Music Industry Blog

2025 was a good year for the recorded music business. After a modestly performing 2024, revenues grew by 9.4% in 2025 to reach $39.5 billion. See MIDiA’s ‘Recorded music market 2025 | Rise of the fan economy’ and accompanying 12 sheet dataset for MUCH more detail.

It was a year that saw strong performance across the board – to the extent that even downloads stopped its decade-plus race to oblivion. But there was one revenue category that left all others for dust: expanded rights (labels’ participation in merch, live, brand etc), growing by a whopping 21.5%. Expanded rights and physical – which also had a strong 2025 – are the centre pieces of record labels’ fandom strategy. 

The fan economy has fast become a central part of the recorded music business, from the global success of K-pop, through indie sales on Bandcamp, to major label D2C strategy. This is why MIDiA has been including expanded rights as part of our recorded music market value since 2020 – during which time revenues for the segment more than doubled.

2025 represented a milestone for the rise of the fan economy: for the first time in the streaming era, streaming revenues grew slower than the total market, due to strong increases in expanded rights and physical. In fact, the contribution of expanded rights was so significant that using the traditional measure of recorded music (i.e. not including expanded rights), total revenue growth was a significantly smaller 7.7%.

To be clear, 7.7% is still strong growth and a welcome rebound from the 4.2% growth registered in 2024. This 2025 uptick was underpinned by a good year for streaming, with the growth rate increasing from 2024, indicating that there is still plenty of momentum left in the market. Streaming still represents the majority of revenues and contributed more new revenue than any other segment. Yet in percentage growth terms, physical licensing and expanded rights all grew faster in 2025.

The key signal here is that the recorded music market is diversifying. Streaming is the industry engine room, but labels are building an increasingly multifaceted business on and around it.

A mix of currents flowed underneath the headline global market figures: 

• Latin America recorded the fastest regional growth
• Non-major labels grew market share with expanded rights but lost it without
• Artists Direct (self-releasing artists) saw their market share fall as streaming payout thresholds took effect – despite strong growth in streams

In fact, streaming is the place where all the complexity lies, with factors such as Artist Centric, Discovery Mode, audiobook licensing carveouts, price increases, major label distribution of independents and many other dynamics bringing an unprecedented degree of nuance to the market. 

2025 threw the recorded music business no end of challenges and disruption, not least of which being AI. The industry’s response? Grow revenues faster than in 2024, diversify income streams, optimise existing models and license new ones. Growth requires more work and effort now than it did during streaming’s peak growth years, but the fact it is increasingly spread across multiple formats, reduces risk and over-reliance on streaming. This state of affairs will prove invaluable in the years of fast change that will lie ahead.

‘Recorded music market 2025 | Rise of the fan economy’ ’ is available now for MIDiA members. If you are not a client but would like to learn how you can gain access to this report, please reach out to enquiries@midiaresearch.com.

Everything these days is content – but the word is as problematic as the implication. ‘Content’ is defined by other. It is defined by filling something else, being part of something else. It is something that only exists within another context. It implies not being of itself but of another entity. And that is the direct through line to the cultural challenge of calling everything content – it is being othered.

Andrew Lloyd Webber once argued that treating art as content is like saying the fine red wines of France are merely content providers for the glass making business. While the quote may sound old school – and you can practically hear the righteous indignation dripping off the words – it gets straight to the heart of the matter. There is no written cultural law that states that art has to be content in the digital era. It simply became so because most forms of art and entertainment bowed to the lexicon and the business models of tech – and they did this because the platforms pushing this worldview were the most immediate route to audiences of scale.

There is a tendency to consider critiquing today’s dominant business models as being outdated, outmoded, harking to some ancient, past idyl. However, new does not always equate to progress. In fact, with more than a decade of digital being at the heart of entertainment, we can see what is and what is not working.

To be clear, this is not to dismiss the immense benefits that social media and streaming have brought to entertainment (rights holders and creators alike). The price paid, however, has been realigning creativity and culture around feeding content machines. Content machines that have insatiable appetites. Everyone has been compelled to play the double V game – Volume and Velocity. Always creating, always releasing, always posting. Always on.

The problem with the double V game is that it benefits the platforms far more than it does those who do the making. Calling everything content merely codifies a shift in the power equation. Because creators and rights holders do not have access to, nor control of, the all-important algorithms, they become slaves to them. BuzzFeed’s former VP, Jonathan Perelman, once said something that captures the dynamic perfectly: “Content may be king, but distribution is queen and she wears the pants” (via Forbes). If content is indeed still king, it is little more than a ceremonial figurehead in today’s entertainment economy.

