The New Challenge Facing the Music Industry: Developing Unknown Talent

Today, we launched a new project - an unknown act with no prior releases, profile, or social media presence. It's still possible to find and build new talent in the music industry, but there's a serious challenge with the current approach.

Over the past few weeks, I've been discussing with industry partners, distributors, labels, and agents in the US about how difficult it's becoming to develop artists. Looking at it from a broader perspective, the industry has always had gatekeepers, and it always will. However, the challenge now is how to convince these people to open the gates.

We used to have various methods to persuade them, such as radio, press, social media presence, and live shows, among others. However, things are changing gradually. One of the simplest ways to open the gate today is data on the song. However, it's not just any data - it's about the volume of streams generated on the track coming from outside the platform. It’s not about having a good save rate or skip rate. But how can newcomers generate such a significant amount of streams?

There are a few answers to that question:

Firstly, there's the current industry-favorite platform, TikTok. People are obsessed with TikTok because of its powerful algorithm that can drive hundreds of thousands of streams for a song without much effort. However, it's not just music-based - it's mainly content-based. This means that if you're an artist who doesn't play by TikTok's rules and create entertaining or engaging content, it will be challenging for your music to spread. I believe we're missing out on a lot of potential hits and great songs because of this. There are plenty of introverted artists out there for example who write amazing songs but aren't comfortable creating potential viral content on TikTok. Does that make them "non-artists"? We might miss out on discovering the next Prince or Kurt Cobain.

Secondly, there's the fanbase. However, you need to cultivate it over time, which requires money, time, content, and support. Suppose you successfully build a fanbase of 10,000 people, including 2,000 superfans, after a year. In that case, that's a great ratio and something to be excited about. However, with the volume of content shared online, the number of records released every week, and various algorithms, your 2,000 superfans might not hear about your track in the next two weeks, resulting in only a few thousand streams from your fanbase. This is not something digital service providers (DSPs) are interested in.

Thirdly, there's marketing. However, most of us know that the amount of cash needed to make an impact is outrageous. Big companies can afford it, but what about indie labels and artists?

There aren't many options available for artists to grow. At Unity Group | Music Company , we're extremely artist-friendly and used to make short deals to give artists more freedom. Unfortunately, the way things are going, if you want to build an artist's fanbase or invest in an artist, you can't only release one-off singles (unless you have unlimited funding). Under the guise of giving more power to artists, the industry is doing the opposite. It's almost like putting gladiators in the arena - the strongest one wins. We read many reports, attend conferences, and read articles about mental health for artists, and most of them are affected by what the industry is currently doing. They didn't ask to be in that arena - most of them wanted to master their craft and spread their music.

You can already see the shift. There are fewer music people and more tech/finance people. There are fewer A&R people and more ‘talent scouts’, there are fewer promo teams and more data analysts, fewer Music CEOs and more CEOs coming from the tech or bank industry. Every week you can see a company or venture capitalist investing in music companies and catalog.

While I think this shift has been positive for the industry overall and has helped increase recorded music revenue in recent years, I don't believe that we should be treating artists like A/B tests to see which ones have the most potential.

I recently read on Music Business Worldwide (MBW) that major record labels release around 3900 tracks every day, while distributors release even more. As a business owner, I can appreciate the strategy behind this approach. By buying catalogs, signing tons of artists, and releasing a massive volume of music, they can get the biggest A/B test possible and see which tracks and profiles are the most reactive. But to me, this approach doesn't prioritize the individual artists and their unique creative visions.

I believe that we should be focusing on developing and supporting artists based on their talents and strengths, rather than simply seeing them as data points in a mass A/B test. By building genuine relationships with artists, working with a micro-approach and investing in their growth over the long-term, we can help them reach their full potential and create music that truly resonates with listeners.

There is an adjustment to be made in our industry. We can't fight against progress and it's needed, but behind a lot of music, there are people and artists that can't be treated as disposable products. We can already see the impact of these changes with ‘hits’ getting less impact than before and with songs getting shorter to please the algorithm and highlight the hook/chorus. There will be more changes to come.

In conclusion, the music industry is facing a serious problem in developing new artists. The traditional gatekeepers are still present, but their criteria for opening the gate have changed. Data is the simplest way to convince them, but the current methods of data collection and analysis have created a difficult environment for many artists or those who do not fit into the mold of current industry favorites. The industry (at least music people) needs to shift its focus back to the artists and find new ways to support them. 

Overall, the music industry is in a state of flux, with traditional models giving way to new technologies and approaches. While this can be daunting, it also presents opportunities for innovation and growth. Those who are willing to adapt to these changes and stay ahead of the curve will be well-positioned for success in the years to come.

#musicindustry #musicbusiness