Effects of the Music Industry Oligarchy

As the music ecosystem continues to explode, there are now more record labels than ever before. Each of these record labels are created to satisfy certain niche demands within the music market. But above these labels reside the three major juggernauts that virtually control the entire market:

- Universal Music Group

- Warner Music Group

- Sony BMG

The “Big 3” are responsible for nearly 4/5 of the entire industry and that number continues to increase. With this much power and control, what exactly does this mean for the market?

The subsidiary labels within the music juggernauts can sign artists and make most of their own decisions, but the juggernauts still have the final say. Universal, Warner, and Sony control the budgets of essentially every subsidiary record company. This allows them to practically control the pay of artists and consumer prices, which could affect music consumption. Consequentially, this results in the music industry being described as an oligopoly market: a state of limited competition, in which a market is shared by a small number of producers or sellers. (Oxford Languages)

This can be damaging for artists as oligopoly markets present many challenges and disadvantages that should be taken into strict consideration:

- Less competition in the market can lead to raised prices and lower pay for employees, which can both decrease consumption levels by listeners.

- Artists face subpar contractual situations due to a lack of competitive record labels.

- The oligarchs can design difficult barriers to market entry, thus making it challenging for independent record labels to possess any substantial market share.

- Increased importance on “gatekeepers”. Gatekeepers are those who effectively control what music gets heard by the masses.

Each of these concerns can be detrimental to those underneath the hierarchy of the oligarchs. The powerful receive more power and the powerless lose power. How can this situation ever be combated?

Luckily, the continued maturity of technology allows for more independence within any market, especially music. Artists can reach virality without the help of any major corporation, entity, or organization. Artists can also enter the market with fewer barriers than ever before with the emergence of independent distribution companies. These two factors allow for a substantial tide shift in the market. Universal, Warner, and Sony still dominate nearly the entire musical pie, however, the underdogs have finally sensed their power. It will be excessively exciting to see a music revolution with the artists regaining control of their arts. Maybe we will soon witness the beginning of an inevitable power transfer.