Record labels keep their heads above water as streaming becomes a tide

Global Business

Record labels keep their heads above water as streaming becomes a tide

The South By Southwest (SXSW) festival underway in Austin, Texas brings together music fans and bands from across the world.

And it’s the smaller record labels that often give the most promising bands the platform to be discovered by those fans.

But as streaming services bring artists and their listeners ever closer together, what kind of future do independent labels have?

CGTN’s Owen Fairclough reports.

Blushing and their layered guitar sounds were born and bred in Austin, the Texas home of SXSW and one of this year’s headliners.  The band comprises two couples with a shared love of guitar-drenched music – and a healthy self-regard for band dynamics.

“Well, you’re going to have go into the bedroom with this person and sit and watch TV after band practices,” Michelle Soto, guitarist and vocalist said before Blushing play one of multiple shows during SXSW.

“So you want to make sure you don’t express your opinions too harshly but yes, I think being with your spouse in the band you’re allowed to be a little bit more vocal with your opinions in a frank way.”

SXSW is an opportunity for bands like Blushing to reap the commercial rewards of global attention. 

But streaming services have upended the business model for the music industry, with Spotify and China’s Tencent Music now multi-billion dollar publicly traded companies. Streaming accounted for three-quarters of U..S music industry revenue last year. And Spotify has such reach it can offer bands the opportunity to sign with them directly and cut out the label – which would take a slice of royalties. 

So would direct streaming better serve Blushing than looking for a label to release their debut album?

Christina Carmona, Blushing’s lead singer, said “What it comes down to is money. There’s a big difference in money. I love Spotify, I’m a big Spotify user, I love it, I love to stream music. But as an artist that’s not how we make our money in order to fund band things.”

“We actually make a good amount of our money playing shows, playing live. We’re lucky to be able to do that – I know it’s not the case for a lot of bands but a good majority comes from merch, selling T-shirts and things like that. So Spotify is definitely not paying the bills,” Michelle added.

And while streaming is dominant, physical CDs and vinyl LPs generate slightly more revenue than digital downloads. That’s an opportunity for smaller labels such as Austin Town Records, responsible for Blushing’s early releases, to cater to the demand for physical products.

Owner Nathan Lankford says: “Seeing the band happy, especially for a lot of Austin bands, when their parents come out, their friends come out, their boyfriends, whoever, and seeing the look o their faces when finally it’s out there and here’s what we’re giving to the world.”It’s a labor of love whose true value is perhaps best measured on the faces of the fans bobbing away as Blushing gives SXSW a powerful blast of homegrown talent.