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Report: Musicians receive a mere 12% of the music industry's revenue

New findings reveal a staggering gap.

The music industry has been hit with another set of statistics, another block of research that indicates musicians receive just a small sliver of the money pie.

In a recent study completed by Citigroup, of the $US43 billion the music industry made in 2017, only $5 billion dripped down to the musicians. That’s 12% to be exact.

In an industry as convoluted as the music business, layer upon layer stand between the musician, their music and the money it generates. The rosiest cheeks from the study come by way of the middlemen, the distribution services like your Spotify’s, Apple’s, as well as radio stations and record labels that benefit grandly from a product they don’t create.

The study also consolidates that artists don’t make the same amount from physical sales as they used to. Before streaming services, CDs were a fans’ avenue to their artist. Per item, CDs were more lucrative for the artist, but now it’s less tangible and less transparent with the advent of streams, a non-physical thing.

So where are musicians going to make their money? Well, they’re heading to the stage. By taking out the middlemen and delivering their music to the people in its raw form, artists can take what’s there’s.

Featuring the likes of U2, Guns & Roses, Depeche Mode and Paul McCartney, the top 10 most profitable tours of 2017 generated, on average, $180 million in revenues.

Live music is hardly a uniform market however and while the top 10 tours averaged $180 million in revenues, tours #91 to #100 generated, on average, only $20 million from ticket sales.

This drop away in revenue is attributed more to the volume of tickets sold per show and the number of shows rather than the average ticket price.

That’s it, the more shows musicians play, the more economically viable it is. It’s not rocket science upon reflection but it’s certainly relentless. We’ve seen how busy touring schedules can place extreme stress on our musicians. The circuit is repetitive, arduous and sometimes lonely which can come at the expense of mental wellbeing.

Charlie Steen, frontman of British post-punk band Shame, has spoken openly about the rigours of touring. James Blake has also come forward while Passion Pit creator Michael Angelakos divulged his distress, revealing the music industry “nearly killed” him.

Taking a step back to consider the findings, there are positives that arise. $US43 billion is a 12-year peak for the music industry, which hasn’t reached such heights since 2006 and while 12% is diminutive in the shadow of lofty earnings elsewhere, it’s a five per cent rise from the year 2000.

With the findings as the backdrop, Citigroup understands there are three ways to grow musicians’ percentage revenue.

At the top, Citigroup suggest the implementation of vertical integration, whereby concert promoters would merge with existing distribution/streaming platforms, such as Spotify and Apple.

Secondly, there’s the option of horizontal integration where distribution platforms merge with each other while Citigroup suggests organic vertical integration could also be an avenue. This will see distribution companies, such as Spotify, enter the record label space and target less established artists.

Read the full report here.