According to the RIAA, Revenues from streaming music grew 26% to $5.9 billion in the first half of 2021, accounting for 84% of total music revenues for the period and a 4% climb from 2019 levels. It is safe to say that the pendulum has fully swung in favor of digital and streaming.
The streaming industry has changed the music industry, from the quality of the music to the distribution and how we access and consume music. A few people still oppose subscription-based streaming services and the idea of streaming, but a few saw it a mile away and plugged in.
According to Dr. Rick Hendrix, the CEO of the Rick Hendrix group of companies, "The digital era and the age of streaming didn't affect the industry positively or negatively, it just changed it. Some parts of this change may be construed as positive by some people and negative by some, but at the end of the day, change is permanent and fighting it is the fastest way to remain irrelevant in the industry."
Dr Hendrix is a veteran music executive and media mogul who has worked with artists like Whitney Houston, U2, Elvis, Mariah Carey, Miley Cyrus, and Garth Brooks, among others, earning himself numerous album awards for his work in the music industry, and scoring hundreds of number 1 songs on Christian and secular radio. His most recent award was from Sony Music in 2021, recognizing his work with Whitney Houston.
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In the older era Dr Hendrix was a rare breed, known for his passion and ability to help and advocate for artists to become independent of traditional labels and managers, allowing them to own their masters, have rights to their music, and operate as an arm of the label instead of just a signed artist.
Long before the music industry began tumbling into the digital era, he had already been utilizing the internet to promote his artists along with radio, and began creating a way forward from the physical purchases of music to impressions and the digital era.
More Consumer Focus
Social media and streaming have combined to skyrocket fan engagement as the music industry has grown. Social media has helped humanize the artists more and enabled them to understand their fan base and connect with them.
In addition to humanizing the artist, it has also helped humanize the fans and consumers. Fans now have faces and names instead of just being data points on sales sheets. Despite these changes, Dr Hendrix admits that a lot of executives are still taking this advantage for granted;
"One of the most important lessons is often the one that is taken for granted - taking care of your audience (client and or consumer). How can you genuinely instill utility and or value without a community? We always find the human side of every project for our artists - one where everyone wins; the artists, the labels, and the consumer. Nothing fails if everyone wins. And nothing fails when a good song is on the air. Projects are often too focused on the bottom line, but they need to be focused on the mainline - the consumer."
More Variation
Listener engagement habits have significantly changed since the turn of the millennium, especially regarding consumer tastes. While there has been significant variation in the industry for a long time, technology has highlighted this variation more, incentivized it, and made musical variety more accessible.
The algorithms utilized by many streaming services showcase that companies are now targeting variation from an engagement standpoint, which means that the fans are being heard more.
"The one-size-fits-all method that the industry has utilized for decades can no longer fly; people love what they love. Music speaks to the soul, and the condition of the human soul is a very complex issue; different things speak to different people" Dr. Hendrix explains, "offering more variety is the best way to humanize the product. While there used to be labels focused solely on one genre, everyone is now becoming more conscious and creating more divisions."
Dr Hendrix recalls pushing for Capitol Records to release a Garth Brooks song to gospel and country radio in the early 90s that incorporated gay rights and human rights. The song We Shall Be Free became one of Brooks' most significant singles, even winning a GLAAD award, which was unheard of in country or gospel music in the 90s - let alone today. "They say to wash, rinse and repeat, so over the years, I continued pushing music and films to the market with significant press, radio, and consumer packages always equally mixed. We would score thousands of national hits and earn hundreds of millions in product sales."
More Artist Penetration
Some of the most powerful musical hits of the last decade were cooked up in a teenager's bedroom using substandard equipment. The low quality of music doesn't seem to faze the fans who pushed these songs to prominence. The impact of streaming and social media on artist penetration has been phenomenal. Artists can interact directly with their audience, create songs and post to all streaming platforms without the help of a manager or record label.
The arguments against extreme digitalization harp on the lower quality of the music; streaming platforms often have to compress the music files, which leads to a loss of some quality. The easy accessibility has also led to some subpar musical releases. However, Dr Hendrix differs from this viewpoint.
In his words, "The place of music labels, and executives will always remain sacrosanct in the industry. In many ways, social media and streaming platforms have made talent and potential talent more visible. It has also given artists an option and reduced the leverage that labels traditionally had over them, which for me is a massive plus.”
“Artists are now positioned better and can often attract some degree of success before labels get to them, this way they come to the table with a loyal followership and can add directly to the bottom line. This flexibility and liberty are what I have fought for my artists for years and these platforms are making it a reality for the next generation of musical talent."
The current engagement and revenue statistics from streaming platforms suggest that consumers prefer variety and quantity over quality, something that traditional music lovers would always oppose. However, the numbers don't lie. “Having been in the industry from the early days till now, it's a wonder how much it has changed, but right now it's all about positioning yourself for success in the digital era.” He said.
Having seen it all, Hendrix is of the opinion that with digitalization, the industry remains in safe hands.
