COVID-19 and the Global Music Industry

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Music has become a constant daily companion of most people. In fact, a 2019 global study conducted by the International Federation of Phonographic Industry (IFPI) showed that an average person spends around 18 hours per week listening to music. This is equivalent to nearly 52 three-minute songs per day.

Another music consumption study done by Nielsen revealed that in the U.S., Americans spend more than 4.5 hours a day listening to music. This is equivalent to over 32 hours a week, which is double the global average. Such an increase in music consumption was driven by the rise in music streaming platforms coupled with the role of smartphones in daily life, according to experts.

The rise in the number of music consumers catapulted the music industry to its peak. However, like the other industries, the music scene, along with its advocates, was badly hit by the COVID-19 pandemic.

Widespread lockdowns and strict social distancing measures forced musicians and industry players to cancel live events and physical promotions, which caused a financial whirlwind to the industry as a whole. In fact, the latest report from the World Economic Forum (WEF) estimates that a six-month lockdown alone could potentially cost the music industry over $10 billion worth of sponsorships. Longer delays on music projects could be more devastating, according to the WEF.

Moreover, the WEF outlined the three main effects of the current health crisis on the global music industry:

1. Decline in sales and streaming activity

In the U.S., physical album sales dropped by a third this 2020 due to the closure of retail stores, according to Alpha Data. Digital sales also fell by around 11% as most people try to reduce miscellaneous spending at the start of the pandemic. On top of this, reduced streaming was also observed in some music markets, dropping between 7-9%.

However, signs of improvement in music consumption are starting to show, where music users are willing to pay for online streaming and song subscriptions.

2. Drop in advertising spend

A recent survey done by the Interactive Advertising Bureau showed that nearly 25% of media buyers and music brands have put their advertising efforts on hold during the first of this year. On top of this, around 46% of them have reduced advertising budgets for the rest of 2020 as they struggle to mitigate costs.

3. Delayed song releases and canceled concerts

The majority of artists have canceled major concerts and postponed song releases to later this year or in 2021. Live performance revenues are reaching near zero, while rebuilding consumer confidence in attending in-person concerts may be difficult.

How Is the Global Music Industry Coping with These Changes?

While the future remains uncertain especially for the music scene, musicians around the world are looking for new and creative ways to mitigate the effects of the pandemic. Here are some of them:

1. Hosting online concerts and virtual fan meetings

Several artists are now shifting to digital platforms by holding virtual concerts and events to promote their projects and interact with fans globally. Some artists are also collaborating virtually to hold online charity concerts that aim to raise money in combating COVID-19.

2. Digital classrooms for music lessons

Music teachers are trying innovative ways to educate their students in the midst of a pandemic, from digital classrooms to private sessions with social distancing. Most teachers are conducting music classes via the Internet, while some are transforming their homes into COVID-safe studios to teach private voice lessons. Some music schools have also started their physical classes, with students wearing masks and seated at least six feet apart.

3. Social media promotions

Musicians, particularly new independent artists, are leveraging social media to promote their song releases and boost their online following. Posting of videos, photos, and audio recordings have become their top strategy in marketing their projects as well as in interacting with supporters.

4. Use of third-party streaming platforms for generating cashflow

With revenues for physical album sales and live performances dropping, music artists and producers are now banking on third-party music streaming services to monetize their digital songs and release new projects. Higher preference will be given to artist-friendly platforms that offer payout rates on a per-stream basis.

The bottom line is that the COVID-19 pandemic will continue to reshape the music industry even after the situation improves. Musicians will remain heavily reliant on technology for marketing and interaction, while consumers will continue to take precautions on attending live concerts and purchasing digital assets.

While the future of the music scene remains bleak, nevertheless, music will remain a huge part of human lives, one way or another.

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