The Modern Music Industry

The music industry is a driven by economics, technology, gatekeepers and the ever-evolving ways people discover and consume music. Understanding these features is crucial to understanding the music itself and its impact.

Labels, marketing and the pursuit of profit

Music content results from the collaboration between the music artist and businesspeople at record labels. The primary aim of the industry, particularly for record labels, is to market and sell products.[1] This often requires big marketing budgets, especially for established artists. Historically, the industry has been dominated by major labels with greater capital to develop and promote artists.[2] However, independent labels now hold a significant market share globally (46.7 percent in 2023) and are increasingly adopting the business practices of majors, sometimes becoming "hybrid labels," moving away from traditional cultural goals towards commercial viability.[3]

Historically, cultural gatekeepers like record labels, record stores, radio stations, video channels and music magazines filtered music supply. Artists had to pass through multiple layers to become stars, resulting in fewer but larger, more ubiquitous stars that were part of society's common musical vocabulary. Fans invested financially and emotionally in artists by buying expensive physical records.[4]

The digital revolution: From vinyl to streams

The digital age fundamentally altered the music industry's business model. The collapse of physical media sales, driven by file-sharing platforms like Napster, forced the industry to adapt. Streaming emerged as the dominant mode of consumption, making songs instantly available on demand.[5]

The economics of streaming are complex. Copyright holders (labels and publishers) are paid per stream. While streaming platforms like Spotify are pushed to hand over a large percentage of revenue (up to 70 percent), the per-stream payment is often negligible, especially for artists.[6] A significant issue is that a large proportion of songs on streaming platforms receive very few plays (nearly half of the 202 million songs available had 10 plays or fewer in 2024, and 87 percent had 1,000 or fewer plays), and some platforms like Spotify do not pay royalties for streams below a certain threshold (1,000 plays). This means the vast majority of music uploaded, particularly by independent artists, generates very little income.[7] Because Canadian content regulations don’t apply to streaming platforms, music by Canadian artists – especially francophones – is played much less often than on radio.[8]

Streaming also affects song length. Concise tracks are theorized to encourage repeat listens and are less likely to be skipped, which is important because platforms prioritize tracks with lower skip rates. Song snippets resonate with listeners used to short-form video apps. The average length of popular songs has been shrinking, falling significantly in the last couple of decades. While platforms like Spotify count 30 seconds of listening as a full play for royalty payouts, the influence of short-form video suggests song lengths may continue to shrink.[9]

The abundance of music available via streaming (over 100,000 new tracks daily from labels and individual musicians)[10] may contribute to a phenomenon where listeners, overwhelmed by choice, stick with familiar, tried-and-tested music. This could explain the dominance of a small number of current artists and the prevalence of "greatest hits" albums by "heritage" acts on charts.[11] At the same time, streaming and social media have led to a revival of genres not traditionally popular among young people, such as opera.[12]

The shift to digital production, recording on computers, has also changed how songs are written. For example, key changes have become far less common in popular music since 1990. Digital recording software's interface may encourage loop-based writing and more focus on vertical production elements than on traditional, linear song structures that often use key changes for intrigue.[13] The volume of AI-generated music is also growing rapidly on streaming services,[14] and there seems to be “a sizable audience of people who may not care whether the music they listen to is made by humans or machines.”[15]

Algorithms and new gatekeepers: The rise of TikTok and playlists

The digital age has introduced new gatekeepers and discovery mechanisms, most notably algorithms and curated playlists.[16] Spotify's playlists are created by individual users, Spotify employees or algorithms based on listening history.[17] Getting songs onto prominent editorial playlists is extremely valuable for record companies, so many employ strategies like having artists collaborate across genres to appear on more diverse playlists.[18]

Algorithms became central to Spotify relatively late, moving around 2014 from being essentially a virtual music store – that users were required to search based on artist, album or genre – to a curated music service.[19] While users can still search for specific songs, much of the appeal of the service comes from its playlists, which offer an experience closer to a radio station. Spotify offers three kinds of playlists: editorial, curated by Spotify employees or contractors (some of whom are well-known musicians or other music industry figures); listener, curated by users and then shared on the platform; and personalized, generated algorithmically.[20] Personalized playlists are created through several different algorithms which analyze both off-platform data – crawling the web to analyze writing about music – and the music on the platform itself, to find unidentified connections between songs. Similar association and classification algorithms analyze users' behaviour to determine their preferences.[21] Classification algorithms then combine the results of these to populate playlists, which are sorted by prioritization algorithms to place the most likely matches first.

The distinction between human and algorithmic curation isn’t as clear as it first appears, as this description of what happens when a song is added to the catalogue shows: "In the first week, it appears on a certain [human-curated] playlist; the position of a song depends on the curator's choices. In the meantime, the algorithm evaluates the song's performance based on a number of parameters, such as the number of plays, the number of skips received, the amount of plays completely finished, the time spent listening, [and] the amount of users that included the song among their favourites."[22]

TikTok, which relies even more heavily on algorithmic recommendation, has rapidly become an important music discovery tool and a key platform for music promotion. Its algorithm relies on user engagement signals (likes, comments, watch time) to personalize the "For You" feed, effectively homing in on users' "private desires". Unlike platforms like YouTube, TikTok's algorithm can make almost any creator's video go viral regardless of follower count, which empowers individual creators.[23]

TikTok works by allowing users to synch short pieces of songs to their own videos, which function as a kind of trailer for the song. This user-generated content is crucial; viral trajectories are often driven by creators' videos spreading song fragments. Viral moments on TikTok can revive older songs, turn previously unsuccessful tracks into global hits and launch new artists.[24]

