MIDiA Consulting released their new report: The Death of the Long Tail: The Superstar Music Economy free of charge here.
It’s no secret the 21st century decline in recorded music revenues continues to send shockwaves throughout the music industry and although there are encouraging signs of digital-driven growth, the impact on artists is less straightforward. Total global artist income from recorded music in 2013 was $2.8 billion, down from $3.8 billion in 2000 but up slightly on 2012. Meanwhile artists’ share of total income grew from 14% in 2000 to 17% in 2013. But the story is far from uniform across the artist community.
The music industry is a Superstar economy, that is to say a very small share of the total artists and works account for a disproportionately large share of all revenues. This is not a Pareto’s Law type 80/20 distribution but something much more dramatic: the top 1% account for 77% of all artist recorded music income (see figure).
In fact digital music services have actually intensified the Superstar concentration, not lessened it. The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.