It does not have to be this way. Nowhere is it written that rights holders and creators shouldn’t have ownership of their audiences or that they shouldn’t be able to create and distribute on their terms. They may have to opt out – or threaten to opt out – of the systems to change them. And that will be painful, without doubt. However, with ecosystems in which art is merely content, creativity is too easily reduced to processes and algorithms. And what is perfectly geared to maximise returns in that environment? Yes, you guessed it, AI.

Content may only be a word, but words have power. It is time to start speaking a different language.

It has been some time since I last posted here. Most of my blog activity now takes place over at MIDiA Research https://www.midiaresearch.com/blog and in the MIDiA newsletter (including the newsletter-only ‘Letter from the MD’). Follow me there and LinkedIn https://www.linkedin.com/in/markmulligan/ for regular updates and posts. Now onto today’s Music Industry Blog post. It’s a controversial one, so hold onto your hats…

If life is a party, AI gate crashed it in 2025. With financial losses rising even more quickly than critical voices, AI will not find things quite so easy in 2026. You don’t have to look very far to find alarm bells being rung. Deutsche bank said of OpenAI’s $143 billion cumulative negative cash flow, “No startup in history has operated with losses on anything approaching this scale” (per Adweek). Meanwhile, at the World Economic Forum, Microsoft’s Satya Nadella said that we must “do something useful” or lose “social permission” for the vast quantities of electricity it requires. So much of the financial system is vested in AI’s success that a bubble burst akin to the dot-com era is possible. However, with an MIT report claiming 95% of businesses are getting “zero return” from AI investments, something is going to have to change. 

This is the state of AI at the start of 2026 – but it is not the state of music AI. Music is emerging as a case study of where AI is actually delivering (and getting better by the day). This means that everyone in the music industry needs to start thinking about how to co-exist with AI, whether they like it or not.

The impact of generative AI on music creation

The music creator economy may be the canary in the coal mine for AI’s impact on music. Leading company Native Instruments just announced that it is entering preliminary insolvency (per Music Radar). Native Instruments make beautiful software, hardware, and sounds that appeal most to established, successful music creators – creators that have spent years honing their craft. What it doesn’t do so well is cater for the emerging generation of younger creators that want to go to 0-100 in a millisecond. 

This new breed of creators want making good music to be as easy as taking good photos and videos on their phones. A growing number see making music as personal entertainment rather than chasing dreams of multi-platinum success. It is a dynamic we explore in our brand new report: Music creator survey | Creation: Rise of the new breed.

AI did not create this dynamic but it did supercharge it. If music software democratised the means of production, AI has set it free. Thom York sang “anyone can play guitar” but anyone who has tried  (as I have done since I was five) will tell you that you have to spend a lot of time being bad before you are good. This is the case with all instruments. Gen AI, however, takes away being-bad-to-be-good. Anyone can write a text prompt. Now, is a single line of text ‘creation’. I’d personally say ‘no’, but those doing it will likely think ‘yes’. It is a similar question to whether an unmade bed installation in a gallery art? Does that text prompt become creative if it is a deeply considered paragraph of text defining melodic feel, lyrical content, instrumentation and arrangement? If so, what is the word count cut off between being creative and not?

Is entering a text prompt ever going to be creative in the same way as sitting down at a piano and writing a song? No. But neither is opening a DAW and building a track from samples and typing in MIDI notes. But does that make electronic music not creative? (And before you answer, I know there are still plenty of people out there who would say electronic music is not ‘actual’ music!).

And we should expect gen AI music to develop and become more sophisticated, as all consumer apps do over time. But whereas most consumer apps improve convenience and reduce friction, gen AI music will likely go in the opposite direction. It started as zero friction but make music creation too easy and the creative satisfaction soon wears thin. Creative friction is what make music making so important to people. And, from a cynical perspective, the longer it takes to make music, the more time spent on an app.

Regardless of whether current gen AI is creation or not, the result is a whole new wave of people making music – and the number paying do so is rising rapidly. In 2025, gen AI music users were already 10% of all music creators, and the number paying to create with AI doubled. Meanwhile the number of people buying traditional music software fell in both 2024 and 2025, as did revenues. This indicates that not only are new creators flowing in, established creators are shifting activity and spend to AI too.

