Disparity Between Indie Music and Superstar Concert Revenue

Lesser known musicians and indie bands can find an audience today with the help of online services such as Pandora, Spotify and iTunes, while leveraging the marketing power of social networks including Twitter and Facebook. Yet this disruption to music distribution and promotion does not hold true of live performances. Big name music acts continue to dominate while niche, indie acts receive a very small share of concert revenue.

With CD sales declining — and the growth of digital piracy and low cost digital downloads — concerts are becoming a final frontier for significant profit. Independent artists may be further pressured as they have less resources for large concerts or lengthy tours.

Princeton economist Alan Krueger notes that the top 1 percent of music artists accounted for 56 percent of profits in 2003, and slightly more with 56.3 percent in 2013. “I see no evidence that it has become less of a superstar economy since I last published on it,” Krueger says. “I thought the fact that prices for the top acts had continued to grow very quickly supported the idea that inequality hadn’t fallen.”

“Basically, the music business has been hugely disrupted by the Internet… Radio play matters much less, the audience has fractured, performers can build a following on Pandora and YouTube,” fellow Princeton economist Paul Krugman writes in The New York Times. He also questions whether new technologies will eventually lead to the concert business experiencing its own disruption.

Music superstars continue their domination through the same trends that help niche indie bands. Technology and globalization are some of the causes of the disparity, according to Krueger. Indie music is global and easily distributable either by piracy or digital downloads and social media, while big music names must rely more on concerts to make up losses due to that piracy and cheap downloads.

In determining concert data, some have questioned whether Pollster, a tracking firm, is accurately reporting a disparity. Despite this, indie bands may have to adopt paid live streaming, and have more stake in concert revenue to close that disparity, suggests Wired.