merchandising sales and other sources of revenue. However, we still won’t buy your music.
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