Introduction

In the last 24 years, the music industry has experienced a seismic shift as big tech companies have increasingly gained control and influence. This takeover has had positive and negative implications for artists, listeners, and the industry. While the access to music listening, music creation, and distribution has widened, the corporations that control those pipelines don’t always have the best interest of artists, musicians, and music in general at heart.

The Rise of Streaming Platforms

One of the critical ways big tech has taken over the music industry is through the rise of streaming platforms. Companies like Spotify, Apple Music, and YouTube Music have revolutionized how we consume music, offering vast libraries of songs at our fingertips. This robust and broad expansion of music access decimated the music industry initially, but as wide-scale adoption is just now peaking, the music industry has returned to soaring profits.

However, this shift has also led to concerns about fair compensation for artists and the devaluation of music. A singular music stream is far different than buying a whole album or even one song. But that stream is still incredibly important to artists and musicians - and large record labels. Big Tech’s takeover of the music industry put them in the position to set the payout per stream. They are incentivized to pay as little as possible to the rights holders of the music. And while a portion of that streaming payout (royalty) is federally set and mandated by the Copyright Royalty Board, large tech corporations have deep pockets to litigate and challenge the rulings.

Data and Analytics

Big tech companies also have access to vast amounts of user data, which has become a powerful tool in shaping the music industry. With detailed insights into listener preferences and behavior, these companies can curate personalized playlists, recommend new artists, and even influence the popularity of certain songs. For example, Spotify's algorithmic playlists, such as Discover Weekly and Release Radar, have become popular discovery mechanisms, with more than 2 billion playlists created by users as of 2021. This data-driven approach has altered the dynamics of music discovery and promotion.

While some of this vast data is available to the artists (whose music generates the streams), it's highly generalized and anonymized. Artists might enjoy high daily, monthly, or yearly streams but cannot tell who is streaming their music. General demographics are helpful, but artists can’t create a direct fan relationship with them. To do so, they must rely on a separate Big Tech company,

Music Production and Distribution

The influence of big tech extends beyond streaming platforms and into the realm of music production and distribution. Tech companies have invested in acquiring record labels, studios, and distribution networks, giving them unprecedented control over the entire music production process. For instance, in 2020, Tencent Music Entertainment Group acquired a 10% stake in Universal Music Group, one of the world's largest music labels. While this has provided opportunities for independent artists to reach wider audiences, it has also raised concerns about monopolistic practices and the homogenization of music.

Big Tech’s thirst for market share and participation in every stage of the music-making and- distributing process has allowed them to shape the sound of music and determine where music is headed.

Challenges for Artists and Creativity

As big tech companies dominate the music industry, artists face new challenges regarding their creative freedom and financial stability. The shift towards streaming has significantly impacted revenue streams for musicians. According to a study by Citigroup, musicians now earn only 12% of their income from recorded music, compared to 43% in 2000. The pressure to conform to market trends and algorithms can also stifle artistic innovation and diversity.

Artists rely heavily on live performances and merchandise sales to make a living. Still, the pandemic hurt the live market for independent artists and musicians with venue closures and increased need to sell tickets.

The Future of the Music Industry

The big tech takeover of the music industry shows no signs of slowing down. As technology continues to evolve, new challenges and opportunities will arise. It is crucial for stakeholders, including artists, listeners, and policymakers, to navigate this changing landscape carefully and ensure a fair and sustainable future for music.