Record labels are increasingly focused on generating viral moments on TikTok, sometimes manufacturing them through marketing stunts or using creators. Artists have expressed frustration with label pressure to create viral TikTok content, sometimes feeling forced to prioritize platform engagement over releasing music.[25] The platform allows for calculated "messiness" and the feeling of authenticity, though the line between genuine viral moments and manufactured ones is blurred.[26] Creators, including micro-influencers, can be paid significant sums to boost songs.[27]

Other streaming services are adopting TikTok-style short-snippet feeds to engage younger listeners who prefer active, social listening experiences: SoundCloud, Spotify, and YouTube Music have all introduced features resembling TikTok's feed.[28]

Thanks to social media, audiences not only listen to music, but interact with it: “a song's success now largely depends on how easy it is for people to develop their own content using it.”[29] Musicians rely more than ever on their most dedicated fans: one study found that just 2 percent of a performer’s fans are responsible for 18 percent of their streams and just over half of their merchandising sales.[30]

Many paths to music

Another increasingly common way that audiences discover new music is "syncs" – uses of music in film, television and video games. Syncs generate fees and provide promotional springboards. Thanks to global streaming, TV shows have unprecedented reach, making syncs in popular series incredibly powerful for reviving songs, as seen with Kate Bush's "Running Up That Hill" after its use in Stranger Things. Record companies coordinate marketing around major syncs, lobbying streaming services, though viral moments generated by show clips on platforms like TikTok add an unpredictable element.[31]

Video games are also a major outlet for music discovery, especially among kids and teens. Virtual concerts within games like Fortnite and Roblox attract millions of viewers and represent a new space for music.[32]

There is also some evidence of a revival of human curation. According to one survey, more than two-thirds of disk jockeys under 25 named “friends/word of mouth” as their preferred way of discovering music, ahead of just one in five who named TikTok and one in ten who named YouTube.[33]

[1] Wright, C. L., Dillman Carpentier, F., Ey, L. A., Hall, C., Hopper, K. M., & Warburton, W. (2019). Popular music media literacy: Recommendations for the education curriculum. Policy Insights from the Behavioral and Brain Sciences, 6(2), 186-193.

[2] Shuker, R. (2013) Understanding popular music culture. Routledge.

[3] People, G. (2024) Indies Own Nearly Half the Global Recorded Music Market. The Major Labels Aren’t Taking It Lying Down. Billboard.

[4] Cross, A. (2025) The state of mainstream music: They’re not making stars as big as they used to. Global News.

[5] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[6] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[7] Cross, A. (2025) The numbers for music in Canada for 2024 are in. What can we learn? Global News.

[8] Woolf, M. (2022) Canadian songs played far less often on streaming platforms than on radio, warns royalties body. The Globe and Mail.

[9] Leight, E. (2022) Here’s Why Shorter Songs Are Surging (And Why Some Welcome It). Billboard.

[10] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[11] Petridis, A. (2022) Has streaming made it harder to discover new music? The Guardian.

[12] Woodward, D. (2023) Gen Z and young millennials' surprising obsession. BBC News.

[13] Dalla Riva, C. (2022) The Death of the Key Change. Tedium.

[14] Robinson, K. (2025) Deezer Says Number of Fully-AI Generated Songs Delivered Daily Has Doubled Since January. Billboard.

[15] O’Donnell, J. (2025) AI is Coming for Music, Too. Technology Review.

[16] Petridis, A. (2022) Has streaming made it harder to discover new music? The Guardian.

[17] Petrusich, A. (2021) Genre is disappearing. What comes next? The New Yorker.

[18] Petridis, A. (2022) Has streaming made it harder to discover new music? The Guardian.

[19] Eriksson, M., Fleisher, R., Johansson, A., Snickars, P., & Vonderau, P. (2019). Spotify teardown: Inside the black box of streaming music. Cambridge, MA: MIT Press.

[20] Petrusich, A. (2021) Genre is Disappearing. What Comes Next? The New Yorker.

[21] Ciocca, S. (2017) How Does Spotify Know You So Well? Medium. Retrieved from https://medium.com/s/story/spotifys-discover-weekly-how-machine-learning-finds-your-new-music-19a41ab76efe

[22] Bonini, T., & Gandini, A. (2019). “First week is editorial, second week is algorithmic”: Platform gatekeepers and the platformization of music curation. Social Media+ Society, 5(4), 2056305119880006.

[23] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[24] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[25] Bereznak, A. (2019) Memes Are the New Pop Stars: How TikTok Became the Future of the Music Industry. The Ringer.

[26] Kornhaber, S. (2022) TikTok Killed the Video Star. The Atlantic.

[27] Seabrook, J. (2022) So you want to be a TikTok star. The New Yorker.

[28] Whateley, D. (2023) TikTok-style feeds are surging in music as streamers like Spotify and SoundCloud battle for young listeners. Business Insider.

[29] Weaver, J. (2022) Why Encanto's We Don't Talk About Bruno is dominating the charts. CBC News.

[30] Rys, D. (2023) Spotify Study on ‘Super Listeners’: Small Numbers of Fans Drive Big Streaming Numbers. Billboard.

[31] Forde, E. (2022) That syncing feeling: how Stranger Things supercharged the music industry. The Guardian.

[32] MacDonald, K. (2022) Video games introduced me to the Chemical Brothers - now teens find music through Fortnite. The Guardian.

[33] White, E. (2025) Gen Z’s College Radio Revival. Emily White Noise.