This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at www.capital.de. Like stern, Capital belongs to RTL Deutschland.
The German music industry passed on almost half of its income to its artists in 2022. Ten years ago it was only 21 percent. This is the result of a study by the Oxford Economics research institute on behalf of the Federal Association of the Music Industry (BVMI). The significant increase results from higher advances and license payments, which primarily consist of streaming income.
For years, a dispute has been raging between artists and major music companies such as Universal, Sony and Warner over an appropriate share of the revenue. With this data, the music industry wants to “objectify the discussion about the distribution of income in the music business,” said Florian Drücke, CEO of the music association, when presenting the study.
The common accusation is that the labels do not pass on the income from streaming sufficiently. And so ultimately a few superstars in particular become very rich, while lesser-known musicians hardly get any of the millions.
The German music industry is now trying to refute this criticism with new figures, according to which artists have benefited massively from the economic boom of the major labels. According to an Oxford Economics study, payments to artists have increased by 132 percent since 2010, while label revenues have only increased by 17 percent in the same period.
More crucially, payments per artist have also increased by 74 percent on average since 2011. The companies also invested a third of their revenue each year in developing and marketing new talent and new music. With a research and development rate of over 13 percent, the German music industry is even higher than the pharmaceutical industry. The study is based on surveys and data from the largest music labels in Germany, which make up around 66 percent of the market.
However, the study says nothing about how the profits are distributed among the artists and whether the higher payments have led to a more even distribution between the music creators. The majors don’t provide any information about this either.
In Germany, sales in the music market climbed by 6.3 percent to a total of 2.2 billion euros in 2023, the growth driver was the digital business with an increase of 7.9 percent. Sales of vinyl and CDs almost stagnated. Overall, music companies now make three quarters of their revenue from the streaming business. “Growth and economic success are the prerequisites for continuing to invest in young talent and supporting artists in developing their creativity,” said Frank Briegmann, Chairman