Musicians in America receive just 12% of industry revenues, report reveals

The report finds that artists' profits from their music is now on an "upswing".

Music artists in America received just 12% of the profit their music generated in 2017, a new report has found. 

The report, by Citigroup, shows that figure is a significant improvement on the 7% they received in 2000. The US music industry turned over $43 billion last year, meaning just over $5 billion went to artists. 

The reports says that “consumer outlays", such as concerts and streaming subscriptions are at "all-time highs”, now at their peak after a decline from 2006-10. Money spent on concert tickets was one of the fastest growing areas, while royalty payments were also said to be improving quickly. 

So why is the musicians' share of the figure so low? "In most forms of entertainment, the artist captures the lion’s share of the spoils,” the report says. “But because the music industry has so many intermediaries – and because the consumption of music is so fragmented across various platforms – the artist captures very little of the aggregate revenues."

In other words, a significant portion of artists' revenue is absorbed by management companies, publishers, record labels, streaming platforms and radio services, such Pandora and SiriusXM (which aren't available in the UK).

Still, the artists' share is on an "upswing", thanks to the popularity in gigs and the continued rise of subscription services against the decline of physical sales. 

Citigroup's report predicts songwriters and performers will eventually capture a larger share of revenues. “This will be driven by continued shifts in revenue toward concerts (where labels play a very small role), and it will be driven by new entrants into the record label role (most likely web-based distributors).” The report also suggests services such as Spotify could move into the concert business.

Have a look at the UK's Official Top 40 biggest singles and albums of 2018 so far. 

Article image: Rex