Celebrating music’s best

In a couple of days, viewers from across the country will tune in to watch the 57th annual Grammy Awards show. Many will be watching to see if Sam Smith grabs the Grammy for Album of the Year. Others undoubtedly will tune in to see if Hozier successfully takes the Song of the Year award for “Take Me to Church.” Regardless of the outcome of those particular contests, the undeniable winner this coming Sunday will be the music industry at large, along with its dedicated and most passionate consumers.

{mosads}Thanks to recent innovations in the delivery of online music services, fans of the music industry’s greatest talents are able to legally consume music in an unparalleled fashion. From Internet radio to online music stores, consumers are now able to access or own music in a manner that’s tailored to match the specific budget and choice of each individual listener.

The byproduct of this digital music revolution isn’t just happier consumers. It’s also led to a decrease in online piracy rates — in some instances by as much as 50 percent — and an increase in the online discovery of emerging musicians.

Indeed, a recent study released by the Country Music Association highlighted the tremendous opportunity for new artist discovery that occurs via online music services. Even more important, the same study revealed that after a song is discovered online, music fans are three times more likely to purchase it, in comparison to when it’s encountered on other music platforms.

The combination of three factors — greater consumer satisfaction, decreased online piracy rates and greater artist discovery — is beginning to generate real revenues for the music industry.

According to the recording industry, in 2011, digital music accounted for over 50 percent of music purchases, beating physical music sales for the first time — and digital sales and revenues have been on a steady increase ever since then. According to recorded music industry reports, in the first half of 2014 alone, revenues from on-demand music services jumped by more than 23 percent to reach $371 million; while revenues from Internet radio jumped an impressive 56 percent to reach $164 million. During the same period, revenues generated by the online sale of music downloads were reported to be a healthy $1.3 billion.

The positive change in fortunes generated by new music delivery services isn’t limited to recording artists and their representatives, either. Payments made to intermediaries on behalf of songwriters by digital music services, along with a host of other entities who license musical compositions, also appear to be on the rise.

In 2014, for example, the music publishing industry estimated domestic publishing revenues of $2.2 billion; an increase of $300 million since the last time such figures were made publicly available. In the same year, both ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.) each reported an all-time high in the collection of performance royalty revenues of $944 million and $977 million, respectively — a trend that reflects approximately 50 percent growth in revenues over the course of the last decade.

Can more be done to ensure an even more prosperous future for the music industry? The answer is undoubtedly yes.

Recording artists, along with songwriters, can continue to make the type of music that Americans — and fans across the world — have grown to love. Consumers, for their part, can show their support by continuing to foster legitimate services and revenue streams that support such creativity; and digital music services can continue to connect both groups in a manner that is both financially and personally rewarding.

Sunday night’s celebration is of tremendous importance, but hopefully the best is yet to come.

Barnes is general counsel for the Digital Media Association.