Ad agency

For quite some time the fate of the music industry was in question. Thanks to the advent of file sharing and digital downloads, the music industry has taken substantial hits when it comes to the sale and marketing of bands and acts. Obviously the days of the physical object(Compact Discs, Tapes, Records) being the definitive source for music are long gone. For quite some time music execs were hammering at the wall of technology trying to figure out how to be profitable again.

While the World Hears Music Differently, Much About the Industry Stays the Same

While Technology is making it much easier to access new artists, there are parts of the music industry that effectively stayed the same. Traditionally the label makes the most money from a music act from the sale of albums and other merchandise. This is part of the reason that the industry so voraciously went after digital music and music sharing technology in the early days. Every song that was being shared for free effectively meant money out their pocket. On the artist side, not much has changed. While the changing music consumer paradigm shifting does affect artists to some extent, they still have a basic function that has gone unchanged since the days of old that is . Regardless of how relentless of a marketing agency or creative agency an artist has behind them, there is still a simple fact. Even the most astute advertising agencies will agree that if an artist wants to have a lucrative career, they must tour, and be seen in public still. Musicians make more from concerts and merchandise than from album sales as a general rule. But it seems now that the music industry can take a cue from advertising agencies when looking to promote new acts and music.

Streaming Services Acting as Advertising Agencies

But, now with YouTube it seems that the music industry has found the best ad agency they could have ever hoped for. According to reports YouTube has paid the music industry over $1 billion dollars from advertisements alone in 2015. With the popularity of streaming music, there is a great opportunity for promotion through mediums such as YouTube. With this large advertising payout the Music industry has broken a ten year slump of profits. It is even expected to get better for music execs. It appears that in the next ten years, if trends continue these revenues will double.

Not Everyone in the Music Industry is Convinced of YouTube as Advertising Agency

While some in the music industry are skeptical of the cross section of streaming music sites such as YouTube and their function as advertising agencies. When compared to more dedicated music streaming services such as Apple Music sharing services, YouTube’s royalties are lower. But as the case usually is when it comes to shifting business structures, the consumer is king. Now that YouTube has given the music industry such a large cash injection, the way forward is slightly unclear. Some say that a subscription based service could continue to net profits for the music industry while others think that streaming music might not be the golden goose that it claims to be even with the large amount of royalties paid out last year. Maybe the music industry should take a page out of their history and embrace and innovate the medium otherwise they may be headed for another slump.

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