How the digital revolution disrupted the music industry

On September 11, 2001, Jay-Z released his sixth studio album “The Blueprint.” Despite this day being the worst terrorist attack ever on American soil, music fans still went to record stores in droves, with Jay-Z selling over 420,000 copies of the album in the first week, peaking at the number one spot in the Billboard 200. In the face of the music industry’s battles against illegal file-sharing services such as Napster and Limewire, “The Blueprint” shows just how popular physical music sales were in the early 2000s.

Two months after “The Blueprint,” the first version of Apple’s industry-shaking iPod device was released in November 2001. With its sleek interface, large storage, and the ability to add artist’s album art, the device quickly became an industry favorite, and the new face for portable music. That was, until the rise of the iPhone rendered it obsolete.

From streaming to virtual reality, TikTok to Fortnite, music has shape-shifted rapidly in the past two decades, and continues to evolve. Technological advancements in music change the way people listen, create, and access music. What was once a primarily hands-on, in-person industry has become more remote and DIY, rapidly altering the landscape of music in both the present and future. We’re taking a look at how we got here, and what’s to come.

Music streaming

Following its worldwide launch in October 2008, Spotify quickly became one of the premier music streaming services. Offering free, ad-supported tiers as well as monthly plans, Spotify is second only to YouTube in the U.S. with 27% of all adults using the platform. Global estimates put Spotify ahead of the competition, which includes Apple Music, Amazon, and Pandora, among others.

Music streaming services offer users an online database of songs, albums, podcasts, playlists, and videos available to download, share, and listen to virtually anywhere. At a lower monthly cost than one CD, these platforms give music fans an all-you-can-eat buffet of music way more convenient than going to a record store.

Although the accessibility of music is embraced by millions of people around the world, not everyone finds streaming services, also known as DSPs (Digital Service Providers), as fulfilling—particularly those in the music industry.

“I enjoyed the autonomy of controlling my files,” says Ty “Gotty” King, a trusted music voice and founder of The Smoking Section, a now-defunct hip-hop blog previously funded by Uproxx. “There’s something less fulfilling about leasing music from DSPs. In many ways, developing a deep connection to the music can be difficult because at least with MP3s [a compression system for music files], there was a level of ownership.”

Music creators are also unsatisfied with some of the challenges that have come with the rise of streaming.

While artists benefit from the instant popularity people sharing their music provides, they often struggle with the financial side of the business. Simply put, streaming doesn’t pay as well. Spotify, for example, pays $3.18 per one thousand streams, or $0.00318, to the artist or copyright holders of the recording. That number pales in comparison to the $1.50 most artists used to earn from the sale of a $15 CD.

Livestream

Prior to 2010 there had been some advancements made in the presentation of concerts from the standpoint of production value and accessibility, however, none of these movements really caught on. That was, until the coronavirus pandemic caused a major disruption to the music industry.

According to the World Economic Forum, live performances make up over 50% of total revenues in the global music industry, with the other half being recorded music (streaming). With the majority of concerts cancelled in 2020 due to the pandemic, it’s estimated that the music industry lost $30 billion that year, so it needed to adapt in order to survive. This is what sparked the resurgence of livestream concerts.

Livestream concerts weren’t new, they had wavered in popularity from the late 2000s and boomed during the pandemic as artists found creative ways to interact with fans.

One of the best examples of this creativity is Verzuz, the live-streamed battle series launched by Swizz Beatz and Timbaland in March 2020 to entertain their audiences while quarantining. What began as an Instagram Live broadcast, Verzuz quickly expanded to other broadcasting formats, including Apple TV, Triller and Fite TV, giving fans a way to experience their favorite artists as live as they possibly could.

Each Verzuz episode draws millions of viewers, having a considerable impact on streaming. Rolling Stone reports that on average, artists appearing on Verzuz saw an 88% bump in plays in the three days following the event.

VR concerts

Unlike live streaming, which is an event recorded and broadcasted in real time, virtual reality (VR) concerts turn a live experience into a virtual event which viewers can witness in multiple dimensions from multiple angles. Sometimes requiring a headset, VR concerts transport you to a music venue, often to experience digital avatar versions of musical artists performing.

MelodyVR, a virtual reality music streaming platform that launched in 2018, works with many musicians (Wiz Khalifa and Lewis Capaldi, to name a few) to create virtual reality concerts. The app pairs with iOS and Android phones, as well as VR headsets such as Oculus so users can experience live performances from various vantage points, including backstage and even onstage (if users have a VR headset).

One of the biggest leaders in virtual concerts is the successful open-world game, Fortnite. In April 2020, Fortnite partnered with Travis Scott for an in-game virtual concert experience of “Astronomical” that set an all-time record for concurrent live participation with over 12.3 million tuning in. The 15-minute performance grossed $20 million for the rapper, 20 times more than just one of the live concerts in his 2018-2019 tour.

