With the rise of digital distribution, the music industry and record business is entering a revolutionary time. There has been a shift from the traditional ‘DIY musician’ to the ascension of the refashioned ‘direct artist’ and independent record label.
There seems to be an infinite supply of music and content that is being consumed online, in part due to mobile phones becoming more accessible to the global consumer and companies like Create Music Group are fueling the revolution.
Supplying artists with the tools and technology to fulfill their biggest dreams. The digital powerhouse is best known for their groundbreaking work within EDM and bringing order to one of the most infringed on genres in the music industry.
This explosion of online music streaming and digital distribution has shifted the landscape to favor the independent artists and has — undoubtedly — changed what it means to be a self-releasing artist/independent record label.
London-based Midia Research has estimated that this trend has generated more than $643 million worldwide in 2018, amassed and gathered by digital distributors such as DistroKid, TuneCore, Ditto Music & CD Baby.
According to conservative calculations, the estimated $643 Million is only a piece of the pie. When you factor in the additional publishing and licensing, we’re easily looking at a billion-dollar pay day year-over-year — these are estimates that will only increase over time.
“We are entering potentially the most transformative era that the record business has ever seen.
The rise of ‘direct artist’ service companies, and a whole host of other commercial models, mean that [unsigned] artists have more choice and flexibility than ever before.
These artists can create their own virtual record label.”
— Midia Research MD Mark Mulligan.
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Capitalizing off of a global boom, online music streaming has afforded independent artists the opportunity to embrace life-changing arrangements without comprising future opportunities.
The rise of digital distribution has placed an emphasis back on infrastructure and artist development. This revolution within the music industry has created an ecosystem where independent artists can partner with the digital distributor of their choice.
‘Direct artists’ can now choose a path that best fits their idea of success, create a track record, build up leverage within an infrastructure and operate as an independent entity with the subsequent support of a record label.
The rise of online music streaming places a clear understanding on how success is defined for ‘DIY musicians’. Partnering with digital distribution companies like Create Music Group and Label Engine is becoming a very promising situation for content creators.
Creative freedom, worldwide distribution, marketing and promotion of music, brand development, retaining your masters, etc.
Lets go over some eye-popping statistics that paint a better picture of the state of online music streaming & digital distribution.
- TuneCore collected more than $500 million for independent artists within the 18 months to end of March 2019
- AWAL generated $59.9 million in the 12 months through June last year.
- CD Baby was acquired by Downtown Music Holdings, the parent company of “DIY Publishing” Songtrust as part of a $200 million deal.
- Spotify acquired a stake in Distrokid last October for an undisclosed sum.
- Bandcamp is now generating more than $8 million in sales every month.
- Warner launched Level Music, which distributes ‘direct artist’ music for no fee.
- Independent artists are becoming a true volume business, with DistroKid, CD Baby & TuneCore, CD Baby partnering with over 1 million artists.
Fred Davis, a partner at Raine Group, the powerhouse global investment bank that backs SoundCloud and independent artist distribution/label services startup Amuse, discusses the economic revolution in the music industry.
“The most exciting and fastest-growing sector to spring out of the music industry’s streaming revolution is the self-published artist.
The unsigned artist’s only lane to monetize their talent used to be through performing live, [but now] a thriving new sector has evolved that allows the self-published artist to support his or her craft.
It’s the most artist-friendly development in this entire global streaming revolution.”
Create Music Group & The Billion Dollar Baby
As with anything in business, you have to pay attention to actions, analyze trends, be in position to capitalize and Create Music Group is helping artists do just that.
“I think, for us, we just hit that perfect moment when streaming was actually paying out royalties significant enough to support artists, and we came in there and just took advantage of it on behalf of artists,”
The biggest growth driver in the music industry is online music streaming and Create Music Group has become a major player in helping artists collect revenue that is owed or that is generated from a number of DSPs (Digital Service Providers).
In 2018, the Recording Industry Association of America estimated that online music streaming generated $7.4 billion in revenue. Along with Tunecore and DistroKid, Create Music Group has grown into a heavyweight when it comes to collecting revenue for its artists.
The sheer volume of musicians that use Create Music Group’s platform speaks to the value that they are providing for content creators.
The company has grown at a rapid rate, going from an annual revenue of $133,000 in 2016 to $28 million in 2018. Create Music Group was featured as one of the top private companies in the state of California in 2020.
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Create Music Group essentially acts as a partner to artists and record labels. Acting as a buffer between DSPs and content creators, dealing with monetization, copyright claims and registering the appropriate ISRCs.
The services that Create Music Group provide for their artist is nothing short of brilliant. Providing a sense of clarity, the company carves out a number economic avenues that artist have overlooked.
