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What is the future of the music industry? A view from Finland

by Merja Hottinen

How do musicians and other music professionals in Finland view the future? The outlook for the music industry is sunny but not entirely without clouds, according to the recently conducted Music Industry Barometer study. Although professionals believe firmly in further growth, many are concerned about how current developments will affect their livelihood, particularly the digitisation of recording distribution and the tightening competition.

In spring 2019, Music Finland completed a survey among music professionals and corporations (meaning companies and associations) in Finland. The purpose of this Music Industry Barometer was to probe the feeling in the field concerning where the industry is at and where it is seen as going. The number of responses returned was 518, most of them from musicians and other music professionals.

The outlook was even more optimistic this time than in the first Music Industry Barometer conducted three years earlier. No fewer than 81% of all respondents believed that their personal or their corporation’s financial situation will remain stable or improve over the next three years. Belief in the growth of music consumption was also stronger now than three years earlier, with growth potential being seen in a number of areas.

The percentage of women out of all respondents was 28%, and the figure was not much higher in the areas with the highest percentage of women (classical and contemporary music) – about one third. Gender seems to have a bearing on the respondents’ outlook: women were in general more optimistic about their own operating potential and about the industry as a whole. Corporate respondents were more optimistic than individuals.

Potential for success seen in increasingly diverse areas

As in the previous Barometer, live music is the area where the most respondents considered growth to occur. However, its lead was not as overwhelming now as in the previous Barometer; many other areas have narrowed the gap, such as music synchronisation with films, TV ads and games, or online and application-based music services. Many respondents considered that cross-sector collaboration has the potential to generate growth, and wellbeing services were mentioned in many contexts.

“An album is an artwork. It is vital for performers to be able to produce a compilation showcasing their mental landscape, development, story and situation at that particular moment.”
A comment of one of the respondents

Despite the live music sector leading the field, many voiced doubts about whether live music can continue to provide sufficient employment for professionals. In general, new areas of activity seem to have a more hopeful outlook than the traditional areas. By contrast, some faith seems to have been restored in recording sales, for which the outlook is much more promising than it was three years ago.

The outlook for Finnish music exports is positive; more than half of the respondents considered that it will grow over the next three years. Respondents in pop and rock were particularly positive about the potential for internationalisation, while respondents in classical music saw the situation as stable.

Multiple futures

The future does not look the same for all genres, professional groups or operating environments. Though many of the projected future trends are the same across the board, there are also significant differences. For example, pop and rock respondents tended to be more optimistic on average than classical and contemporary respondents, who have a less favourable view, say, of the employment prospects in the music industry than everyone else. The well-established nature of structures in the classical music field is probably a contributing factor to professionals in this genre seeing the future as more stable than others.

The factors influencing outlook also vary widely from one area to another. All respondents considered personal attitudes to be important, but while the heavily institutionalised classical music genre frequently mentioned public funding, the more market-driven pop and rock genres – and the live music sector more generally – emphasised consumer habits. Classical respondents referred to the importance of education and training more often than others, while jazz and world music respondents saw the opportunities and problems in live performances as more important than others.

Genre differences were also apparent in that classical respondents considered that income from live performances increases with age; the opposite was the case with pop and rock respondents. Many noted that the ageing of the population may contribute to the genres of music favoured by older age groups becoming more popular. Many respondents expressed concern that it is difficult to get young people interested in live music.

Pros and cons of digital recording distribution

For all the aforementioned differences between genres, there was surprising uniformity in the answers to current questions in digital recording distribution. The Finnish music industry seems to be unanimously in favour of comprehensive metadata for streaming services and a user-centric revenue distribution model. Respondents also believe that the album concept still has a future, although more because of the artistic potential and career significance of albums rather than sales figures as such.

“The ad-funded model does not need to be abandoned if the royalties paid to creators are at the same reasonable level as those from the subscription programmes.”
A comment of one of the respondents

By contrast, opinions were sharply divided on the ad-funded ‘freemium’ model, reflecting the concern over the shift in revenue logic caused by the streaming market. Some consider that an ad-funded concept is good publicity for fee-paid services, while others fear that it simply makes consumers accustomed to getting music for free. Several respondents stressed that the important thing is to ensure that the creators of the music receive adequate compensation.

The responses also reflected the current issue in public debate concerning the ‘value gap’, i.e. the value of creative content being transferred to platform services instead of reverting to the original creators of the content. Respondents considered it important to amend the legislation governing digital music services so as to ensure that musicians and creators get their fair share of the revenue.

However, it was also noted that the initial chaos of digitisation is calming down and that digital channels have the positive effect of providing an accessible vehicle for gaining global exposure. YouTube and streaming are now considered the most important media, passing radio and TV, which were the leaders in this question in the previous Barometer.

More power to the strongest?

Tightening competition is a cause for concern in the Finnish music industry. Many musicians responding to the survey have noticed this personally in the form of smaller fees and fewer employment opportunities. Several respondents were concerned that in the current competitive environment large players seem to be doing better than ever while small and more marginal players are increasingly struggling to survive. That there is less room at the top than before is shown by the fact that several respondents noted that the media only focus on “a handful of artists”.

Amidst tightening competition, the issues seen as the most urgent included the social security of the self-employed and, in classical music, improved cooperation between freelancers and institutions.

The majority of respondents saw subsidies for non-profit concerts and clubs as a useful tool for ensuring variety and accessibility of live music. More generally, the ‘diverse undergrowth’ – a wider field of operators currently marginalised – was seen as a richness for the future of Finnish music, having the potential to bring new ideas into the music industry. 

"Large festivals are doing well. Small music clubs are struggling to survive.”
A comment of one of the respondents

The Music Industry Barometer 2019

  • This was the second Music Industry Barometer; the first one was published in 2016.
  • The Music Industry Barometer is based on a survey circulated by Music Finland in collaboration with Gramex, IndieCo, IFPI Finland, the Finnish Music Creators’ Association, the Finnish Music Publishers Association, the Finnish Musicians’ Union, the Society of Finnish Composers and the Finnish Composers’ Copyright Society TEOSTO.
  • The survey was an anonymous online survey in Finnish and English. It was targeted broadly at music professionals, particularly members and customers of Music Finland and its member organisations.
  • The total number of responses was 518, most of them from musicians (77%) but a large number also from composers (45%), arrangers (33%) and teachers (30%). Respondents were allowed to tick more than one box for their occupation. The largest groups of corporate respondents were music organisations and associations (14%), music events and festivals (13%), record labels (11%) and music publishers (11%). The genre distribution was 58% pop and rock, 47% classical and contemporary, and 34% jazz and world music. Respondents were allowed to tick more than one box for their genre.
  • The research was conducted and report written by Merja Hottinen from Music Finland.

Featured photo: Julius Töyrylä / Music Finland

Translation: Jaakko Mäntyjärvi