MIDEM conferences celebrate the era of an artist-centric music business

By Emmanuel Legrand

Independent artists can build careers and make a living of it, thanks to a wide range of services, from digital distribution to rights management and monetisation, making the artist-centric music business one of the fastest growing segment of the sector. This new reality, accelerated by the Covid-19 pandemic, was one of the underlined theme of this year's virtual MIDEM conferences. 

  Fred Davis, a Partner at The Raine Group, which helps artists monetise their assets, said the “artists direct” sector, i.e. artists operating outside the traditional label system, is “absolutely the fastest growing segment in the entire music industry.” He added: “It was practically nothing two or three years ago, and this year it will be, we estimate a $2bn sector, 10% of the entire music industry, growing at a 35 to 40% rate year over year.”

 

  One who has build a business around artists is Denis Ladegaillerie, CEO of French digital distributor and service company Believe, which also includes Tunecore, specialising in services to up-and-coming artists. In his keynote with MBW's Tim Ingham, Ladegaillerie shared the belief that if the 2010s was the decade of the rise of streaming, the current decade will see the rise of “local independent artists, because fundamentally we are now at the stage where streaming is the largest form of music consumption. What that means is that it is now benefiting all artists but the first artists that are benefiting from that are independent artists.”

  He continued: "When you look at how the traditional music industry worked, there were very few independent artists who had access in the recording world to audiences. One of the benefits of digital is that through services like Tunecore, or DIY services, all of these artists have now access to market."

  Willard Ahdritz, founder of rights management and music company Kobalt, also agreed during his keynote conversation with Jem Aswad from Variety that the digital transformation resulted in “huge opportunities for creators to go straight to fans and get the upper hand.” He said the beauty of technology is that it treats artists “all the same, if you are Paul McCartney or a new band, they get the same service via the technology.”

  Ahdritz said Kobalt looks after 40,000 creators and that the company was created to provide tools for artists. “We wanted to be a service provider and aligned with creators,” he said. “Our thinking has always been, how can create tools and benefit from [market] opportunities.” Ahdritz said that was also the thinking behind the creation of and the investment in its service division AWAL, which is taking advantage of the streaming boom to help artists find their audiences. 

The market will bounce back

  Reflecting on the impact of C-19 on the music business, Ahdritz challenged the recent findings from a recent report which predicted that the live sector would be down 75% this year, but the recorded music sector would grow by 3% and music publishing by 3.5%. He believes that without taking into consideration the live music sector, the music business would post growth in 2020. Ahdritz said the music publishing business would be impacted by a drop in synch revenues and by public performances.

  “I do believe that publishing will be actually negative this year,” said Ahdritz, who predicted a “minus 10%” for music publishing in 2020. “Having said that, I think we are going to bounce back and have a 20% growth next year in publishing,” he added. 

  He also noted that because streaming has been resilient and consumption has even been growing, by year-end, recorded music should be doing better than predictions. “I find them conservative – I see a bigger growth than they are seeing,” he quipped. He called the current situation “a great stress test for the music industry” and that “long term growth rate will come back.”

Finding solutions for artists

  What he also sees growing is the market share for independent artists, as the segment is showing impressive growth. “There is a huge opportunity now for the middle tier artists,” he said. “I think the pandemic will fast forward the transformation of the industry. I believe the music industry will be bigger we believed it would be pre-pandemic.” 

  Several MIDEM speakers also reflected on the impact of the coronavirus pandemic on the behaviour of artists, following the brutal stop of all live performances. Roy LaManna, co-founder of video technology firm Vydia, said artists had been very active creating content, putting out videos and doing livestream performances, accelerating the transition to monetisation. “Facebook Live has a new live monetisation feature, something they’ve always had in the mix, but that they’ve accelerated due to Covid,” said LaManna. “We’re trying to meet with and have discussions with all our partners and figure out what solutions they are coming up with and who in our client base fits that. There’s not one solution, but there are various solutions partners are coming up with to help artists through this period.”

Compensating fairly

  “There are opportunities now because of digital music to have all these new revenue streams,” explained Daryl Ballantine, founder of Toronto-based online lyrics platform LyricFind. “It has created a situation where we’re in a unique time of a shared global experience in going through this. That connects all the world in a way we’ve never been connected before. We’re all in this together, fighting a common enemy.”

  For Michael Huppe, President and CEO of US neighbouring rights society SoundExchange, the key to artists in the future will be to be paid for all the streams of revenues in a fair and accurate way. In a conversation with DJ D-Nice, Huppe argued that the digital world “needs to fairly compensate artists.” For Huppe, there is “an immense amount of wealth being made out there off the music, and more of it needs to trickle down to the people that create it, the labels and the artists that provide it to these services.”