24 Jun 2021

The State of The Music Industry 2021

The State of The Music Industry

The last 15 months have been an unpredictable roller coaster that has taught us a lot about the music business. Amid the global pandemic, closed venues, and postponed concert release schedules, predicting the future is a tricky proposition.

It has been a lonely road since the first closings of March 2020. But as we turn the corner of this new 2021, we must admit that 2020 leaves us with a good result of successes and another excellent year for streaming platforms. And, as a result, a surprisingly good year for record companies and digital distributors, given the extreme conditions in which they have had to operate.

And while 2021 is likely to be just as unpredictable, we have done a bit of research and have some ideas on what the music business might look like.

The rise of live streaming

The closure of the concert halls led to a huge jump in live streaming: production sessions, DJ sessions, and home concerts have all contributed to this. During the pandemic, people needed more human connections, even if it was through the computer screen.

In this way, the Twitch platform became very popular at that time and began to grow. Even so, Instagram and Facebook also became strong on that issue and provided resources so that artists could make live broadcasts, even Tidal began to offer a virtual concert system.

The main benefit of live streaming compared to concert tours

- Less likely to be canceled on short notice.

- Reduction in the cost of traveling to hotels, room rental, etc... anything else in the long list of logistics that is normally needed.

- Broadcasting everywhere and attracting fans from different places.

- Mostly it is free or paid depending on the platform.

Tik Tok remains the center of new music discovery:

Another great lesson of 2020 is that TikTok was proclaimed supreme in the most used application during the pandemic where a world of music discovery was discovered.

Crowds of artists can benefit from their music going viral on the popular video-sharing platform. Twitter, Facebook, Snapchat, and Instagram to this day have failed to create an equally beneficial tool for artists, which leads us to believe that the influence of TikTok - will it continue to grow?

As we said, although the other main streaming platforms have not achieved the same success as TikTok, they have also introduced their versions of short videos, such as Triller or Reels.

There are no new “novelties” on the horizon yet, but something new may soon emerge under the radar that may cause the platform to start going down.

Brand growth through streaming or physical format?

Streaming in and of itself is a risky way to build a career, but it is a great way to build reach. Spotify playlists are still a great way to get discovered. If you can get into multiple playlists, you can start reaching more listeners.

Even so, we have already commented on it several times in our posts, and the key is that people continue to buy music in physical format. Albums are still being sold: CDs, vinyl, even digital, are still selling and that's because listeners want to feel like they own a piece of the musician's brand. It's more intimate and they feel like they're contributing to the musician's career.

In this way, you must know how people consume music and, above all, you can discover what your fans want from you. Build that relationship with where they want to buy your albums, merchandise, and any other experiences you offer. A lot of revenue can be generated from streaming, but the greatest value lies in the ability to build brand awareness.

Even so, it should be noted that streaming platforms such as Spotify, Amazon, or Instagram are adding direct-purchase functions. A function that we will have to follow closely to see how it progresses.

More collaborations between artists and brands on the rise:

With tours on hold, artists and their teams have gotten creative with revenue streams. 2020 saw a record number of musicians partnering with brands of all sizes to attract content opportunities, and we believe that trend will continue into the new year.

When it comes to collaborations, hip-hop has long understood the power of artist collaborations. But in 2021, other genres have followed suit. These collaborations can bring music communities together to benefit artists and fans alike. Many have more opportunities to experiment with different sounds and ideas. Seeing more collaborations emerge from this point on seems inevitable, leading to some exciting new music for audiences.

There are many other possible predictions for the remainder of 2021, but these are the ones that are already being seen today. We'll see how many of them remain strong at the end of the year.