Digital has changed each step of the music business. Revenues declined due to the lack of physical sales, and labels have become increasingly risk averse. The music industry has morphed from a cultural business into a fashion business, where superstar artists are ‘in’ one minute and ‘out’ the next. To make sure they are always making money the big 3 major labels invest only in what they believe is commercial, or similar enough to what has been in the recent past, to be a hit.
‘RECORD LABELS ARE PUTTING OUT INSTANT MUSIC LIKE CHEWING GUM’- Tony Visconti
In his report Listomania, Price (2015) describes how the streaming economy has further pushed this polarisation of the industry to new levels, citing the growth of streaming as a key revenue source for the recorded music industry as coinciding with this ever increasing gap. The amount of gravitas the playlists on the top streaming services, Spotify being the case in point, works as a self-perpetuating spiral for the top 1% of artists. This is almost exactly the same as the global economy outside of the music business as well.
“Spotify commands approximately 97% of playlist impact by feature and follower count…Of the most featured artists on Spotify-curated playlists, Universal claims the lion’s share of repertoire with 12 acts in the Top 20, followed by Sony on 4 and Warner on 3. XL (Adele) is the only indie label in the Top 20”- Price, 2015
The major labels hands in terms of dictating the content that is featured as part of the Spotify curated playlists is quite evident. One can deduce that in order to use their catalogue Spotify have had to agree to feature a number of tracks from their labels within their curated playlists as part of the deal. Of course these deals are covered by NDA’s- non disclosure agreements- and labels are often given equity stakes in the streaming services as part of these deals so it’s clear where the power lies. This is detailed further in this article in Forbes written by O’Malley Greenburg (2015) here: Revenge Of The Record Labels: How The Majors Renewed Their Grip On Music