Where platforms are changing the music industry

The music industry has undergone significant transformations in recent years, driven by technological advancements and evolving market dynamics. In a recent episode of "The Balance Sheet," we had the pleasure of hosting Mira Howard , Head of the Song Fund at Snafu Records. Mira provided invaluable insights into the economics of the music industry, the impact of artificial intelligence (AI), and the persistent gender imbalance within the sector.

The Economics of the Music Industry

The economic landscape of the music industry has shifted dramatically with the advent of digital technologies. Traditional revenue streams, such as physical album sales, have been largely supplanted by streaming services like Spotify and Apple Music. Artists now primarily earn income through streams, live performances, licensing, and publishing royalties. However, there are regional variations so CDs is still a big market in Japan.

Mira explained that record labels have evolved from simply producing and distributing physical records to becoming multifaceted entities that provide financial backing, marketing, and promotional services. Snafu Records, for instance, started with an approach of offering advances to artists, and allowing them to retain ownership of their music. Snafu now looks at back catalogs with potential for further monetisation. This model reflects a broader trend in the industry, where music is increasingly viewed as an asset with significant potential for revenue generation.

The Impact of AI in the Music Industry

Artificial intelligence has become a game-changer in the music industry, particularly in the areas of artist discovery and catalog valuation. One could use AI to identify emerging talent. This approach allows them to uncover artists who might otherwise remain unnoticed due to the sheer volume of music released daily.

AI helps Snafu analyze trends and engagement metrics on platforms like Spotify and TikTok, enabling them to make data-driven decisions about which artists to sign and which catalogs to invest in. For example, they use AI to track user engagement, such as spikes in plays and positive comments, to identify an artist’s or a catalog’s potential for success. But, you need human judgement to see if an artiste has what it takes to make a career out of music and not simply be a viral hit.

AI’s influence extends beyond discovery and valuation. It also plays a role in content creation. Despite concerns about AI replacing human creativity, Mira believes that AI will augment rather than replace human musicians, offering new tools for creative expression.

Addressing Gender Imbalance in the Music Industry

Gender imbalance remains a significant issue in the music industry, affecting both artists and executives. Mira is passionate about addressing this disparity and manages Snafu's Women's Creative Fund, which allocates resources specifically to support female creators. This initiative aims to increase the representation of women in the industry by providing financial support and mentorship opportunities.

Mira pointed out that one of the reasons for the gender gap is the technical nature of roles like music production and engineering, which have traditionally been male-dominated fields. Additionally, the network-driven nature of the industry can perpetuate existing biases, making it harder for women to break in and advance.

Snafu’s Women’s Creative Fund is working to change this by actively recruiting female artists and building a supportive community where they can collaborate and thrive. By fostering a more inclusive environment, Snafu hopes to pave the way for a new generation of female talent in the music industry.

Conclusion

The music industry is in a state of continuous evolution, influenced by economic shifts, technological advancements, and social change.

For more in-depth discussions and expert insights into the business world's most pressing issues, subscribe to our newsletter, The Balance Sheet. Don’t miss our next episode on Agribusiness in Africa, airing on June 14th from 12:45 to 13:30 UK time. Join us as we explore the dynamic and vital agricultural sector on the continent.

You can also watch the full episode with Mira on YouTube.

Post-its

I will leave an occasional thought about the workplace as bonus content.

Social media is a mix of the cringe (looking at you LinkedIn), the creepy (lots of stuff on Facebook) and the toxic (IG and Twitter). We can’t run away from it but we can make better decisions about what we post about the workplace.

I’ve noticed a string of posts with photos flexing that people are on business travel. One photo had a glass of champagne on top of a boarding pass that clearly showed business class, with the tweet on looking forward to a flight to meet clients.

Call me old-fashioned but I think this is not a good look for one’s career. No client likes to pay for consultants to enjoy themselves. And people back in your office don’t want to see you living it up. Some of them might never get a chance to travel but have to process your travel expense claims. And your competitors now know which countries you are targeting for sales.

Enjoy the business travel if you like it but keep it to yourself. You can post about business travel but confine it to learning points and not this sort of flexing.