One of the reasons is that gen AI music is improving. While licensing disputes roll on, gen AI has learned from the best chord progressions, vocal performances, arrangements, etc., that music has to offer and – crucially – what consumers do with that. The constraint on quality was always going to be computation technique, not innate capability. 

Industry stakeholders can make the AI slop argument, and music critics can claim that they can identify even the best AI songs as not being made by humans. But that misses the point. AI is for the masses, both on the creation side and the consumption side. 

Tracks on Suno can sound convincing enough to the average listener. AI artists like Sienna Rose command millions of Spotify listeners, while earlier this month ‘Jag vet, du är inte min’ hit the top of the Swedish charts only to be banned for being AI (per the BBC). AI is not going to replace human content, but it will increasingly displace it. 

AI is here to stay in music

The music industry needs to learn not just where AI fits in it, but where it fits in AI. This requires work from the industry, such as creating ‘lanes’ for AI as we argued in our Future of music streaming report. However, it also requires artists to put in work too. 

Last year, YouTube-first music creator Mary Spender laid bare the challenge: 

“First it was about gigs and selling CDs, then it was streams, then it was about content, now it is something else entirely.”

Her solution? To use her YouTube channel as her ‘proof of work’, the thing that communicates the humanness of her music. As this piece from It’s Nice That lays out, this is an approach being pursued throughout the creative industries.

Gen AI music enters 2026 of the back of two years of hockey stick growth. The coming 12 months will likely be more of the same. None of this is to suggest that creators and rightsholders should simply sit back and let unlicensed activity continue unabated – those battles still need to be fought. But, just as happened with music piracy, consumer behaviour is accelerating regardless. 

Some rightsholders are already leaning into AI’s capabilities – as explained by UMG’s Jon Dworkin at MusicAlly’s great Connect conference. Others are resisting with every effort they can muster. Neither approach is more right or wrong than the other. Part of carving out a role is deciding whether you want to be part of or apart from. Whatever your choice, music AI is not going away – at least not anytime soon.

Gen AI music is going to get bigger before (if) it gets smaller. Legislation isn’t going to be fast enough to stop this near term surge. Until it does, everyone in the industry needs to work out what they want to do in that time. To be ‘part of’ or ‘apart from’. Doing nothing and hoping for it to go away is not an option anymore. And whether AI stays or goes, it has catalysed the consumerisation of creation. That genie is out of the bottle. And the implications for music listening are clear. The more time that people spend making music, the less they spend listening to music. Whether the music they make finds an audience is almost besides the point. As I wrote about consumer AI music back in 2023: the music industry should worry less about the song with 1 million streams and more about the 1 million songs with 1 stream.

A couple of weeks ago, electronic music artist Karra posted a video on YouTube about why she took her album down from streaming (one that she spent $100,000 making) and is now going to focus her efforts on YouTube (“an incredible platform for [her] artistry”) as well as selling content to music creators. The details in here will be familiar to most and many of them (fraud, bots, demonetisation, fractional royalties, slow payments, lack of support) are widely recognised as ‘industry glitches’. But when they are all stitched together, they can become an insurmountable challenge for independent creators. Big labels and publishers have the organisational scale to swat these glitches away like flies, but for creators doing everything on their own, it can make the system feel rigged against them. Karra’s solution was to opt out of the streaming economy entirely. Is she an outlier, or a sign of Bifurcation gathering pace?

Karra’s story is one of an artist trying to do what a label artist would do (co-writers, mixing and mastering, photoshoots, videos etc) but on her own. The result was a wholly professional release but because she lacked the operational resources of a record label, all of the glitches (canvass not uploading, social not monetising, music taking down for suspected fraudulent activity, fraudsters posting to her streaming profile, dodgy merch companies not paying etc) simply became too much. The kicker though was that her streaming royalties added up to little more than one percent of her outlay. Sure, if the album had been more successful or if she had spent less making it, that equation might have changed but this was an album with over a million streams, so not nothing. The kicker however, is that her YouTube video telling the story generated more revenue in one week than the album did on streaming in one year. 

There may not be many artists who depend upon streaming royalties to pay their bills, instead using it to fuel their core income streams (live, merch etc). But when the investment and effort vs rewards equation is so imbalanced, it is not surprising that a growing number of creators are now looking elsewhere. Among the non-DSP artists MIDiA has been tracking, YouTube keeps coming up as the place they turn to. Creating ‘content’ on YouTube is not of course for all artists, but now, neither is streaming. The reality of today’s music business may be fragmentation and complexity but this also means that artists now have more paths they can follow. 

