Collected in the report Report on Digital Music: Opportunities and Challenges prepared by the OECD 20 years ago.
Have the predictions about the future of music in the digital age come true?
The Society of Artists AIE provides an analysis of the predictions made in that report from the perspective of the artists.
© TyliJura
Madrid, May 28, 2025 – On December 13, 2005, the Organisation for Economic Co-operation and Development (OECD) published an extensive 131-page report titled OECD Report on Digital Music: Opportunities and Challenges, outlining the future of music in the digital age.
Taking advantage of the fact that music has been the central theme of the celebration of World Intellectual Property Day 2025, it is interesting to analyze the predictions made at that time and see how the position of the various players involved in the digital music ecosystem has evolved. However, on this occasion, we will approach it from the perspective of performing artists, a viewpoint that is often overlooked in such analyses.
The OECD report was right in predicting the digital disruption and the rise of streaming, although it underestimated the growth of this format, which has, in fact, become the key to the distribution of recorded music, breaking with all forecasts about the industry’s growth trajectory in the following years. In fact, according to the latest IFPI report, streaming now accounts for nearly 70% of the recorded music industry’s revenue, surpassing 80% in some key markets. Furthermore, streaming revenues have grown at double-digit rates over the past 10 years, and while they still haven’t surpassed the historic peak of 1999 when adjusted for inflation, it can be said that the music industry is experiencing one of its best moments, following a period of particular turbulence at the beginning of the new millennium.
That analysis was accurate in predicting the impact that new forms of music distribution would have on the complete redefinition of the music value chain, the emergence of new business models, and the prominence of new players involved in software development and Internet service provision, as opposed to the major record labels. It also accurately foresaw the lowering of barriers for distribution and its impact on the advancement of independent proposals.
On the other hand, it was unable to accurately predict the influence of new key factors that would completely change the listening experience and the discovery of new music. Notable omissions include the role of social media, algorithmic curation, and new consumption formats in completely redefining how people engage with music, and therefore how creators and rights holders design their commercial strategies.
Regarding creators, while the report predicted how digital distribution would facilitate access, it significantly underestimated some of the negative consequences of the new model for creators who, although still a key element in generating value, have seen their role diminish as the industry grew. Regarding artist compensation, the OECD report anticipated the emergence of new business models but did not predict the deep disparity in the distribution of the generated value. Several subsequent studies (WIPO, 2021) have confirmed that a small minority of artists receive earnings that allow them to live off streaming, while the majority struggle to survive.
On the other hand, the “democratization” of access to distribution has not translated into a democratization of earnings, and the lack of innovation in compensation models for the use of music has resulted in the fact that the old contracts for the commercialization of music in physical formats took a long time to evolve, and when they did, it was in an insufficient manner.
Additionally, streaming platforms have kept subscription prices artificially low, prioritizing the value derived from mass adoption and usage by consumers, as well as the potential monetization of their data, over the revenue generated through subscriptions.
The “commoditization” of music
The incentive structures proposed by the distribution models of platforms (which prioritize the quantity of content), as well as the growing role of algorithmic and editorial recommendations, have led to the “commoditization” of music, eroding the value perceived by consumers and making it more difficult for artists to differentiate themselves, especially for those in less popular genres.
The value chain has shifted, moving power towards the platforms and leaving creators with even less bargaining power, both in relation to record labels and the streaming platforms themselves. The dependency on streaming has created new vulnerabilities, particularly in areas like editorial and algorithmic curation, as well as the platforms’ own policies.
This issue is further exacerbated in the case of session musicians, who, with the exception of Spain, see their recordings used on streaming platforms without receiving any compensation beyond the payment for the work itself. They face multiple challenges, including difficulties in even accrediting their participation in the recordings.
All of this occurs in the context of the rise of generative artificial intelligence (AI), which intensifies the main issues that have characterized the development and adoption of the streaming distribution model. This is particularly true regarding the shift of value from human creators to technology, and the tendency toward the homogenization of the musical offerings available on platforms, with the implications this has for the sustainability of the model and cultural diversity.
In conclusion, while the OECD report provided valuable insight into the digital transformation of the music industry, it is crucial to recognize that the transition to streaming has not been a “win-win” for all industry players, as evidenced by the collateral effects this transformation has had on artists and musicians. Therefore, creating a sustainable and equitable digital music ecosystem requires an approach that prioritizes fair compensation, artistic diversity, and transparency.