It’s easy to perceive reporting on the music industry as restricted to celebrity gossip, tabloid speculations, artist interviews and album reviews. But the industry is a treasure trove of financial stakes and contractual drama that can come alive with the right business journalist at the wheel.
Let’s start by defining the scope of the music industry, which, contrary to Barbra Walters’ pop-culture-famous quotation, is not just Taylor Swift. According to EBSCO, an aggregator of scholarly databases, it’s “a multifaceted sector that encompasses a variety of businesses involved in the production, distribution, and performance of music.”
Notice the language: businesses, production, distribution. None of that has to do wholly with covering musical artists themselves, but rather the mechanisms that control the reach and financial success of their albums. This reframing puts the music industry squarely within the beat boundaries of a business reporter.
The big players to cover
Forget artists’ paychecks for a moment. Who makes and loses money in the music industry and why?
Let’s start with the songs themselves. When your favorite artist croons a catchy track over synths, the song itself is split into two copyrighted products: the master recording and the composition. The first is the audio file of that song recorded by that artist, like Whitney Houston singing “I Will Always Love You.” The second is the melody and the lyrics. In our example, Dolly Parton, the original songwriter, would own the composition rights.
In the music industry’s conglomerate reality, companies are typically the rights holders of both master recordings and compositions.
Universal Music Group (UMG) is the world’s largest music corporation, and it owns master recordings in addition to overseeing distribution, artists and marketing. Its Universal Music Publishing Group division owns composition rights and oversees licensing and royalties. UMG owns master recordings through its record labels such as Republic Records, Interscope and Motown.
This arrangement can sometimes lead to a situation where the rights holders of the master recording and the composition face conflicts of interest, even if the same company owns both. For instance, the producers of a highly anticipated film want to use a song for the soundtrack and approach Universal to get the rights. Universal Music Publishing Group wants to maximize royalty payments and boost publicity, so they’re eager to sign off, but the record label might think the asking price is too low for the use of the master recording and refuse the offer. The artist ends up losing out on the money.
You may hear more about record labels because they’re also the ones making the lion’s share of the money from streaming. Record labels first give a cash advance to the artist to record an album and then market it to the masses. In exchange, they take a big cut of the profits. In the streaming era, that means record labels are collecting the paychecks from Spotify and Apple Music and not relying on physical album sales in the same way they used to.
This leads to the next major player in the music industry: streaming services. Apple Music, Amazon Music, YouTube and Spotify have transformed the way we consume music and the way record labels and artists make money.
Since record labels are the ones collecting money from streaming platforms, artists often rely on live performances to increase their own revenue. Concerts are the greatest revenue source for artists. Ticketmaster, a subsidiary of Live Nation, manages and promotes concerts and has faced lawsuits for sky-high pricing that has frustrated fans trying to buy tickets.
Last but not least, business reporters should keep a close eye on private equity interests in music. Institutional giants like Blackstone have started turning prized music catalogs into asset-backed securities, calling the control of music rights a “fast-growing investable asset class” in a November 2024 press release.
An interesting angle to explore here could be if Blackstone is trying to monetize the name, image and likeness of beloved artists in addition to their songs. For instance, is Blackstone betting that it can sweat the song assets by putting them in Netflix shows and video games?
Resources to dig in deeper
Now that you have an idea of the contours of the music industry’s financial landscape, it’s time to figure out where to find more specific information.
Securities and Exchange Commission (SEC) filings are a great first step, since public companies listed in the United States are required to disclose financial statements there. While the Netherlands-based UMG has only submitted a draft registration with the SEC, its New York-based competitor Warner Music Group actively files 10-K annual reports, 10-Q quarterly reports and 8-K current reports. The 10-K will show risk factors, debt levels and lawsuits, if there have been any filed. Contract deals, like if the CEO suddenly quits or the company signs a massive deal, would be found in the 8-K.
The American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) also created a free and searchable database called Songview that tracks public performance rights ownership for music licensed in the United States. Here you’d be able to find who is making money when a song is played in restaurants and on the radio. The Mechanical Licensing Collective (MLC) provides a similar service but for tracking who is collecting royalties each time a song is streamed or downloaded.
Pollstar is a trade publication that offers the latest on ticket sales and tour finances, and Luminate powers the Billboard charts, but both require a subscription to access this level of analysis.
Now, when the next Taylor Swift album drops, you’ll be able to break through the media noise with original business reporting that shows the financial stakes of moving in the music industry.
