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The recommendation algorithms used by streaming services are the main reason why Australia\u2019s local artists are seeing a revenue decline, even though Australians themselves are spending more on music, a new report says.<\/p>\n
The report warns that other English-speaking countries \u2013 aside from the United States \u2013 are facing a similar problem.<\/p>\n
Australia\u2019s recorded music revenues grew by nearly 28%<\/strong><\/span> between 2021 and 2024, from USD $417.5 million<\/strong>\u00a0to $534 million<\/strong> \u2013 but revenues from local acts actually fell during this period, from $50.9 million<\/strong> to $44.8 million<\/strong>. Australian music\u2019s market share fell from 12%<\/strong> to 8%<\/strong> in that time.<\/p>\n Had local revenues kept up with overall growth, \u201ca further $40 million<\/strong> would have flowed back to the domestic industry in just three years,\u201d the report noted.<\/p>\n \u201cAustralia is now the global poster child for what \u2018market failure\u2019 looks like in recorded music,\u201d the report stated. \u201cA vicious cycle risks taking root, with increasingly fewer domestic success stories resulting in less domestic investment, meaning even lower chances of future success. Intervention is required to stop the rot.\u201d<\/p>\n The report<\/a>, written for public policy think tank The Australia Institute<\/strong> by noted music economist Will Page<\/strong> and Australia Institute Research Director Morgan Harrington<\/strong>, says the problem is algorithmic.<\/p>\n Recommendation algorithms favor content in the user\u2019s own language. That has worked out very well for many local music markets that have their own language, as Page noted in prior research<\/a>, with local music experiencing a boom in popularity.<\/p>\n \u201cEven countries as small as Denmark, which has just 5.5 million people speaking the same language, are seeing Danish-language artists dominate their charts,\u201d the report noted.<\/p>\n \u201cSixteen of the top 20 albums (and 15 of the top 20 songs) in Denmark last year were by Danish artists, performing in Danish.\u201d<\/p>\n But in English-language countries like Australia, the UK and Canada, recommendation algorithms overwhelmingly surface music from the US, which is far and away the largest source of English-language recorded music.<\/p>\n \u201cStreaming platforms have turned discovery into a global contest in which Australian artists singing in English are competing with the vast American catalog,\u201d former Australian Prime Minister Malcolm Turnbull<\/strong> wrote in the report\u2019s foreword.<\/p>\n \u201cThis digital \u2018one-way valve\u2019 that sends our listening offshore reflects a broader challenge of sovereignty in the digital age.\u201d<\/p>\n \u201cAustralia is now the global poster child for what \u2018market failure\u2019 looks like in recorded music.\u201d<\/p>\n Will Page and Morgan Harrington<\/span><\/p>\n<\/blockquote>\n To a lesser extent, the UK and Canada are seeing a similar problem.<\/p>\n \u201cThe United Kingdom has witnessed an embarrassing drought since streaming took off, failing to produce a truly worldwide success since Dua Lipa<\/strong> in 2017,\u201d the report stated.<\/p>\n \u201cIndeed, in the five years since the start of this decade, the UK has seen only 30 new artists debut among their local top 1,000.\u201d<\/p>\n Canadian artists are \u201cencroached upon by the dominance of its southerly neighbor, with a steady decline of domestic presence compounded by a \u2018talent drain\u2019 where many of their own major breakthrough artists are signed and managed out of the United States.\u201d<\/p>\n Yet if the problem in the UK and Canada isn\u2019t as big as it is in Australia, it may be due to the fact the UK continues to have outsized cultural influence, and its legacy acts like Queen<\/strong> and Oasis<\/strong> continue to bring in revenue by the millions.<\/p>\n In Canada\u2019s case, the problem is mitigated in part by various programs governments have set up to protect and prop up the country\u2019s cultural industries, the report says. (And the success of Drake<\/strong> and The Weeknd<\/strong> doesn\u2019t hurt either, we would add.)<\/p>\n The report urges Australia to take a page out of Canada\u2019s book. It points to the Starmaker Fund<\/strong><\/a>, a program that provides money to Canadian artists touring internationally to add additional dates to their tours. The program is funded by fees from private broadcasters. (Canada recently updated its telecom laws to require streaming services to pay into the fund as well, something the services are challenging in court<\/a>.)<\/p>\n \u201cThis digital \u2018one-way valve\u2019 that sends our listening offshore reflects a broader challenge of sovereignty in the digital age.\u201d<\/p>\n Malcolm Turnbull, ex-Prime Minister of Australia<\/span><\/p>\n<\/blockquote>\n The report also urges the Australian government to work with streaming services like Spotify<\/a><\/strong> to develop local, human content curators for streaming audiences.<\/p>\n \u201cCurators that can compile playlists relevant to a particular city or region (some of whom may also be local radio stations, local concert venues or local artists themselves) can organize and differentiate music in ways that algorithms either cannot or do not,\u201d the report said.<\/p>\n It also notes that some broadcasters have integrated streaming services into their apps and websites, so that listeners can add tracks they like to their playlists. By contrast, popular radio stations run by the Australian Broadcasting Corporation<\/strong> only allow listeners to hear the music on the airwaves or on its \u201ccomparatively obscure\u201d ABC Listen app, the report said.<\/p>\n \u201cWhy not make more of this great local content available to the world on other platforms, including Apple Music<\/a><\/strong>, Spotify and YouTube<\/a><\/strong>, where lots more people can discover it?\u201d<\/p>\n\n
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