Keeping a Beat of the Australian Music Economy [Op-Ed]

Bigsound opened to its 21st year after a two year hiatus this September.

With over 180 artists, 154 speakers and brokers (including eight keynote speakers and four First Nations keynote speakers) across a jam packed three days, it’s fair to say the industry is still collectively catching its breath. 

Across the variety of different speakers, the topics discussed ranged from economic performance to audience consumption trends and habits, marketing and distribution strategies for artists, to social governance and improvements for the industry – and everything in between.

A lot has changed across the Australian music landscape in the 24 months between drinks, and it’d be a staggering feat to cover it all. Stimulus packages and lockdowns have come and gone (hopefully only for the latter), new trends for fans and artists have changed and shifted, and the value for music is reaching record highs. But despite the change and financial stimulus and growth across the industry, some challenges still remain. 

Navigating Change and Uncertainty

COVID-19 brought a lot of change and economic uncertainty across all industries. In a report published by PWC in early 2022, research found Australia’s live and recorded music market was worth about $1.1 billion to the Australian economy in 2020, a decline of nearly 39 percent on the previous year. Much of the decline in revenue could be attributed to the loss of live shows and tickets, as well as global commerce trying to rejig itself amidst Covid complications. 

However in 2021, the sector grew to a worth of $1.41 billion, with a forecast to recover to its pre-pandemic value by 2023. The increase of 2021’s revenue was formed largely on the back of digital contributions, and the expansion of the Digital Music Streaming sub sector. 

The report stated that the embrace of these technologies is not only supporting recovery, but it has formed the foundation for significant future growth in the industry, with total Listen revenue (inclusive of podcasts, radio, audiobooks and other media) forecast to reach $3.7 billion by 2026. 

Changing the Dial, Post Pandemic

Closer to the stereo, the Australian Recorded Industry Association (ARIA) reflected the consumption trends in its own financial release post pandemic. With the industry hitting a 15-year high in calendar 2021, posting wholesale sales figures showing a third consecutive year of growth and reaching their highest level since 2006. 

The figures released by ARIA boasted wholesale sales of $565.8 million in 2021, up 4.4% from $542 million in 2020 and up whopping 20.7% from $468.7 million in 2017. Total digital sales also reached $509.7 million in 2021 (forming 90% of all sales), compared with $368.1 million in 2017, showing the exponential growth and value in digital streaming. 

Interestingly enough, over the same period, physical music sales dropped from $100.5 million to $56.1 million with vinyl albums contributing the largest portion at $29.7 million, compared with $24.9 million for CD albums. 

Though this wax appetite isn’t just a domestic trend in the market. In their mid-year report, the RIAA’s 2021 figures show that vinyl accounted for 62% of all physical revenue in the US from January – June, making up $232 million of the period’s total $367 million sum. 

Assumptions for the increase in vinyls could be due to multiple factors at play in the industry. Smaller independent artists could be looking to sustain the money off the music they make while stage lights are off, while fans and audience members could be taking a more mindful approach to consuming music and supporting their favourite musicians. It’s all anecdotal and subjective, but the collective trend does suggest that the taste for vinyl is growing nonetheless.  

The Long Awaited Return To The Live Sector

While the Live Music sub-sector is not predicted to return to pre-pandemic levels until 2024, Australia’s live music revenue grew by a significant 97.4% year-on-year and is expected to grow by a 30.8% CAGR (Compound Annual Growth Rate) from 2021-2026 based on the mid-point forecast. To provide context to the numbers, this places Australia as the second fastest growing live music sub-sectors in the world.

But while the financial segments continue to grow and develop, the industry also faces increasing scrutiny by internal and external stakeholders. From an industry lens, ESG (Environmental, Social, Governance) considerations have also been further flagged in the wake of the pandemic, and the value Australians place on sustainability in music is at an all-time high too. 

Renewed Investment In A Sustainable Music Economy

Globally there’s been growing environmental and sustainability expectations being put on industry leaders like Sony Music, Warner Music and Universal Music. In December 2021, each label signed the Music Climate Pact, committing to targets aligned with the goals of the Paris Agreement. 

Pressure is at an all-time high for music corporations to formally report on and reduce their carbon footprint, and consumers and artists want the labels to be accountable. This also in turn also offers a fresh challenge to artists and manufacturers of vinyl alike if the consumption and production trends continue to grow, due to the carbon footprint of the vinyl trade.

From a governance and strategy perspective, contingencies and business continuity plans have been raised and flagged to support live music after two years of COVID closures. Live music and entertainment industry bodies including APRA AMCOS, ARIA, and PPCA called for an adoption of a government-backed insurance scheme in late 2021, designed to provide certainty for the Australian live music and entertainment sector.

In the lead-up to the 2022 Australian federal election, sixteen Australian music industry bodies representing an industry worth $16 billion a year to the digital, entertainment, hospitality and tourism economies came together to outline and pen a three-point plan for the federal government. 

The points included and centred around direct investment in the creation of great new Australian music, skills development, and global exports, incentivising the use of local content on streaming and broadcast platforms, insurance to provide certainty for local audiences and programs to build industry sustainability through strong intellectual property and national mentorship programs.

The plan also called for funding for industry support organisations, as well as assistance in addressing the findings and implementing the recommendations of the Music Industry Review into sexual harm, sexual harassment, and systemic discrimination.

The Urgency of Systemic And Cultural Change

Data presented at a roundtable held by the Queensland state government earlier this year, displayed a 30% increase in reports of sexual-based offences within or around licensed establishments, compared to 2016 sexual assault reporting is itself estimated to be under-reported by as much as 70%. Change in these cultures are being made through initiatives like the QMusic Safe Space initiative and the MATE bystander program to name a few, but there’s still a lot of ongoing improvements to be made.  

Cultural change has been a focal point across behaviours and practices within the music industry for many years, but has become more widely discussed in the last 2 years. With stories like the ABC’s 4 Corners reporting on Denis Handlin from Sony Records airing on August of 2021 or The Project’s report on May of 2021, there’s been a greater conversation around toxic behaviours. 

But barely scratching the surface with a few of the many events and changes across the country, the heart of the Australian music industry was beating as strong as ever at this year’s Bigsound. A multi capillary system that intersects and pulses into rhythm at all layers of government, enterprise, and institution. 

Beating from band rooms to boardrooms, from artists to audience, there’s more growth to come and challenges along with them, but there’s a collective optimism for the change the comes with it.

This feature has been published as part of The Music Writer’s Lab initiative, developed between MusicNT and Australia Council of The Arts. For more information, visit www.themusicwriterslab.com.