Back in 2013, as the recorded music business grappled with an historic collapse in revenues, a hapless reporter asked two artist managers their thoughts on the plight of the industry.
The response was bemused laughter. Their No. 1 client was a certain One Direction. Amid the wholesale collapse of the wider industry, they and their clients were having their best time yet.
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It’s a potent reminder that in neither good times nor bad is success or good fortune equally distributed in music. At the lowest points, someone somewhere is having a great old time; even in boom times, someone is miserable.
Which brings us to summer 2026 and the mood of an industry which seems, well, muted at best.
Scene One: a computer screen displaying a plunging music-company share price. Camera pulls back to reveal a trader staring aghast at the numbers.
Scene Two: a cocktail party in the Hamptons. A slightly grizzled but certainly well-to-do musician bemoans his lot, fragments of dialogue emerging over the hubbub: “Everything’s too difficult… There’s no money in it… AI will put us all out of work…”
Having taken an unfamiliar “break” from the business these past couple of years, noses far from the grindstone, deep in garden leave — you should see the dahlias — may we be allowed to share a little perspective.
The music industry is in remarkably good shape.
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For the best part of 15 years, during the rise of what deliberately set out to be a different kind of music company, we argued that the most significant impact of streaming would not simply be its desperately needed effect on revenues — and don’t forget those have doubled since 2013 — but the long-overdue structural changes it would unleash.
We were right. For artists and songwriters, digital platforms have driven an unprecedented democratization of creation, distribution and marketing. Just look around:
More artists have meaningful access to a global market, and more routes to earning money from recorded music than ever before. Social media has made marketing reach more accessible than ever. Streaming has led to significantly higher artist royalty rates based on a simplified business model. Songwriters collectively receive a materially greater share of recorded music revenues than in the pre-digital world. Independent artists and businesses command a greater share of the market than they have for decades.The impact on the business has been just as decisive. The economics created by streaming have helped enable artists and songwriters to sell catalogues for millions or even hundreds of millions of dollars; led billions of dollars of new capital to enter music, funding not just catalogues but artists, entrepreneurs and technology companies; and created a landscape in which an increasing share of rights and revenues sit outside the traditional major-label system.
For everyone who abhorred the waste, executive egos and dismissive or exploitative attitude towards “talent” that characterised the worst of the old world, this should be a time of celebration. Artists and entrepreneurs have more options, more potential partners and more agency than ever before.
Naturally, that doesn’t mean everything is wonderful. Far from it.
The economics of touring are brutally difficult for many artists. Breaking new acts in a world of almost infinite choice is harder than ever. Growth in mature streaming markets is slowing. The sheer volume of music being released creates unprecedented competition for attention. And AI raises profound questions about authorship, rights and how value will be distributed.
Those concerns are real, but they are not evidence of the business dying. They are symptoms of an industry undergoing another structural transformation.
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Part of the problem is that we continue to judge the health of music through an increasingly outdated lens.
For understandable historical reasons, the fortunes of a handful of large record companies have traditionally served as shorthand for the fortunes of the entire recorded music sector.
The major record companies remain powerful, successful and important businesses. But their interests are not synonymous with those of the music industry as a whole, and their share price woes are a critique of their business model, not of the prospects for music itself.
The verdict from investors has been brutal. At the time of writing, Warner Music Group has lost nearly a quarter of its value in a year and Universal Music Group nearly 40%.
The fact is, streaming and the forces surrounding it have steadily undermined many of the assumptions on which the traditional bundled record company model was built.
Take the idea that major record companies are uniquely essential to discovering talent. That was never really true. Imagine the industry without Muddy Waters (Chess), U2 and Bob Marley (Island), Taylor Swift (Big Machine), Marvin Gaye (Motown), Depeche Mode (Mute), Guns N’ Roses (Geffen), John Lee Hooker (Modern Records), The Police (A&M), Adele (XL), Blondie (Chrysalis), Oasis (Creation) or Bad Bunny (Rimas Entertainment).
Today, the argument is less relevant still. Much of the discovery, audience-building and proof of demand that once happened after an artist entered the record-company system now happens before they even get there.
Meanwhile, the cost-benefit equation of a bundled major-label contract is less compelling when many of its component services can be sourced separately, often at lower cost. Finance is available from multiple sources. And if sheer scale were still the decisive advantage it once was, surely the largest record companies would also be the most profitable.
The defining characteristic of the old music industry was that it was extremely hierarchical, dominated by a handful of gatekeepers who made change exceptionally difficult.
The defining characteristic of today’s music industry is that power is decentralized and change is possible almost everywhere.
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What happens next is impossible to predict, but the direction is clear: further unbundling of the traditional record-company model; more sources of finance competing for rights and talent; more ownership retained outside the majors; new businesses built around services rather than control; and AI reducing the cost of some functions while increasing the value of others.
So yes, there are challenges. There always are.
But an industry that survived piracy, rebuilt itself thanks to the investment and vision of streaming platforms and doubled its revenues, attracting enormous new investment and dramatically widening the range of options available to artists, should resist the temptation to mistake disruption and the travails of two quoted companies for more general industry decline.
Cheer up. And fasten those seatbelts.
The revolution’s only just begun…
Hartwig Masuch was until 2023 founder and CEO of the relaunched BMG. Steve Redmond was BMG’s executive vp of global corporate communications until 2024.
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