Most artists in the music industry tend to not want to leave money on the table, especially when your are generating revenue worldwide. Following the recipe of; provide value and opportunity will follow.
Already involved in artist development, content creation and publishing. The company continues to add to their ecosystem. Staying true to its core product, the company continues to helps artists with:
- Mechanical collection through HFA
- Audio-fingerprints and Content ID monetization claims
- PRO registrations
At a certain point in your career, the risk you take by not properly setting up your digital distribution could add up to hundreds of thousands over a couple of years.
The dynamic being presented is this; the more you grow, the more you lose.
COO and co-founder, Alexandre Williams sat down with Michael St. James to discuss some of the pain points that are prevalent to independent artists.
When it comes to new artists, the biggest problem we see is that a lot of people don’t understand the publishing side of it.
Digital royalties, how they’re paid, what partners you have to upload information to, etc.
If you don’t understand it, you’re going to miss a lot of money. And it might not be that you’re getting screwed over, it’s just that you don’t understand all of the avenues you have to cover.
Even the ones that do go to music school don’t seem to understand that. If you don’t get it, you need to partner with someone who does.
Create Music Group is based in Hollywood, California and was founded in 2015. The company started out targeting middle market Electronic Dance Music artists. Initially, focusing their efforts on YouTube & SoundCloud. After a couple of months the duo had amassed around $250,000 in digital royalties for their clients.
This strategic move eventually lead to over $100 million in revenue being generated for artists and labels in 2019 alone. Create Music Group is now known as an ‘artist/label services provider’ with a specialty in forensic digital royalty collection.
They have worked with artists such as Marshmellow, Trippie Redd, The Migos, Future, Lil Yachty, Post Malone and Wiz Khalifa. Williams and Strauss continued to build by adding the distribution company, Label Engine, to the family. The distribution powerhouse claims to monetize more than 6 billion streams every month.
With the acquisition of Label Engine, Create Music Group has the ability to empower ‘direct artists’ through enabling them to distribute their music worldwide to over 100 streaming platforms.
Create Music Group has naturally evolved into a hybrid rights management/distribution/publishing company. The company has joined a number of other digital distributors who are focused on artist development and creating an ecosystem around their artists.
One major factor that places Create Music Group in a different arena is their technology — in conjunction — with the data that’s being produced on a daily basis.
The company has also developed an app called ‘Splits’ that lets you divide your revenue with the appropriate parties. As the focus around technology remains prevalent, Create Music Group is continuing to improve their artist portal by providing real-time data and developing a music licensing platform for video makers.
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Another plus of Create Music Group is that their artists receive royalty checks on a monthly basis vs. quarterly or semiannually (which is the norm) and payments for YouTube streams are sent out every 72 hours.
With data being a content creator’s biggest weapon. Musicians can log into their account and view data that is being updated daily to see what songs are being received well by listeners on Apple Music and Spotify.
Create Music Group also works with other distribution companies by providing its right management technology. So there’s no issue if you are interested in Create Music Group’s rights management services and want to partner with another digital distributor.
Data is the game, period. A lot of DSPs have data portals like Spotify Artist, etc., Kobalt does one too. We decided to do our artist portal with live, actionable info.
The big thing we noticed with our portal is when artists or management can see exactly what they are making every day, and where those numbers are coming from, they get really invested daily in what’s going on…
It’s really easy to see what’s working and where you should put your future efforts when you see it in real-time.
— CMG’s co-founder and COO, Alexandre Williams.
As of 2020, Create Music Group partners with more than 3,500 record labels and almost 70,000 artists. The company is now monetizing more than 12 billion monthly streams across all online music platforms.
With Spotify paying out $6,000 per 1 million stream. A large number of Create Music Group’s artists clear $10,000 a month, with the cream of the crop earning close to $100,000 on a monthly basis.
“At end of day, [success] depends on knowing how to work [these] platforms. You have to think about coordinating the type of content, the timing of the content, which territories to target.
[CMG] is giving artists another set of considerations when they think about how to roll out and exhibit their art to the public.”
— Aaron Rosenberg, partner at Myman Greenspan Fox Rosenberg Mobasser Younger & Light, a Los Angeles entertainment law firm, who represents a number of clients who use Create Music Group
With the focus now on artist development, publishing and brand building. Create Music Group has now began to sell advertising directly through its client’s YouTube videos.
“How do we build an ecosystem to make artists more money and as much money as possible creating an entire middle class for artists? That’s been our goal from the beginning.”
— Jonathan Strauss, CEO and co-founder, Create Music Group
Create Music Group is on pace to clear $10 million in revenue in 2020 and has already diversified from forensic royalty collection/rights management to distribution & publishing.
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“The real people that should be scared of us are the Viacoms of the world.
It’s cheaper for us to directly reach the people who stream this content.” — Jonathan Strauss