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Since the rise of Napster, the recorded-music industry’s financial health has been tied, for better or worse, to technological change. Even with an upturn in fortunes this past decade, new insights from its global lobbying group Thursday show that the industry is still struggling to define what success looks like.

The industry has spent the past quarter-century fighting numerous battles – first against music piracy, then convincing people to pay for streaming services such as Spotify and Apple Music, then finding ways to work with ad-supported services such as YouTube in a way that made financial sense. For the past nine years, those streamers have pushed the industry back into revenue growth, boosted even further for a couple years by COVID-19 pandemic stay-at-home orders.

Every spring, the Big Three record labels — Universal, Sony and Warner — and prominent independents gather together to discuss the state of the music industry when their lobbying group, the International Federation of the Phonographic Industry, puts out its annual Global Music Report.

Released Thursday, this year’s headline numbers look similar to the last nine years’, with revenue going up – at 10.2 per cent worldwide and 12.2 per cent in Canada – as the lobby group celebrated the success of artists such as Miley Cyrus, the Nigerian musician Rema and the Korean boy-band Seventeen. But the growth came against a backdrop of layoffs across the major-label system, and comments from executives Thursday about pushing deeper into emerging markets and how to find even more ways to squeeze revenue from listeners. Those are traditional signals of an industry trying to keep shareholders’ attention after a period of easier growth.

“It’s great that there is an openness and a focus now on growing average revenue per consumer, especially as markets mature,” said Dennis Kooker, Sony Music Entertainment’s global digital-business president, in a media briefing discussing the report. But he added that short-form video services such as TikTok, which has become a dominant player in music discovery and promotion, should find better ways to compensate artists who soundtrack all those videos.

TikTok is in a standoff with the world’s biggest label, Universal Music Group, over artist compensation, keeping artists including Drake and Taylor Swift off the massively popular platform. Meanwhile, generative artificial-intelligence technology threatens the very value of creative expression, with everything from guitar tone to vocal inflections can be emulated by AI.

And the label system’s clients, particularly everyday working musicians, are still struggling to get by. The shift from high-margin CDs to downloads to streaming left their compensation in the lurch, with artists only getting fractions of a cent per stream. Adding in the surging costs of touring, it is very often a struggle for new and even mid-career artists to make a living.

Subscription streaming services accounted for 49.8 per cent of the global industry’s US$28.6-billion in revenues, the IFPI said Thursday, with 667 million paid streaming accounts worldwide. Ad-supported streams generated 18.5 per cent of this revenue. Interest in CDs and vinyl, particularly in physical-media-loving Asia, accounted for 17.8 per cent.

The IFPI’s affiliated Canadian record-industry group, Music Canada, said that the music market had grown here to US$659.6-million, largely driven by subscription streaming.

“That Canadians love legal, licensed, high-quality music is fantastic – because there was a time when it seemed like all music was free, and not just the industry was hurt, but artists were devastated,” said Patrick Rogers, Music Canada’s chief executive officer, in a phone interview Thursday from Halifax ahead of this year’s Juno Awards.

Record labels these days see themselves differently than in the past. “Historically, an artist went to a record company because we had access to retail and we had access to media; now anybody can do that,” said Konrad von Löhneysen, the founder of the independent Berlin label Embassy of Music, on the media call. These days, “our role is more like the role of a gallery: we display art, and we have to make sure that people come and visit our gallery, and they see how great the art is.”

This means finding new ways for artists to stand out in an increasingly crowded field, with a greater emphasis on marketing. “Getting your release into the market isn’t a challenge anymore – it’s getting the attention once it’s in the market,” said Marie-Anne Robert, managing director of Sony Music Entertainment France.

That attention can be skewed by people or companies trying to manipulate how much some tracks are listened to on streaming services. Recorded-music organizations are taking aim at the perpetrators.

Last week, the IFPI and Music Canada announced that it had filed a complaint with the Competition Bureau of Canada that led to the shutdown of nine connected “streaming manipulation” websites based in the country.

Music Canada’s Rogers said that the “pay-for-play” sites took payments from musicians to boost their streaming numbers – which not only eats into the broader revenue pool from streaming services, but can also boost how often songs are algorithmically played to some users.

“The competition bureau is worried about the distortion of markets, and that is, by definition, what streaming manipulation is,” Rogers said. “Every fake stream means some amount of money less for every real stream.”

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