Quick Take: If We Are Moving from an Attention Economy to a Sentiment Economy, Is Music Still Undervalued?
Applying economics to music often invites groans from music fans, but here goes….
The recorded music market is currently worth $18.8 billion dollars a year, and thanks to streaming that number is growing. However, this number represents only the captured value of recorded music. Music sells tickets, clothes (although Urban Outfitters as a vinyl retailer might argue it is the other way around) and travel experiences. In fact, as music manager Troy Carter says, “Music sells everything, except music”. Streaming of course has punctured that quote somewhat, but it remains true that the $18.8 billion is a fraction of music’s role in the wider economy.
Which brings us to both big tech and finance’s interest in music copyright. As big tech becomes a platform business, media and – by proxy – music becomes a way to embellish its offering.
As MIDiA’s MD Mark Mulligan has opined, people don’t talk about what their gas bill is, and the social aspect of music is a USP that TikTok has in a brief period built its entire business on.
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As we reach peak attention however, whereby the volume of content now becomes overwhelming for an individual user, quality of attention becomes the goal of media companies. This means that metrics such as weekly average users (WAU) become anachronistic once an equilibrium is reached with other platform businesses; instead, you want users to have the long-term positive association within your platform rather than others.
The argument for music being undervalued therefore comes from the positive associations it elicits, especially within younger demographics who in marketing parlance have a longer LTV (lifetime value). The key takeaway is that while the internet was originally the music business’s undoing, its nascent economics may well extend beyond simply streaming and into a system that finally captures the wider economic value that music creates.