Selling Audiences to Advertisers: Is This the Future of Music?

April 25, 2014 Alan Cross 0 Comments

The era of being able to make a living selling music to fans is drawing to a close. And while there will always be people to make music and fans who will want to listen, we’re going to be groping for new revenue models for some time yet.

Artists need to be paid for their labours and their talents. But how? Recode takes a look at one possible revenue stream of the future: selling audiences to advertisers. Yes, bundling up us music fans and selling us (and the Big Data we provide) en masse to…someone.

Uncertainty rocking both the broadcast radio and record industries has opened an enormous opportunity for recording artists and record labels. Growth for the music industry will come from expanding the overall online radio audience and ad pie at the expense of broadcast radio.When important trends are viewed through the lens of the music/radio consumer, the future of recorded music monetization is revealed. The majority of revenue flowing to artists and labels will soon come from advertising, not the sales of MP3s, CDs or subscriptions.

CD sales have been in decline for years; now, suddenly, MP3 sales are collapsing:

According to Asymco analyst Horace Dediu, 2014 iTunes download music sales “might drop by an additional 40 percent.” Happening concurrently with the MP3 sales crash is broadcast radio’s downward spiral in Time Spent Listening. Simultaneously, Pandora, Spotify, and other non-broadcast, IP-delivered radio/music services are enjoying
astonishing growth. By next year, 170 million people will listen to Internet radio, up 10 million listeners from this year.

Keep reading. It’s good.