Independent artists forecast to earn $2 billion+ this year
As independent artists take back control over music from the big labels they’re on track to make record breaking revenues.
Starting with DIY movements in the 70s and 80s, the necessity of major record labels has slowly been shrinking. With the advent of the internet the ability to get your music heard around the world without publishing deals, marketing, and big money has become ubiquitous and simple – just look at RouteNote, we make it free!
With it so easy to release music by yourself, independent artists are thriving more and more each year. Estimates from US-based merchant bank Raine Group show that independent artists made over $1 billion in 2019 – $960 million of which was generated via distributors like RouteNote alone.
Raine Group reckons that 2020 will be even huger for artists that are taking charge of their music themselves. They predict growth of 27% for music uploaded by digital distributors which will amount to revenues of $1.22 billion for the year.
Taking in to account other methods, such as ‘Mid-tail Artist Services’ deals with companies, they predict that total revenues for independent music will surpass $2 billion overall this year. Taking into account sales from merch and gig tickets it’s looking to get close to $4 billion in total.
The paper from Raine Group reads: “Going forward, the independent artist sector is projected by Raine to grow at a premium to the broader recorded music industry in-line with historical trends (approximately ~4x). Our view is that this growth projection is conservative, given the massive growth potential in the sector and anticipated expansion into developing markets (eg. China, India).”
As an example of just how huge the major labels are though, they are still set to total the recorded music revenues for 2020 to $22 billion. This was predicted by Goldman Sachs in 2018 and Raine seem to confirm that they were fairly spot on if their predictions also come true.
But they say at current growth rates, non-label artists will account for a quarter of the global industry revenues by 2026. The report’s co-author and Raine partner, Fred Davis says: “The independent artist sector did not exist a few years ago, so the rate of growth is strong because the base it is working from is small and is ever-growing.”
He continues: “Most of this growth will come from three factors: more and more artists creating, uploading and streaming their music; the rapid growth in international markets where both distribution and services are maturing; and more success stories (i.e. hits) for independent artists in the sector.”