An in-depth report on the future of the music industry calculated that artists received just 12 percent of all income from the U.S. market in 2017. However, Citigroup's report, titled “Putting the Band Back Together: Remastering the World of Music” also notes that the figure was higher than it had ever been, and sounded an optimistic note for musicians.

“In the U.S., the music industry generated $43 billion in revenue, matching the prior peak in 2006,” Citigroup said. Publishing, licensing and advertising revenues were “flattish,” but consumer outlays such as concert tickets and subscriptions were at “all-time highs.” They added that the industry still had strides to make in order to adapt to shifting market and technology changes from recent years. “[R]ecord labels are still record labels. Music distributors — Apple, Pandora, Sirius, and Spotify — are just music distributors. And, concert promoters — like Live Nation and AEG — are still concert promoters.”

The report continued: “Artists’ share of music revenues is small. In 2017, artists captured just 12% of music revenue. … The proportion captured by artists is, however, on the rise (it was just 7% of industry revenues in 2000).” The strong concert scene was the main reason things had improved, they suggested. Again, Citigroup stressed innovation: “It is also clear that the future is potentially bright for artists willing to embrace new ways of generating revenue and also for the companies that might help them do this,” they added.

Among the predictions for the future were: “[P]hysical music sales will continue to falter. Increasingly, consumers will just rent music. … Live music events — including concerts and festivals — will continue to grow. … [W]e are not convinced all artists will adopt a DIY model. Reflecting this, record labels will continue to play a role. [W]e expect the traditional labels to ‘follow the money’ with their diversification strategies and the most likely route is to move further into live events.”

Report contributor Kevin Brown, CEO of the GigRev artist service, said: “It is not an industry where you can learn as you go along. … It’s all very well accumulating knowledge as you go along, but by the time you are 50 and understand how the industry works, you are too old to be the pop star you needed to be at 18. And even if you do get a break and you don’t get ripped off, the revenue that an artist can earn through standard channels is tiny. This has forced new artists to be a lot more innovative.

‘[T]he key is to reach those first few thousand people, which is all about the music. It’s the music that will make it happen. Once you have done that, then you've got an opportunity to monetize those people but you will be facing the odds if you simply put your music on Spotify. You may get discovered but you still need tens of millions of plays to earn a living – and loyalty of fans is not the same as plays. It’s about creating a community and monetizing this. At a basic level, this might be by selling them merchandise — don’t underestimate the economics of selling them a T-shirt or a CD — or by curating live experiences.”

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