The flipside of the complexity and fragmentation is that this strengthens the case for record labels. The depth and breadth of expertise needed to navigate today’s music business simply cannot be recreated by an independent creator’s own team. The likely implication is that successful independent creators have a choice between staying independent but specialising on one or two platforms, or working with a label to work across all of them.

An interesting additional element to the case for YouTube is that it enables artists to tell their story. As we enter the AI era, story telling has never been more important for artists to differentiate from something generated by a text prompt. As Mary Spender puts it, YouTube can play the role of ‘proof of work’. If / when AI music swamps streaming, not only will artists face royalty dilution and attention competition, they will have no meaningful way of communicating their ‘human-ness’ there. Unlike, of course, YouTube.

Streaming’s problems are a combination of self-inflicted injuries, industry dysfunction and unscrupulous third-party behaviour. Fixes are needed from both within and without. While larger rightsholders might look at this and think that these are little more than glitches for their businesses, if streaming fails, they fail. For all its creator-level faults, streaming works well at the rightsholder level. Rightsholders revenues are now dominated by streaming. As we first outlined in Bifurcation Theory in early 2024, streaming’s problems are opportunities for the expanding, non-DSP side of the music business. With a growing body of newer, younger creators prioritising YouTube and social over streaming, it will only be a matter of time before this starts translating into a clear culture-shift. Expect that to happen even faster if Gen AI starts to dominate functional playlists on streaming. YouTube will be waiting with open arms.

Keep an eye out for MIDiA’s forthcoming ‘Future of Streaming’ report that uses conversations with streaming’s leaders to present a bold vision for the industry’s future.

It’s that time of year again, MIDiA’s independent label and distributor survey is now live and waiting for your contributions!

(Click here to take the survey).

The annual survey is an opportunity for the global independent community to have its voice heard and this year is one of the most important yet for that. Our survey includes questions on many of the burning issues facing independents today: the impact of AI; two tier licensing; major label acquisitions; cutting through the noise; building fandom; forging artist careers and so much more. 

This survey will provide the marketplace with a definitive view of how the independent sector is performing and how it feels about an increasingly complex web of market developments, challenges and opportunities that comprise today’s market. As with previous surveys, all participants will get a report not just providing the data but analysis too. Not just the ‘what’ but the ‘why’ and the ‘how’ also.

We’re looking forward to hearing from you.

This post builds on our January 2025 post ‘The unflattening of music’ which itself built on two previous pieces (you can find links to both in that post).

Industries arrive at pivot points when an accumulation of fissures coalesce into one big crack. Streaming is approaching such a point. We are still at the lots-of-small-cracks-appearing stage, but there is a clear sense of something building. With streaming revenues now representing close to three quarters of the recorded music market (excluding expanded rights), there is clearly an overriding incentive to fix the problem. Simply throwing in the towel and waiting for whatever comes next would hurt both creators and rightsholders. The challenges come from all directions and with different causes (major rightsholders feeling investor pressure; artists struggling to cut through the clutter; royalties not adding up for too many professional artists; music becoming commodified). But the problem is that the people underpinning the entire edifice – consumers – do not have a problem. And that is what needs most attention. 

When Spotify first arrived in the market 16 years ago, it was little more than a vast catalogue of music with a search box. If you didn’t know much about music, you weren’t going to get much out of it. Thus, the first wave of adopters were music aficionados, hastening the demise of downloads, where many were currently spending their money. Fast forward to today, Spotify – and other streaming services – are a dramatically different value proposition, catering not just to those aficionados (or superfans), but also for the passive massive that upgraded from radio and the occasional purchase. Converting so many passives into subscribers was one of streaming’s most important achievements. However, because there are so many more of them than aficionados (six times more in fact), it is only natural that streaming’s UX has prioritised their needs. This, in turn, has helped hasten the commodification of music. 

The great economic paradox of streaming is that it does not differentiate between aficionados and passives, charging them the same fee for the same product. Little wonder then, that aficionados have shifted their extra spend to live and merch. If the supremium tier does eventually make it to market, it will go some way to addressing this. But it will not be enough on its own – and may well come across as an unusual and out of place appendage to the standard streaming proposition. What’s more, there are signs that Gen Z are not warming to streaming like they should be, with 16-19 penetration growing FAR more slowly than other age groups. What links these two challenges is the fundamentally flat nature of Western streaming UX. That needs to change.

