Inflection Point? A Crisis in Paying for Culture in the Age of Abundance

We’re consuming more culture than ever:

• Last week it was reported that music platforms streamed 1 trillion songs in the first six months of 2023.
• The most-viewed YouTube video is Pinkfong’s Baby Shark Dance, which has been seen 13 billion times.
• In 2018, a record 873 movies were released in the US and Canada, a year in which Netflix alone spent $13 billion on content.
• Last year between 500,000 and 1 million books were commercially published (depending on how you count), four million more if you add self-published.
• According to some reports, 100,000 tracks are uploaded to Spotify every day, where there are currently 100 million songs already available.
• The New York Times reports 580 million monthly visitors online. If that sounds like a lot, Yahoo counts 3.3 billion per month.

The audience has never been bigger, and its appetite in the mass-distraction marketplace seems insatiable. But what does 13 billion YouTube views mean? Justin Bieber has 111 million Twitter followers. Is he really that smart? Or entertaining? Or even have much to say? [How algorithms magnify these numbers is a topic for another day]

Despite the demand, over the past few months the production side of all this “content” seems to have been unraveling. Writers and actors in Hollywood are on what looks to be a protracted strike. Streaming companies are pulling back, laying off and consolidating. TV networks and cable companies are hemorrhaging customers. Twitter is melting down. Reddit is on strike. BuzzFeed News closed and National Geographic laid off all its writers. Onetime sports powerhouse ESPN is in crisis. NPR has made significant staff cuts. Spotify cut 200 employees. The publishing industry is shedding workers and some of its brightest stars. Musicians are in revolt over the lack of money they get from streamers. The podcast boom seems to be wilting. And theatre companies across the US are in crisis, many closing down or quitting some of their most-beloved programs. Look next for ballet companies, opera companies and symphony orchestras to declare distress.

With seemingly insatiable demand for content, why now the crisis? Compensation has been separated from demand. Sell widgets at X price with a profit of Y and the more widgets you sell the richer you become. That’s how it used to work with culture. Sell tickets, sell albums, sell paintings, people give you more money. But in the age of abundance, an audience of a million streams doesn’t necessarily translate into financial success. A billion streams doesn’t make you a superstar. We seem to be at an inflection point for creative industries. It’s the convergence of a number of trends:

1. Anything ad-supported (journalism, TV, websites) has seen its revenue collapse as millions of ads became billions of ads and ad rates dropped precipitously. Big Tech companies were allowed to swallow up both the marketplace for ads as well as the supply, controlling the market at massive scale making it impossible for others to compete. Content makers have virtually no power in this scenario.
2. Investors dazzled by the scale at which Big Tech could deliver audience, poured tens of billions into companies that promised massive numbers of consumers (even if they didn’t have them yet). Anyone operating in more traditional models unable to compete with tech scale is considered a loser and non-viable. Not worth investing in. When entertainment giant Disney is considered too small to compete, you know there’s a problem.
3. Selling abundance versus the intentional purchase. Streaming companies are successful because they offer access to everything (as they define it). Purchase a single album for $19.95 versus get access to all recorded music (probably including the album in which you’re interested) for $9.95 per month and it’s kind of a no-brainer. But “access” is a different relationship with an artist than choosing to own a copy of their work. And artist share of the abundance transaction is woefully insufficient because abundance effectively neutralizes any one artist’s power to negotiate for more. Additionally, the evolution in consumer behavior to outsourcing algorithmic selection of their music offered by streaming has changed the way people find and listen to music. [Again a topic for another time]
4. We often talk about non-profit arts as if they’re a separate discreet universe. They’re not. As Andrew Taylor likes to point out – there’s only one business model – the one that supports what you’re trying to do. If you’re a theatre company right now, costs are likely up ~30 percent and ticket sales are down ~30 percent. Other non-profit art forms report versions of these numbers. Non-profit arts are caught in the same dynamics as for-profit culture, just on a smaller scale (millions of dollars instead of billions). The audience no longer makes distinctions between high and low or commercial versus non-profit. So non-profit is facing the same scale and abundance issues commercial culture is, but with more limited tools. Plus, the non-profit model has been slow to evolve whereas commercial culture is more nimble at reinventing the basics of their business model.
5. The rise of the creative class. (No, not Richard Florida’s CC) People define themselves by the culture they choose to share. And they’re sharing more than ever. This has changed their relationships to culture. And their expectations. In a world of hyper-abundance and the ability of the audience to define themselves creatively, what they choose is either aspirational or oppositional. That is, they value culture as a reactive vehicle which they can use as an opportunity to make a statement – of solidarity, of membership in a tribe, or as an idea or tribe worth fighting against. The sharing algorithms amplify messages that outrage or soothe, bypassing the ordinary or thoughtful. This has narrowed the aesthetic range of culture most people encounter or engage with. So if your work exists outside the established algorithms, you’re having a more difficult time being found.

Add to this the introduction of generative AI-created content and the problems of artist compensation are about to get exponentially more challenging. Last week an AI company announced its AI had created 100 million new songs (essentially doubling Spotify’s catalogue). Spotify now does battle daily with the AI-driven AI-created bots uploading “songs” to its platform. Amazon likewise is challenged to police the hundreds of thousands of AI-generated “books” being thrown up on its marketplace.

Are any of these any good? Doesn’t really matter – the sheer volume influences the algorithms, making it more difficult for artists to be noticed and chosen. There will be mitigations, just as we have found ways to defend against spambots. But the glut of content is only going to grow, continuing to put pressure on artists to be compensated for their work.