Streaming platforms give us access to new music, so why are fewer people listening to it?

The rise of streaming has led to us spending more on music overall, but less of this is going to new music. My estimates suggest new music revenues in Australia have grown by just 4% since 2014, in a market that has doubled in value.

A similar trend is evident overseas. In the United States, new music accounted for an estimated 65% of recorded music revenue in the pre-streaming economy, compared to 25–30% post-streaming.

New talent can’t rely on industry

From an Australian perspective, the challenges for new music have created concern about pathways for emerging artists, and the music industry’s commitment to developing them.

Industry insiders I interviewed for the research highlighted how labels were playing a diminishing role in artist development.

The stress on the new music economy – combined with the reduced presence of Australian artists in the ARIA charts – has led to ongoing calls for the government to support the industry via cultural policy initiatives.

The recorded music industry also has a role to play in addressing the environment which it helped to create – particularly in regards to how artists are remunerated.

The current “pro-rata” model used by streaming platforms places equal value on all streams, regardless of whether it is a catalogue track or new release. Under this model, there is no business incentive to prioritise new music.

Adjusting this model, so that new releases are valued higher than catalogue music, could create this incentive.

Major labels will likely resist change, as they reap the rewards of selling back catalogue at pure profit. But the idea of valuing new music over catalogue is not new.

Before the streaming era, new release CDs were sold at full price and catalogue CDs were often sold at mid-price. This model reflected the costs associated with developing new products and provided business incentive by attaching greater profit margins to new releases.

Prioritising long-term industry health

Australia’s new music economy has experienced significant revenue decline and reduced industry commitment to new and emerging artists.

For independent labels, which are largely dependent on new release revenue, the ability to compete in a catalogue market is limited. For artists, the lack of pathways to earning revenue may lead to disconnection with the sector.

The role of Australian major record labels as generators of local talent is also in question.

In addition to policy, a business incentive for record labels to invest in new music could enable the long-term health of the sector.