5 ways the music industry changed in 2023

How has the music industry changed in the last year?

From groundbreaking advancements in AI to significant strides in artist empowerment, it's increasingly clear that this year has been a turning point. 

To find out more, we asked five industry experts about the most important trends of 2023.

1. 2023 The Year of… AI?

“2023 was a year of rapid change,” reflects Evan Buist, CEO and founder of Melodie Music:

“[We] saw the proliferation of suggestive and generative AI across all industries. The creative efficiencies unlocked in the years to come will be transformative.”

Musiio co-founder and VP, Music Intelligence at SoundCloud Hazel Savage says this is a dramatic contrast to previous years:

“When we started Musiio in 2018, no one wanted to talk about AI in music. In 2023, everybody wants to. But the explosion of content now will create a greater need for catalogue owners to curate user submissions at scale, which is where descriptive AI can help.”

While 2023 has seen significant advancements in generative AI, these developments have not been without controversy. Artists and legislators alike are grappling with the complexities of legislation and the implications of these technologies.

Evan Buist of Melodie Music acknowledges the complexities surrounding the use of copyrighted materials in training generative AI models. Despite these challenges, he remains hopeful about the future. 

He states, 'I’m optimistic that business leaders and global lawmakers will continue to see the importance of consent, transparency, and the negotiating of fair commercial licensing terms in the training of AI systems. Given we’re talking about prolific systems producing content that will compete directly with human creators, we will look back on 2023 as a fork in the road.”

2. Artist-to-fan engagement - connecting creators and superfans

2023 was also a “tipping point” for artist empowerment, says Bina Mistry, Director, Music Licensing and Partnerships at SoundCloud and founder of music:defined. That’s largely down to “artist-to-fan” connections – a concept that grew in popularity this year.

“Direct-to-fan platforms like SoundCloud are fostering greater music discovery and artist-to-fan connection,” she says. One such connection type is artists being able to identify and DM their top fans on SoundCloud.

The ‘1,000 True Fans Theory’ has been around for over a decade; it goes that an artist only needs 1000 true fans to make a living. But in 2023, Luminate claimed that 15% of the US general public can be categorised as “superfans”, demonstrating the potential for switched-on artists to capitalise on this sizeable market.

Christine Osazuwa, Chief Strategy Officer at Shoobs and Founder of the Measure of Music conference, suggests that in 2023, artists were increasingly able to take control of their careers using tools like direct-to-fan platforms, social media, and AI marketing support.

Given that creators have more control and direct engagement with their audiences, Osazuwa views this “democratisation” as a significant shift for the music industry towards a more artist-centric business model.

3. Subscription saturation - does anyone who wants one, have one?

In another interesting development, according to leading economist Will Page streaming service subscriptions have now reached market saturation.

Page, the author of Pivot and former Chief Economist at Spotify, suggests that “this is the year that we realised that everybody who wants a music subscription account has got a music subscription account.”

The economist asserts that the only way music subscription services can now grow is by taking customers from their competitors. Or as he puts it, “herbivores turn into carnivores.”

Taking a slightly more growth based stance, Hazel Savage, VP of Music Intelligence at SoundCloud and Musiio co-founder says: “I still see opportunity for growth in new markets, there are certain markets where streaming saturation has not been reached because of the mobile networks, costs and other forms of access. It won’t mirror the model we see for streaming subscriptions in the biggest countries the DSPs play in, but I feel it still has extreme cultural and monetary value, and with innovation I think there can be growth.”

4. Profitability - the key for businesses to control their own destiny

Shoobs’ Christine Osazuwa reflects that “the most immediate and impactful memory of 2023 will likely be the wave of layoffs across various sectors, including music.” 

In the face of difficult economic conditions, another trend has been how vital it is for music companies to demonstrate the sustainability of their business models.

Hazel Savage says: “For the music industry, I think 2023 has also demonstrated the importance of profitability. In an economic downturn, businesses find it harder to raise capital, so any music companies that can be profitable can control their own destiny.”

5. Global music trends - music reflects the world we live in

In a trend coined ‘glocalisation’ by Will Page, local artists are dominating their home charts on global platforms. Increasing exposure for non-English speaking acts across the world is also benefiting listeners by providing them with broader and more relevant musical choices.

Christine Osazuwa also highlights the recognition of Afrobeats with its own Grammy category, the undeniable dominance of K-pop and Latin music, and the rise of Amapiano and regional Mexican music all signify this shift towards a more inclusive global music scene:

“This trend aligns with my vision of making the music industry mirror the diverse mosaic of the world, in terms of sounds, cultures, and voices. The progress seen in 2023 could be viewed as a significant step towards achieving a music industry that reflects the world we actually live in.”

Remembering a pivotal year 

It's evident that 2023 has been a transformative year. From AI-driven creative breakthroughs empowering artists to global inclusivity, the industry has undergone substantial changes. 

But what did 2023 mean for you in the music industry? Share your perspective with us on LinkedIn or Twitter.