“It’s [music industry] going to get more into VR,” says Aram “Mickey” Tserounian, owner of independent label Treacherous Records and Mint Room Studios in Los Angeles. “When it gets into more [VR], you feel like you’re there. That’s when people are going to want to stay at home.”

AI-generated music

It can cost anywhere between $500,000 to $2 million USD to promote a new artist on a major record label. From production to marketing, taking a chance on a musician is expensive for record labels fronting the costs. That’s why music labels are starting to pay more attention to AI-driven music creation.

AI technology analyzes data from popular compositions to create computer-generated music arrangements, including specific genres and songs with lyrics. For a small fraction of the cost, record labels can generate almost-guaranteed hits, without having the overhead of a human artist.

Although AI has been around for a while, many new AI companies have sprouted since the pandemic started. In March 2020, Sony Computer Science Laboratories launched Flow Machines, an AI-assisted music program that can propose melodies, chords, bass and more. Another remarkable AI music company is OpenAI, a research laboratory that released a program called Jukebox in 2020. Jukebox is trained on millions of songs and is capable of producing AI-generated music in the style of almost any artist, including this example on its Soundcloud page of pop in the style of Katy Perry.

While the music industry may be a long way from witnessing Selena Gomez musically collaborate with a robot, it’s clear that the infiltration of machine learning and AI is already having an impact on how record labels do business.

Social media

The rapid growth of social media has been monumental for the music industry. Founded in 2003, Myspace was music’s first tangible foray into social media, and is famously where many artists began their careers, including Drake, who after receiving a private message from Jas Prince, CEO of Young Empire Music Group, was catapulted into the industry.

Since the days of Myspace, social media has evolved considerably, with platforms like Twitter and Instagram providing real-time engagement opportunities for artists to connect directly to their fans.

Currently, TikTok is one of the most important social networks for the music industry. The platform allows users to share short video clips, which are typically paired with music. A November 2020 study from TikTok reveals that 67% of TikTok users are more likely to go and seek out songs on streaming services after hearing them on the platform.

Meanwhile, Linktree is leading the way in accessibility on social media, with artists like AMEA finding the ease of sharing vital to their careers. “Linktree allows us to conveniently invite people into our digital world, to connect to our website, social media pages [and] streaming profiles,” she says.

Music Links are Linktree’s newest feature that offer one convenient place for fans to see where an artist’s music is streaming so they can listen on their preferred service. Artists and fans alike can link to songs, playlists, and entire albums, often generating an audio preview right on their Linktree. As a bonus, any interaction with a Spotify-embedded Music Link counts as one stream for the artist.

According to September 2021 Linktree data, there have been over 60,000 Music Links created in the last 30 days. The most popular streaming platforms is Music Links Spotify (10% of Music Links are to a Spotify Playlist), followed by YouTube, Apple Music & Soundcloud.

With 17 million users worldwide, including Vance Joy and The Jacks, Linktree is home to a variety of artists utilizing Music Links. After her latest single “Everywhere” was released in August and added to her Linktree, Sukihana became Linktree’s top-streamed user. Other notable Music Links users with impressive streams include Daveed Diggs, Harry Hudson, and Ashnikko.

With artists using a number of social media tools in 2021 and beyond, their needs for simplicity and ease are constantly growing. That’s why having one place, such as Linktree, to build their fan base, promote their music and look for new ways to market themselves as artists will continue to be a solution they turn to.

The future of music technology

Since the early 2000s, the music industry has been pushed into embracing technology and innovation, and this has come with both challenges and rewards. In some cases, such as music streaming, fans have revelled in the instant accessibility to music, while it has been a learning curve for artists to accept the industry’s new revenue model. When it comes to social media, fans are now closer than ever to their favorite artists, while emerging artists have a platform for visibility that wasn’t available 20 years ago.

As the world continues to explore technology-focused solutions, the disruption continues. So what does the future look like? It’s hard to predict, but right now we’re seeing mass music creation and voice technology at the forefront. Technologies like Amper, an AI tool, are making it simple for anyone to create music, leading to the formation of an active rather than passive music audience.

The way we listen to music is also evolving as innovative products enter the marketplace. Smart speakers and voice technology, like Amazon’s Alexa, can actually influence our music choices now. “What do you play when a person says ‘play a sad song?’ My son’s 9, He talks to Alexa non-stop all day”, Music Director Bob Moz told Soundstars. “He has no concept of albums. He has no concept of media brands…His relationships are with Alexa and with the artist or the song name. He is […] discovering things in the voice environment.”

There is still a lot of unknown about the future of the music business, but one thing is certain; much like the transition from physical music sales to the digitization of music, there is more disruption on the way and technology is leading the change.

 

About the author: Adam Aziz is a music consultant and writer living in Toronto, Canada. He has worked with the likes of Dave Chappelle, T.I., Xzibit, to name a few, and has written for ESPN, Complex, VIBE, and others.