So much of streaming’s success was built on the digital era’s superpower: convenience. Yet it is that very thing that has driven cultural commodification. While convenience may have disrupted the economics of things like taxis, online shopping and food delivery, it has undoubtedly improved the experience. Rides have got better; home delivery has got better. With music however, convenience has improved the experience for some (passives) but lessened it for others (aficionados). Fandom did not catch the streaming bus. To address this, streaming UX needs to change.

The case for friction

As counter intuitive as it may sound, streaming has become too convenient. It needs some friction. Friction is not inherently a bad thing. Done right, it can lead to a sense of satisfaction and personal reward. Think about where friction-with-reward exists in our life: learning a new skill, fitness training, reading a long book. The games industry even turned friction into a product.

Music discovery used to be a high-friction experience. Fans would trawl through (often pompous) music reviews, tune into their favourite DJ’s radio show on a late weeknight, and / or wade through endless shelves of albums in stores, perhaps being fortunate to get a surreptitious recommendation from the person behind the till. Many would say it is entirely a good thing that those are the features of a bygone era (though obviously not music journalists and record shop owners). But as is so often the case, it is the generation that comes after the first wave of adopters that can see what is missing from the new era. This is why, with streaming personalisation better than it has ever been, waves of Gen Z are busy crate digging in record shops. The sense of personal reward they get from finding a gem is simply not paralleled by streaming.

Streaming UX needs to learn how to introduce friction, but crucially only for those who want it, when they want it. The majority of people – even aficionados – want a friction-free experience most of the time. The opportunity is to create invitations to do more. The music industry bemoans the shift from lean in to lean back. Now is the time for dive in.

Crucially, this needs tying to identity, because that is central to the reward. For example, when someone spends time doing whatever the streaming equivalent of crate digging might be, they get a ‘hidden gem’ badge which goes on their profile page (it is perplexing that we still don’t have public user profile pages on streaming). Much as I am loathe to use the G word, gamification will be part of the equation. Music is meant to be entertainment. Listening to a work out playlist in the gym or a lo-fi study playlist is not entertainment, that is distraction. 

Bringing back friction will not solve all of streaming’s problems. No single thing will, but it will finally start to push back against the overwhelming trend of flattening. A whole slate of interconnected solutions will be needed for streaming’s other problems. The good news is that MIDiA is currently working on a major new report that will propose just that. The humbly titled ‘Future of streaming’ report will be arriving in the coming months. Watch this space!

We are pleased to announce the release of MIDiA’s annual music forecasts report. This is always a labour of love and takes a bit longer than some other entities’ forecasts as our approach is more Etsy than Amazon, with every single line of data (and there are thousands of them) being hand crafted, individually stress tested and cross checked. 

It might not be a very scalable approach, but as so many stakeholders in the music business rely on our numbers for business and investment strategy, it is a responsibility we take very seriously. As tempting as it would be just to say ‘CAGR is…’ and populate across the 39 different markets, we know from experience that short cut approaches almost always result in short comings. Perhaps most important of all is the thinking and industry expertise that goes into the numbers. There are no facts about the future, so forecasts are always a mathematical representation of human thought (and, no, I am not opening the AI can of worms). MIDiA clients can get the full 83-page report and 50+ sheet Excel here. Here are some highlights.

First off, the big number: by 2032, global recorded music revenues will be $110.8 billion. This figure is retail terms (i.e., includes DSP / retailer and publishing revenues) and includes:

• Traditional revenues (streaming, downloads, physical, performance, sync)
• Non-DSP streaming (TikTok, etc.)
• Expanded Rights (labels’ share of live, merch, branding, etc.)
• Label licensing revenue for audio visual content (documentaries, biopics, etc.)
• Production music
• Full representation of the long tail of independent artists and labels

That is the maximalist view. The more minimalist view (label revenues excluding Expanded Rights) sees 2032 revenues reach $51.2 billion.

After something of a boom year in 2023, revenue growth slowed to 4.3% in 2024. In fact, 2024 continued an oscillating growth pattern we have seen all decade, with strong growth years followed by weaker ones. The years with weaker growth coincided with declines in physical and (most often) weaker streaming growth. While this gives physical a kingmaker status, it also reflects maturing streaming growth: when the main revenue source grows at more modest rates, shifts in smaller revenue sources is the difference between strong and weaker growth.

