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This is a guest post by Ben Patterson, President, Artist & Label Services of Downtown Music Holdings. Here, he explains his perspective on the current state of the music industry for independent artists, how their creative and business roles have changed, and how the industry could alter for their benefit.

Ben Patterson, Downtown Music Holdings

Artists are the backbone of the music industry. And that industry — in terms of total artists, total songs released and total listening consumption — has never been bigger or more fractionalized than it is today.  Independent artists face countless hurdles to succeed and get their voices heard — literally through their music and figuratively behind the scenes.

It’s not an easy feat. Not only do today’s independent artists have to write and record music, but they also have to navigate the complexities of the latest technology and understand how to connect with fans across a cacophony of social media and short-form video offerings competing for everyone’s time and attention.

Advancing technology means independent artists have more opportunities to create, connect and release music. Still, they also face the intricacies of the heavily fragmented music streaming landscape, including ongoing market volatility that recently resulted in Spotify raising its prices and prominent label executives attempting to devalue their work via proposed two-tier royalty systems. Despite this, artists have more leverage than ever, and majors are increasingly adopting the licensing and distribution models that allow artists to retain ownership of their copyrights. But they can only reach their full potential in an equitable music ecosystem and with partners designing services and technology to serve those needs. Let’s explore what that looks like.

The Evolving Role of the Independent Artist

The artist of today and the artist of 30 years ago do not resemble each other, no matter how much 90s fashion is seeping back into culture. Right before the internet boom, artists still relied heavily on large labels for any kind of success, those of which carefully gate kept access to music for fans. Then came the digital revolution and, later, the music streaming economy, which changed everything.

Due to the Internet, streaming services and social media, there are more avenues through which artists can release their music and connect with fans on a global scale. A song recorded last night can reach millions by the morning. Consumers have more accessibility to their favorite artists and to play their songs on repeat, which has led to a 13.8% increase in U.S. music consumption in the first 20 weeks of 2023 alone. And listeners show no signs of slowing down — the global music industry just surpassed 1 trillion streams at the fastest pace ever in a calendar year.

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The current landscape benefits the ongoing independent music sector boom, with indie labels accounting for 21% of the music market share. But with consumption at an all-time high and more platforms to choose from, the music landscape is becoming oversaturated and increasingly fragmented. When emerging artists compete with industry powerhouses like Taylor Swift and Beyoncé on the same platforms, they also compete with podcasts and white noise playlists, video games, video streamers and short-form video. Only twenty-four hours are available for consumer listening, no matter how many songs are released that day. The vast amount of musical content has created a massive middle class of artists able to release music and connect with fans. The music industry should provide the tools to ensure artists can reap the benefits of this access and continue to build their audiences and careers.

The technology that empowers so many independent artists must be used responsibly. Elsewhere in the entertainment industry, WGA and SAG-AFTRA are on strike, citing AI as a key factor in their negotiations — the music industry is also feeling the effects of this uncertainty. This is a major concern for independent artists who may face unfair and uncertain competition without proper regulations governing AI’s role in the industry. While AI promises to unlock and enhance the creative potential of thousands of future superstars, without clear guidelines on copyright ownership and streaming measurement, those artists may be overshadowed by bad actors seeking to exploit streaming platforms.

AI-generated songs by anonymous creators are now highly visible in the music industry, with a viral track featuring the AI-generated voices of Drake and The Weeknd as an example of just the beginning of what this rapidly-evolving technology is creating. While AI can also enhance creativity, simplify marketing and advertising and combat streaming fraud, bad actors are using the same technology to advance fraudulent activity, which is estimated to cost around $2 billion in misallocated streaming revenue each year. The reality is that every fraudulent stream of a bot listening to a track created by a bot takes revenue away from a legitimate stream. Incidents of music streaming fraud are increasing daily. These are hits that human independent artists don’t deserve to take.

Where We Go from Here

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The music industry that lifted the likes of Mariah Carey and Whitney Houston to superstardom 30 years ago is no longer comparable to the music ecosystem that exists for artists today. In the oversaturated streaming environment, it’s increasingly difficult for artists to achieve mainstream impact today, and the entire music community is threatened by losing out due to growing streaming fraud. Creators in the streaming era are facing unprecedented challenges — requiring us to find new solutions.

We can champion today’s artists by understanding their unique challenges and embracing a proactive approach to combat pervasive issues such as streaming fraud while embracing the creative and marketing enhancements offered by technology. By working together across the industry, we can protect artists from fraudsters and invest in technology that prevents bad actors from passing through the DSP’s ecosystems. And we can all align behind artists maintaining ownership and equity in the music they create.

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