Chartmetric Analyses Playlists To Understand Power of Major & Indie Catalogs in Spotify
With the shape of the music industry changing fast, Chartmetric has done a study to answer a striking question: How powerful are the major labels, really? What they found poses an intriguing vision of the future.
Why it matters: Chartmetric set out to analyze the relative power of major and indie labels in the streaming era. Their research centers on the increasingly powerful recommendations made by streamers like Spotify – since recommendation algorithms have become key players in music consumption and discovery. These algorithms are powerful tools people have come to trust, Chartmetric notes, but there is not much transparency into how they work … or how fair they are.
Let's talk numbers: The team looked at a huge data set of over 6,000 Spotify playlists representing two years of recommendations in every conceivable genre, from massive ones like classic rock to the smallest niches. Each track included a popularity score and label affiliation.
Looking at the top 500 genres, the major labels’ share “declined as we moved from broad tags of pop and hip hop into the niche spaces.” For the top 10, the average major label share was about 48%. By the time you reach No. 100, it’s down to about 25%. Many estimates of the recorded music market as a whole put the majors’ share at around 70-75%, but that that appears to only hold true for the largest genres on Spotify.
Genre’s with biggest major label share:
Classic rock (77%)
Mellow gold (79%)
Permanent wave (73%)
New wave (60%)
Hip pop (68%)
The researches note that all of these “genres” are rooted in the pre-streaming era.
Genre’s with lowest major label share:
EDM (27.5%)
Underground hip hop (10%)
Viral rap (19%)
The data also showed major label dominance slipping, dropping about 3 percent in the two years studied.
What they’re saying: “To sum up, our analysis … has revealed that, on average, the Spotify genre niches tend to be driven by the independent catalog. The share of major-affiliated tracks has sharply decreased as we moved away from the most popular genres, such as pop, and into more granular niches. Further, we found that most major-heavy niches on Spotify were connected to the “old” music industry: genres like mellow gold and classic rock, that cemented their sound back in the 20th century when the recording market was much more centralized. …
“The reason majors still hold such a vast share of the music market is not only their marketing budgets and leverage. As our analysis showcased, big independents can compete on par—or even outweigh—the majors across many genre niches. A critical component of the major's competitive advantage is the evergreen catalogs held by the big three—and the "passive" market share that comes with it. However, if we move away from these "golden" genres, independent players will often carry more power than the majors.”