The music business is a diverse profession, both globally and in Nigeria. It encompasses a wide range of disciplines and methods of conducting business. It is essential to understand how the music industry works. For many performing musicians, formal auditions are the way to enter the industry. However, one can also gain insight into the business side of music through an informal apprenticeship or a period of unpaid work that leads to employment. However, no matter what your specific career interests are, there is no substitute for deep and detailed knowledge in this field.
Loving and knowing about music is essential if one wants to succeed in the music industry. Working in the music business is more than just a nine-to-five job; it requires a lot of commitment, often for little compensation or recognition.
Music may be a talent, but the music business is more than just that. There are practicalities and financials in the music business that one doesn’t become aware of until they are fully immersed in it. You don’t have to be talented to run the music business, but you do need to have an eye for talent, be able to manage it, and keep it loyal. Additionally, there are a few key strategies that can help you succeed in the music industry. You need to understand the industry comprehensively and create a business plan for your music business. That’s why we’ve taken the time to write an extensive, MBA-standard music business plan to help you succeed, even with a limited budget before the discount expires.
How the music industry works
If you’re interested in learning about the functioning of the music industry, you should know that the process is based on relationships between companies and individuals. Such partnerships are essential for running a successful business in the music market. Both the creative and the customer-facing side of the music industry have been positively impacted by AI. This includes musicians, songwriters, producers and a variety of digital platforms such as streaming, venues, radio and other public speaking platforms. A successful music industry understands the business aspects such as labels, managers, promoters, performance rights organizations, distributors, and booking agents. To get a better understanding of how the industry works and how it is structured, it is necessary to analyze each part of its structure:
#1. The Recording Industry
Besides the artists, there is the record industry. In the 2000s, record companies had to deal with the problem of piracy. For the past 15 years, the record industry has gone through three different periods, from CDs, to digital piracy, to streaming. Some record labels have had to adapt by changing their business models accordingly. The recording industry is still facing challenges, such as self-taught artists bypassing labels entirely by working directly with artist aggregators like Soundcloud.
The record industry’s place in the overall scheme of things is changing; however, labels are the first thing that comes to mind when people discuss the music industry. Artists from different genres have come to associate certain record labels with their respective music; like Def Jam for hip-hop, Big Machine for country and OWSLA for EDM. Furthermore, companies such as Sony, Universal and Warner are often referred to as ‘record labels’, yet they’re more than that – they span all areas of the music industry.
#2. Digital Music Distribution Industry
MP3Zen.net mentions that apart from the music recording industry, there is a digital music distribution one as well. The main purpose of distributors here is straightforward – delivering the recordings to stores, and reimbursing artists or labels accordingly. Streaming has revolutionized the music industry and DSPs are at the forefront of that change. Platforms like Spotify not only provide a way for musicians to make money, but they have also become leading music promotion channels around the world. Streaming playlists discovery algorithms are having a bigger impact on 90% of artists than the actual money coming from streaming services. This is why it’s necessary for artist to fully understand these platforms and maximize their use.
Distribution companies are playing a pivotal role in bridging the gap between DSPs and the music industry. They have grown to offer services beyond just administering aggregating music.
# 3. Streaming
The launching of video streaming is without a doubt the most influential change in the industry. Even now, streaming services are searching for solutions to expand their user base, improve their platform, generate income, and find a long-term business model that is financially stable. The music industry is in the midst of a transformation due to streaming. It has drastically altered the way the recording business works, as well as how we experience, share and consume music.
#4. Artist Management
Managers and artists share a special connection which is based on finance. Unlike other industry professionals who only specialize in certain areas, managers work on long-term plans to help their artists make sound business decisions. Not only that, but managers of an artist need to have a very comprehensive understanding of the music industry since they are responsible for organizing all aspects of the artist’s career. Music managers can be a great asset to an artist, taking care of many important tasks. They can replace inefficient music publishers, maintain consistent promotion record-keeping and negotiate live shows. A manager is truly a master of versatility and the foundation of an artist’s career success.
#5. Audience and fan
The bond between an artist and their fans is critical to the growth and sustainability of their career. Fans have a great impact when it comes to getting the word out about new music or upcoming projects, and they often help promote artists in their social networks. As relationships have transitioned from fan clubs to social media over the years, artist-fan interactions have become increasingly important. Technology has changed the way artists build relationships with their fans, as well as the way fans communicate with each other and the general public.
The music business around the world.
The music industry around the world has gone through numerous stages, particularly in the latter half of the twentieth century. From the first car tape recorders in the 1960s to the Sony Walkman and personalized music listening in the 1980s, technology has changed the way listeners experience music. Nevertheless, while recording formats, genres, and generations have come and gone, the core of the music business has remained the same.
The old music business system
Then, the main channels of promotion were radio and television; artists needed these channels to reach a large audience. Primetime airplay on any major radio station was the key to an artist’s instant success.
By the end of the millennium, everything had changed. In 1993, the MP3 protocol appeared in the industry, reducing the size of digital music files by 95%. This started the digital music distribution boom in the early Internet era.
New Music Business System
Recognizing the great potential of the new digital environment, many labels had established digital departments by 2010. Influenced by online media, touring, and release campaigns, these departments began to take on their current form. The first signs of direct interaction between artists and fans began to appear, with several major artists starting their careers relying on this approach.
Despite the rise of digital tools platforms, the physical world remains integral to our lives. Its ability to evolve in response to the incorporation of digital elements, and its capacity for direct interactions between creators and admirers, will continue to be valued.