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Thursday, December 29, 2011
12 Music Business Predictions For 2012
1. Google+ continues to grow. Depending upon who's research you read, Google+ is already at either 150 million users or 65 million users. Regardless of the number, it's huge considering that it only launched 6 months ago. How many of those users are actually active is debatable, although Google doesn't care much as long as you're signed up and it has your info (that's the underlying truth of the matter). Regardless, Google will continue to add features to Plus next year and continue to gain users at a record number.
2. Vinyl continues to grow as well. You can say that vinyl is a fad except for the fact that every music store owner who sells it says their sales are way up over last year. Add to that the fact that they can't keep record players and turntables in stock tells you that although the vinyl business may never be huge, sales will continue to increase in 2012.
3. Facebook feels Plus's heat. There's no way that Google+ can have so many new users without Facebook feeling it somehow. Even with a number of new features, there were already signs of attrition even before Plus took off. Look for Facebook to do everything they can to keep their user numbers looking good until their IPO, then watch things flatten out after that.
4. Twitter grows up. While dismissed by many, Twitter is still a force to be reckoned with and will be more so in 2012 as the next versions of Twitter and Tweetdeck come online and provide new features such as brand pages and embedding. Look for user numbers and social influence to increase in 2012.
5. The major labels wind down. It took a while but it seems like artists everywhere have finally gotten the message - in this Music 3.0 world you don't need a record label, at least not in the beginning. The Big 3 have less and less to offer while taking more and more of a revenue pie that isn't that big to begin with. The majors will always be there, but will only be useful in some capacity to the "1%."
6. Indie labels make some headway. As I mentioned in the 2nd edition of Music 3.0, the business won't take the next step in its evolution until a new crop of entrepreneurs takes root. There's evidence that's happening, as new more efficient and plugged-in indie labels take hold with their heart in the right place - music, not money.
7. Concert attendance takes a leap. It's true that The Stones are doing their 50th anniversary tour, and Van Halen will be trying to regain their glory days this year, but that's not what will make 2012 a banner year for concert attendance. In 2011, for the first time at least 50% of the biggest earners on the road were not legacy artists. Finally a new crop of current artists are beginning to pull their weight in venues all over the world. Add to this some pricing sensibility that seems to be coming back to the concert marketplace, and a stronger economy, and you have a record year.
8. Music publishers feel the pain. Publishing has always been the secret cash cow of the music industry, not well understood and somewhat hidden from prying eyes. That's no longer the case as artists and writers are more knowledgeable than ever and push for better deals. That said, the music economy has finally caught up with publishing, as mechanical royalties are way down due to low sales and an increase in streaming, and broadcast revenue continues to dwindle. Look for that trend to continue in 2012.
9. Artist royalties take a beating. Even though the industry can be joyful for a slight increase over 2010, that's due to superstars like Adele, Lady Gaga and Taylor Swift, et al. For the average successful artist, the only thing to look forward to is the ability to make a living, as CD sales aren't what they used to be, and downloads give way to streaming, which doesn't pay nearly as much. Time to hit the road to make some dough.
10. Subscription is the new download. Another prediction that I made in Music 3.0 2nd edition is that we'll soon see a major shift from downloads to subscription as a way of consuming music. That's already happening, thanks to Spotify's launch in the US, but we'll see it snow ball in 2012 to the point where many consumers will never purchase another download again.
11. The cloud is in the air. In 2011 we saw the introduction of cloud services from Amazon, Google and Apple, and while they haven't been in the forefront of our daily news cycle, they are making an enormous impact upon our daily lives as people see how useful storing their data in the cloud can be. Expect to see a gradual increase in cloud computing use in 2012 until we all use it so seamlessly and often that it becomes a huge part of our lives.
12. Micropayments hit their stride. In 2012 micropayments will finally come to pass in the way that all the previous predictions hoped it would. Micropayments are small 1$ or less transactions that up until now have been impossible to make because of transaction costs imposed by banks. The floodgates are now open and numerous services have found ways to work around the bloodsuckers, as artists and indie labels soon find new ways to take full advantage of marketing to their fan base.
That's it. It'll be fun to have a look at the list at this time next year and see exactly which ones came to pass. Have a happy, artistic, and prosperous New Year.
Read my 2012 predictions for music production on my Big Picture production blog.