The IFPI (International Federation of the Phonographic Industry) represents the recording industry worldwide and is a not for profit members organisation registered in Switzerland. It operates a Secretariat currently based in London and has regional offices in Brussels, Hong Kong and Miami In. January 2012, they released their annual report on the music industry. You can read the report here.
Here is what I feel are the most important pieces of information from the report for struggling artists.
- VEVO is a platform used by the recording industry to distribute music videos to fans; it’s also what generates revenues through advertising and brand sponsorships. In 2011, VEVO delivered more than US$100 million in royalties to rights holders of the music/videos (Maybe not the creators themselves, but the labels that represent them) .It’s primary goal is to ensure the music audience is valued by advertisers.
- Digital music is now broadly segmented into two main consumption models – “ownership” and “access”. Ownership would be iTunes or digital downloads and subscription would be access to unlimited music for a premium price, much like cable TV. Internet Service providers and cell phone companies are attempting to make subscription to unlimited music apart of the smart phone service experience.
- Digital was once mistakenly feared to be the killer of the album. Now digital album volume sales have grown steadily in recent years, with US and UK digital album sales in 2011 up by 19 and 27 per cent respectively. This would be for Top 40 artists backed by the recording industry’s marketing dollars and does not reflect independent artists.
- Consumer demand for an artist’s body of work remains strong in the digital world especially as price competition is often fierce and storage on computers and devices is less of an issue.
- Several factors explain the strength of demand for digital albums: strong marketing campaigns, premium offerings that provide additional content and consumer habits.
Artist Title Sales (millions)
Bruno Mars Just The Way You Are (12.5)
Bruno Mars Grenade (10.2)
LMFAO Party Rock Anthem (9.7)
Jennifer Lopez On The Floor (8.4)
Adele Rolling in the Deep (8.2)
Lady Gaga Born This Way (8.2)
Pitbull ft. Ne-Yo, Afrojack & Nayer Give Me Everything (8.2)
Black Eyed Peas The Time (Dirty Bit) (7.3)
Maroon 5 Moves Like Jagger (7.0)
Bruno Mars The Lazy Song (6.5)
My take on the indstry after reading the report:
I feel that the music industry is still controlled by the major labels that founded the business around music. For the struggling artist, the idea of pushing a million records is still far from reality. Platforms like VEVO and subscription/ownership services are still heavily influenced by the recording industry’s position as the main supplier of music and not the artists themselves.
Unless you are represented by a label, you cannot be on VEVO, as for iTunes and other services and without the big push of label marketing dollars and excellent branding strategies, you are stuck becoming apart of the noise of independent artists everywhere looking to compete against the large conglomerates for a “piece of the cake” so to speak from the consumers.
With the labels still in control of the mainstream channels of exposure for artists they represent, the barriers for the struggling artist to connect their music with an audience is exceedingly difficult.
Tough roads ahead! But I’m optimistic that people will begin to search for artists that deviate away from major labels as everything is sounding the same. The only competitive advantage one has against the label, is their creative ability to be different, this will be the edge for the struggling artist to connect with an audience. Different is what people will want, eventually.
- Daniel Ram






