What does Mariah Carey’s perennial holiday hit, “All I Want For Christmas Is You,” tell us about the past, present, and future of the music industry?
It’s the holiday season, and do you know what that means? The ubiquitous presence of Mariah Carey’s, “All I Want For Christmas is You.” The iconic song signifies not only Christmas cheer but the dramatic shift in music distribution and monetization since its 1994 release.
Mariah Carey has amassed over US$ 75.6 million since its release with an annual earning of roughly US$ 3 million each holiday season.
Yes, it’s a lot.
However, this number raises a critical question. For artists who aren’t as globally recognizable as Mariah Carey, how do they earn money from their music, and is the current system even sustainable?
The Era of Physical Sales
In the 1990s and early 2000s, artist earnings stemmed primarily from physical sales, such as CDs and cassettes. The royalty rate an artist earned from the sale of their album was 10-25%, depending on their popularity and contractual agreements.
Additionally, radio airplay contributed significantly to their income. This period can be characterized as a centralized system, where major record labels and physical stores dominated the distribution channels.
The Age of Streaming
The introduction of digital downloads disrupted the industry, but the streaming services reshaped the revenue models for music. Artists shifted to a per-play basis which democratized music distribution.
An independent artist could reach global audiences and build their own following through social media, independent of the traditional record labels.
However, the per-stream royalties are significantly lower compared to earnings from physical sales, and it forces artists to rely more on live performances, merchandise, and branding partnerships. Which is a disadvantage for emerging artists.
The Future, Web3, and Beyond
Web3 technologies represent the next paradigm shift in the music industry, fostering a closer artist-to-fan relationship.
It empowers musicians, especially emerging ones, to engage deeply with their fanbase through interactive experiences and community-driven initiatives as a dedicated small fan base provides significantly more support than an unengaged larger audience on social media or streaming services.
Web3 also introduces new monetization and rights management opportunities. Artists can tokenize their music as NFTs, granting ownership or exclusive access.
This generates a new revenue stream for artists but also aligns the financial success and interest of musicians with their early supporters.
Final Thoughts
The music industry’s transformation from physical sales in the 90s to today's streaming era highlights adaptability and resilience. Like “All I Want For Christmas Is You,” artists must embrace new technologies to maintain fan engagement. Web3 represents the next evolution step for this dynamic industry.
So, next time you hear Mariah’s iconic tune, imagine a world where it was released as an NFT, and you, as an early fan, owned a share of its royalties since 1994!
All I want for Christmas is that.