Let’s take a look back at the year in review and go out on a limb for what could happen in 2022. We’re in unpredictable territory for a bunch of reasons, but there are encouraging trends in the music industry.
As anyone reading my blog posts or watching my Indie Music Minute video series knows by now, I pay a lot of attention to the trends in the music industry and have my fair share of opinions (who doesn’t?). So I thought I’d collect my thoughts and share a 2021 recap and some bold 2022 predictions to summarize what’s been an encouraging year in many ways year and try to shine a light on what might be on the horizon.
2021 music industry recap
- Physical media is on a roll! While 2020 was a pretty disastrous year for physical media sales due to concerts being shut down, things picked back up in 2021 and then some: vinyl sales continued their meteoric (and improbable) rise, and even CD sales are ahead of last year! If concerts and tours come back in earnest in 2022, CD, vinyl, and merch sales will rise, particularly for gigging indie artists who rely on hand-to-hand transactions.
- Vinyl growth continues to grow at double digits. While vinyl manufacturing is impacted by the same supply-chain issues that just about everything else under the sun is, demand continues to increase while capacity to manufacture is strained. Some manufacturers are quoting 12-month turn times on vinyl orders — it’s creeping into the realm of the ridiculous. Our turn times are definitely longer than usual, but at around four months, they’re still some of the fastest you’ll find.
- NFTs: lots of smoke… any fire? While I do believe there’s an opportunity for artists to make something of NFTs, they are so hard to purchase — and still rather confusing — and so far, they’re more of a curiosity than a real opportunity. Maybe 2022 will provide some answers.
- TikTok is a real music platform. 430 songs surpassed one billion views on TikTok in 2021. TikTok offers a legitimate place for new artists to break through and is giving some legacy artists a new lease on life. There are opportunities for you on this platform.
- DistroKid valued at $1.3 billion. Here’s one that falls under the “I didn’t see this coming” category. Indie distributor DistroKid, who with CD Baby and Tunecore fall under the Big 3 for indie distributors, was valued at $1.3 billion by investors. So while individual indie artists won’t stand to gain big-time, a few investors stand to see a big payday at some point.
- Podcasts… are they your competition? Spotify, for one, has dumped millions of dollars buying podcasts and podcast creation companies and — at least for now — most podcasts don’t require royalties to be paid, so it may be cheaper for the streaming platforms to push podcast content rather than music content. Something to keep an eye on.
- Concerts are on again? In the ongoing COVID saga, concerts started making a comeback in 2021, though the Omicron variant has contributed to the on-again-off-again seesaw of live music. But Live Nation’s stock is riding at an all-time high after hitting an all-time low the year before. The demand is there, so let’s hope we ride the trend of “on-again” from here on out.
- Indie market share is at 43 percent — the highest it has ever been. Mark Mulligan, of the Music Industry Blog, tallied independent music from a wide range of independent distributors, including those owned by the majors (like The Orchard, owned by Sony), and determined that independent artists made up 43 percent of music industry revenues in 2021 and the indie segment is growing faster than the majors.
What does this mean for you?
Mostly… nothing. Your demand as an independent artist is created by yourself – your talent, your hustle, how hard you are out there performing and pushing. You definitely want to know about industry and technology trends, because you want to be where your fans are, but trends come and go. If you’re in this game for the long haul, you are the one in the driver’s seat. So keep on grinding, and tomorrow you’ll be slightly ahead of where you are today.
Bold music industry predictions for 2022
I may be going out on a limb with some of these predictions, but what’s the point of doing this if you don’t go big? Bookmark this page and let’s see if any of these come through in 2022.
- Pandemic fatigue leads to a full recovery of the concert industry. 2022 puts us into year three of the pandemic, and with booster shots offering strong protection, the concert industry will accelerate the comeback started in 2021. Even music fans previously hesitant to return to concerts will be eager to return to live shows as they tire of sitting at home on Saturday evenings.
- Bandcamp introduces NFT sales on its site. 2021 saw the hype about NFTs reach a frenzy, but NFTs are still unintelligible to the average independent artist and music fan, in part because of all the confusing marketplaces, pricing policies, and reseller options. Bandcamp sees (and seizes) the opportunity to bring NFTs into the music mainstream by simplifying direct-to-fans commerce just by adding the NFT format to its e-commerce store.
- Artist-centric streaming royalty payments make noise, but industry royalty structures don’t change. Marginal streaming platforms like Tidal and Soundcloud made some waves in 2021 with their artist-centric royalties, but actual benefits to artists have proven minimal and the mainstream players like Spotify, Apple Music, and Amazon continue to face no real pushback on royalty rates (besides the constant chorus of “royalties are too low”). As such the industry has no incentive to change royalty payout structures that continue to unfairly favor the top one percent of artists.
- Streaming subscription prices increase 20 percent. With prices and costs going up everywhere, the major streaming platforms take a deep breath and make use of the opportunity to raise prices in mature markets in the US and Europe by 20 percent. Lo and behold, customers do not defect in droves, thanks to the stickiness of their existing artist, song, and playlist collections on their favorite streaming platform. The DSPs will spin this as a way to increase royalty payments to rights-holders (but… see above).
- Frustrated with vinyl, the industry turns to the CD as the big physical media format. Frustration with the vinyl supply chain finally exceeds the love of the format, due to vinyl prices rising by double digits and many record-pressing turn times exceeding six months. The search for a viable alternate physical media format that allows artists to drive fandom monetization turns to the compact disc, which turns 40 in 2022 and is well-poised to be the next comeback music format.
- Artist backlash flares up against the MLC. The Mechanical Licensing Collective (MLC) was formed to improve accuracy and transparency of royalty reporting and to eliminate the royalty black boxes that have historically existed in the music industry. In reality the MLC has become a high-overhead operation that lacks transparency and has built up a large pool of royalties they have been unable to distribute. As this becomes more evident in 2022, the MLC will be put on the defensive by a growing group of vocal artists and composers.
There you have it — two years in review, and one hasn’t even started yet. Enjoy your holidays and your end-of-year celebrations and we’ll be here to help you conquer the world in 2022. Thanks for your support and keep making music!
Tony van Veen is the CEO of DIY Media Group, the parent company of Disc Makers and BookBaby. As a college student, he played in indie bands, created his own LPs, cassettes, and t-shirts, and sold them at shows. Today, he collects CDs, vinyl LPs, and concert t-shirts to support the artists he loves.
The vinyl manufacturing process at work (watch the video!)
Can You Sell Your Music as an NFT?
Your #1 job as a music artist? Create demand for your music.
New music royalties: The Mechanical Licensing Collective and what it means for you
Indie Music Minute on the Disc Makers Blog