We titled this year’s report ‘Recalibration’ as everything points in this direction:

New growth dynamics: Oscillation and slowing streaming are the new growth framework for the global market

• Clear shift away from the West: Close to four firths of subscriber growth came from non-Western markets and China became the world’s fourth largest recorded music market. We titled last year’s report ‘Rise of the Global South’. This is the market’s new reality. Which helps explain why so many Western rightsholders are snapping up Global South repertoire and rightsholders. Will catalogue investors follow suit?
  
• New DSP power dynamics: DSPs are growing influence and power, as reflected the ‘bundles’ licensing discounts. Labels got their ‘artist centric’ licensing in return but the long-term implication is DSPs have the precedent of reducing the royalty pot
  
• New outlook for ad supported streaming: Revenue was flat in 2024. Part of this was actually a good news story (more music videos being monetised in the higher value confines of YouTube Premium). Part of it was another reflection of DSP power, with advertisers increasingly opting for the better targeting of podcast inventory versus music
  
• Rapid rise of AI: While rightsholders were locked in legal battles, the marketplace has become awash with generative AI companies and this music is flooding DSPs. While some of these companies are seeking to operate ethically and in partnership with rightsholders, many are pursuing the ’do first, ask forgiveness later’ approach that served earlier disruptors like YouTube and TikTok so well

As you can imagine, with an 83-page report, this is but a tiny taster of the report, but hopefully it has given you a sense of the macro dynamics at play in today’s and tomorrow’s music business. If you want to go a little deeper still, keep an eye out for an exclusive video of the report’s analysts talking through some more of our thinking and numbers. In the meantime, if you are a client, you can find the report here.

In a brutally simplified view of the past, the recorded music industry had two lanes: retail and radio. Piracy killed retail. Streaming killed piracy, then went on to, if not kill, then seriously maim radio. The two lanes converged into one – reverse bifurcation. 

At first, it was all upside: the consumers that retail had lost began spending on subscriptions, and audiences migrated from lower-paying broadcast radio to higher-paying streaming. However, artists and songwriters then became unhappy with per stream rates, contextualising them against retail rather than radio. Meanwhile, record labels realised they had inadvertently capped the spending of people who in previous generations had been high spending superfans. This is the problem with squeezing two highly distinct models aimed at serving opposite ends of the music aficionado / passive massive spectrum into one space. In the growth phase – when everyone was waiting for the bright future – it felt like a best of worlds. When growth slowed, however, and everyone realised how things are now is how things will always be, it began to look like an unsatisfactory compromise that delivered the best of neither. 

If streaming was only benchmarked against radio, in rightsholder remuneration terms, it would be an undisputed success. However, because rightsholders and creators alike also depend upon it for the income stream retail used to represent, critiques and criticisms have become part of streaming’s narrative. For the majority of mid-tail artists, streaming is in many respects like radio was 15 years ago. It is a badge of success, but you have little idea who listened – or any means of connecting with them. It sets up other income streams (live, sync, merch, etc), generates income (decent, but not enough to live on), and it builds audiences rather than fanbases.

Supremium: Can streaming monetise fandom?

Enter stage left supremium. The concept is logical: tap the latent spend of superfans by delivering them scarce and high value experiences and content from their favourite artists in the app where they do their music listening. The problem is that this might not be the best place to tap fandom. Streaming has made music listening more passive with playlists, stations, and other forms of algorithmic programming. Streaming took the price point from retail but the format from radio.

The risk with fitting a superfan product into streaming is that it commodifies and generalises fandom in the same way it has music. Music might be always on, but except for a small niche of obsessives, fandom is not always on for most people. Most people are fans of multiple artists and do not listen to them all the time. As our superfan report found, many do not even listen regularly to those they consider themselves fans of the most. Social has already done its bit to commodify fandom, compelling creators to become content factories to meet the algorithm’s insatiable appetite and not be forgotten by it. Social is free and so commodification is tolerated. The premise of supremium is premium scarcity – but in an always on, on-demand environment, users will expect something much more frequent than occasional. By making scarcity frequent, it will lose its specialness and, well, scarcity. Sometimes it is better to give people what they need rather than what they want, or in this instance give them less when they think they want more.

Music listening is like breakfast, you eat every day and generally do not put too much store by it. Fandom is like eating out at a fancy restaurant – something you typically do infrequently and make an occasion of. Think about the attention you pay to an artists’ YouTube notification versus their Instagram notification. The former is likely infrequent and so you pay more attention to it, the latter is ‘great, yet another notification’.

