Why Online Music Distribution is Dying
Online music distribution, the process of delivering music to listeners through digital platforms, has been the dominant mode of music consumption for the past decade.
However, recent trends and developments suggest that this model is losing its appeal and viability for both artists and fans.
Let’s explore some of the reasons why online music distribution is dying and what alternatives are emerging in its place.
The Low Revenue Share
One of the main drawbacks of online music distribution for artists is the low revenue share that they receive from the platforms that stream their music.
According to a report by Soundcharts, the average payout per stream for Spotify is around $0.00348.
This means that an artist would need about 288,000 streams to earn the U.S. monthly minimum wage of $1,000.
In contrast, independent music distribution platforms like Bandcamp offer artists a much higher revenue share.
They only take a commission of 10–15% from the sales of the music.
This means that an artist would keep 85–90% of the revenue generated from their music sales, regardless of the format or price.
For example, if an artist sells a digital album for $10 on Bandcamp, they would earn $8.50–$9, compared to $0.0348–$0.056 if the same album was streamed 10 times on Spotify or Apple Music.
Bandcamp also allows artists to set their own prices or use the "pay what you want" option.
This gives fans the freedom to pay more than the minimum price if they want to support the artist.
This can result in higher earnings for artists, as some fans might be willing to pay more than the average streaming rate for their music.
The Lack of Direct Fan Engagement
Another disadvantage of online music distribution for artists is the lack of direct fan engagement.
Music distribution platforms act as intermediaries between artists and fans, which reduces the opportunity for direct interaction and feedback.
For instance, Spotify does not allow artists to communicate with their listeners through the platform, nor does it provide them with detailed data on their fan’s preferences and behaviors.
This makes it harder for artists to understand and connect with their fans and to tailor their music and marketing to their specific needs and interests.
Online music distribution platforms tend to favor established and popular artists over new and emerging ones.
They use algorithms and playlists that promote the most streamed and profitable music rather than the most diverse and innovative.
This creates a vicious cycle where the same artists get more exposure and revenue while the others get less attention and recognition.
On the other hand, independent music distribution platforms like Bandcamp give artists more creative control and direct fan engagement.
They allow them to decide how their music is presented, packaged, and marketed without any external interference or commercial pressure.
Artists can choose the format, price, and design of their music and experiment with different styles and genres without worrying about the approval or rejection of a record label or a distributor.
Bandcamp enables artists to connect with their fans, build relationships, and receive feedback through its features, such as the fan account, the messaging system, and the community section.
Artists can see who buys their music, what they like, and what they say, and respond to them directly through the platform.
This creates a more personal and intimate bond between artists and fans and fosters a sense of loyalty and support.
Bandcamp also gives you your customer’s email addresses.
This is a database you can use to promote anything, from event tickets to merchandise, etc.
The Increasing Competition and Saturation
A third drawback of online music distribution for artists is the increasing competition and saturation of the online music market, which makes it harder for artists to stand out and reach their target audiences.
According to a report by MIDiA Research, there were over 70,000 tracks released per day on Spotify in 2020, which is equivalent to 1.2 tracks per second.
This means that there is an overwhelming amount of music available on the platform.
So, the chances of any given track being discovered and listened to by a potential fan are very low.
The report also found that the top 10% of artists on Spotify accounted for 99.4% of all streams.
The bottom 90% of artists only accounted for 0.6% of all streams.
This shows that there is a huge disparity and inequality in the online music market and that most artists struggle to get any attention or revenue from their music.
In contrast, independent music distribution platforms like Bandcamp offer artists a more level playing field and a more niche market.
They cater to specific audiences and genres that might not be well represented or supported by mainstream music distributors.
Bandcamp has a diverse and eclectic range of music genres, with over 500 genres chosen by study respondents when asked what music they listen to.
This means that there is something for everyone on the platform and that artists can find and appeal to fans who share their taste and style.
Bandcamp also helps artists get more exposure and visibility by featuring them on its homepage, blog, radio show, social media, and editorial section.
The best part is that you don’t need to be famous to get featured; all you need is good-quality music.
Fans have paid artists and their labels $1.24 billion using Bandcamp and $194 million in the last year.
Bandcamp is a popular and profitable platform for independent music distribution, and it offers artists a lot of opportunities and advantages over commercial online music distributors.