The future of music fandom

Digital fandom products can absolutely work (as long as the expectation is to convert superfans, not suddenly turn the passive massive into superfans). In MIDiA’s recent streaming pricing study, in fact, many subscribers showed willingness to convert to a tier unlocking ‘superfan’ features. However, it will be difficult for streaming to design a product that works for those it is intended to serve. It means building a mass-market, one-size offering for a consumer segment that is inherently niche and diverse. It also means that the more consumers who sign up, the less “exclusive” and scarce the subscription becomes – and therefore, success ironically breeds failure. Fandom products may need to be somewhere else to fulfil their potential. That might mean standalone apps, but we have had a good few years of fan apps trying to make 

headway and realising that consumers already have more apps than they want. 

So, the challenge is to work out where fandom products should live (and what they should be, if not the traditional retail offerings). Social platforms would be an even poorer choice. This leaves the Bifurcation go-tos of YouTube, SoundCloud, and Twitch – each of which has respective strengths and weaknesses. 

The hard truth is that there probably is no ideal location for digital fandom products right now, but streaming is probably not the right place either. Artists and labels alike need a successor to retail. This does not necessarily have to actually be retail (e.g., Bandcamp) but it does need to be somewhere where people can be fans as frequently or infrequently as they like, converse with likeminded others, express themselves, and spend on their favourite artists, whether that be actual products or digital items.  Social platforms may enable the former behaviours, but are far less efficient when it comes to the latter (spend), at least for music. Streaming may well have taken the retail part of its equation as far as it can. Now is the time for something else to grab that baton and run with it.

AI is transforming culture, entertainment, business, and society at a pace unprecedented in the digital era. Unlike previous tech, AI is evolving at the speed of computing, not the speed of the human brain. While some disillusionment with AI will inevitably follow, it is likely to be shallow and short lived. Meanwhile, entertainment business and culture will have been turned upside down. 

Building on MIDiA’s already-extensive body of AI analysis, we have just released our biggest and most comprehensive report yet. The report provides an exhaustive view of where AI is at right now, where it is heading, and how entertainment companies need to respond and adapt. With more than a hundred companies and brands referenced, nearly 30 pages of analysis, new data, workflow analyses, and scenario mapping, if you are in entertainment or the creator economy, this report is a must read. The report is immediately available to MIDiA clients.

Here are a few highlights…

The early buzz around AI has focused on what it can make rather than what it can do. The simple fact is, it is easier to gauge the potentially transformational impact of something by seeing or hearing what it does than by thinking about how it might change processes and workflows. Yet, it is the latter that we should pay most attention to – and this is where AI’s most important work will be done.

AI will reshape entertainment from three directions:

1. Creators using AI
2. Consumers using AI
3. Companies using AI

AI alone will not drive change and disruption to entertainment – it needs consumers, creators, and companies to use it. While the first wave of AI hype focused on creation, creators’ primary needs lie in their wider workflows, and the AI vendor landscape is evolving to meet this wide array of needs. The following are key workflow focuses:

●  Inspiration (e.g., Songstarter, CoSo, vidIQ) 

●  Creative co-pilot (e.g., CoPilot, Descript, CoProducer)

●  End-to-end creation (e.g., LTX Studio, Mubert)

●  Final touches (e.g., LANDR, Captions AI, Resound.fm)

●  Workflow(e.g., Podcastle, COSMOS, Dream Screen)

●  Career (e.g., MNGRS.AI, Replo, Albert)

While creators are leaning into workflow tools, consumers are engaging en masse with utility and creation tools. While much of this leans towards functional creation (writing cover letters, writing college papers, etc.) AI is also presenting wider creative opportunities to consumers, and this behaviour will grow. Rather than a blurred line between creator and audience, the overlap is more like a segment of a Venn diagram. AI will result in more consumers creating – not just for the results, but because creation will become a form of entertainment in its own right. 

Entertainment companies are adopting AI at pace too, integrating it across their workflows, from sourcing content through to royalties and reporting. The most interesting area to keep an eye on is entertainment companies using AI to stamp their visual or sonic identity on their releases and output and using AI to identify talent before it is talent. In other words, the top of the funnel is going to start outside the funnel!

It is becoming clear that, unless specific lanes are built for it, AI will encroach upon everything. There is a growing body of thinking about how to compete against AI, but the harsh reality is AI can compete with everything where it can exist, and we are going to reach a point where it is hard to distinguish between “AI” and “non-AI” content. It is the platforms, therefore, that must actively build walls around AI.

This is just a high level overview of the report. There are lots (and I mean, lots) of interesting reads about AI at the moment – but, this is not only an interesting read, it is a necessary read! 

If you are not yet a MIDiA client and would like find out more about the report, email businessdevelopment@midiaresearch.com 

Throughout the 20th century, particularly the second half, many Western countries – such as the US, UK, and France – increased their global influence through the use of cultural soft power. This was done through tools like Voice of America and the BBC World Service, as well as via movies, TV, journalism, and music. The oft-discussed ‘globalisation’ of culture was, more accurately, a westernisation of global culture. With local-language entertainment growing more popular, audiences fragmenting, and ongoing budget cuts to the World Service as well as (to put it diplomatically) an uncertain future for Radio Free America, the soft power era may appear to be over. It is not. 

Just as the much-heralded end-of-the-gatekeepers was in fact a replacement of human tastemakers with algorithmic ones, so too the human soft power era has been replaced by an algorithmic one. Over the course of the last decade, American tech companies have assumed a dominant cultural and social role in the lives of consumers across the globe. In doing so, the corporate ideologies of these companies (manifested in their algorithms and strategies) now shape the way the world sees itself, just as – if not more than – traditional soft power strategies did. Most pertinently for entertainment, these companies have collectively formulated a new set of rules for cultural success, that stack the deck so that the house always wins.

The leaders of these companies and their investors often have firmly held political beliefs. They often see the companies as tools for furthering their views and agendas – even if those agendas are to manufacture new problems to sell solutions to (which, of course, is part of why the US is so concerned about TikTok). While the old soft power era aimed to propagate (at least in theory) the cultural and political views of entire nations, US tech soft power furthers the worldview of one particular slice of US society.

Sometimes this is done out in the open (e.g., Elon Musk / X) but most often, the implementation is subtler. Because the inner workings of algorithms are closely guarded corporate secrets, not even governments, let alone consumers, are privy to how they are influencing thinking, beliefs, and behaviour. This is unaccountable, social engineering on a literally global scale. The geo-political and social implications are vast, but the impact on entertainment and culture is also profound.

When you are in the midst of change, it can sometimes be hard to understand just how dramatic and significant it actually is. The numbers alone show just how much the influence of US tech companies has increased over the last ten years.

In that time, streaming has come to dominate music and TV revenues, while social has simultaneously given birth to the creator economy and become the collective gatekeeper for entertainment discovery, with often less-than-satisfactory results. It is social’s role that is the most far reaching and that entertainment companies and creators are least able to influence. The result is that entertainment industries have become governed by a new set of rules that they did not write:

Make more content, more quickly

Try fast, fail fast

Chase virality, not longevity

Bring value to ‘discovery’ platforms but extract little or no value in return

Compete with everything and everyone for attention

Accept toxicity as a cost of doing business

What these rules have in common is that the outcomes benefit the platforms more than they do creators and rightsholders. Social and streaming platforms have an insatiable appetite for content, and the burden for meeting that falls on creators and rightsholders. But this appetite is not some unintended consequence, it has been engineered by the platforms in order to meet and increase demand of their users. Pouring gasoline on the viral fire might burn bright, but once the initial flames die down, they often leave behind nothing but scorched earth.

Meanwhile, entertainment companies have been forced to re-engineer their businesses to abide by these new rules. And there are few among them that would argue that the outcome is positive, with a recent quote from WMG’s Elliot Grainge a case in point:

“The whole point of the algorithm is to feed you content that triggers a dopamine response in your brain. It can be really negative and addicting… Those who truly succeed aren’t the loudest; they’re the ones with their heads down, grinding, unsure if it will even work, but going for it anyway… Don’t take the bait and fall for it.”

AI looks set to knock everything up a notch, not least because some of the investors behind the AI companies favour dramatic copyright reform, in some cases even seeing it simply as a hindrance to tech’s future. If you want to take a conspiracy theory approach, you could make the case that one of the reasons the big AI companies have received such massive levels of investment is to provide war chests for fighting precedent-setting copyright cases that will further the ideological ambitions of their investor backers.

So, what can be done? There are two alternatives:

1.    Continue as we are, with tomorrow becoming an even more intense version of today

2.    Begin plotting a different path

Few would want the first option, but the second could seem like a Herculean task. Yet, it might just be that a window of opportunity has presented itself in the shape of the new US tariff regime. More on that in my next blog post!