What’s wrong with the music market?
Before entering entrepreneurial activity, it is always worth carefully studying the specific market characteristics of a given industry. Study the habits and behavior of players at different levels, get acquainted with the guides who will bring you up to speed on the latest events, trends, problems and prospects opened up by its development.
Let this article become your guide through the jungle of the Ukrainian music industry. With this material, you will be able not only to survive in it, but also to understand how to conquer these jungles or build your own alternative.
What makes the music market interesting? Here are some conclusions from personal research:
- It is a market for those who live for music, creativity and talent. Although there are only 7 notes in the world, it seems that all possible ideas for music videos have already been realized, and surprising a discerning audience is becoming increasingly difficult, but the music industry offers endless opportunities for creativity and growth. Thanks to the latest technologies such as VR, AI, WEB3, free niches continue to emerge.
- Boundless geographic scale and no borders. A music project can operate entirely online from anywhere in the world and cover specific regions or the entire world, depending on the scale chosen by the artist. It is also a paradise for those interested in influence, cultural and media impact. Thanks to a music product and the artist’s personal brand, it is possible to become well-known, influence a million-strong audience, and become an opinion leader.
- Representatives of different professions can find their place in the music market: from traditional managers, marketers, lawyers, and sound engineers to less obvious ones — psychologists, web3 developers, financiers, and others. It is a full-fledged industry, where the daily tasks of music projects go far beyond creating songs and distributing them.
- To start making a profit, sometimes minimal financial investment is enough. It all depends on the team’s capabilities and the level of autonomy of the music project.
Less pleasant aspects of Ukrainian realities:
I want to draw attention to certain shortcomings and problems that one has to face, and to warn about them. After all, every new player in the market can make it stronger and more comfortable for themselves and others.
1. A centralized music industry.
This is a global problem which, despite its shortcomings, once built the world music industry. Most of the market is controlled by the three largest labels (the so-called “major labels” — Universal Music Group, Sony Music, Warner Music). This monopoly limits opportunities for independent artists to compete and creates an imbalance in access to resources, including playlists, media support, concert venues, etc.
Streaming platforms such as Spotify and Apple Music largely control access to the audience and determine which music will be promoted. Their algorithms often favor popular performers or those with commercial backing, which reduces the chances of success for independent artists.
Because centralized platforms have significant control over the market, they set royalty payment terms that are often unfair to artists. For example, according to Spotify’s 2024 changes, if a song has fewer than 1,000 streams in the reporting period, no payments are provided. This complements the common saying: “If a song is playing somewhere, someone is paying for it... but it’s not a fact that the author is earning.”
2. Insufficient funding and investment
Ukraine still lacks investment in the music industry. Because of this, talented music startups with a high cost structure according to their business model often face problems of simple survival, funding product creation and its promotion. The lack of infrastructure for angel or venture investments, bureaucratized state grant programs and practically absent patrons limit the development opportunities for innovative projects and experimental music.
3. Weak infrastructure and lack of support for the local Ukrainian market
The Ukrainian market largely relies on itself when it comes to developing national culture. International streaming platforms such as Spotify, Apple Music and YouTube are not very interested in developing Ukrainian-language products because of the limited number of listeners and the high level of piracy. This leads to lower revenue rates from digital distribution.
One possible business solution is to focus on the international market or work in several markets simultaneously. However, such a choice does not help increase the recognizability and popularity of Ukrainian-language products outside the country.
4. Weakly developed system of monetization and payment of copyright royalties
The royalty and licensing system in Ukraine operates inefficiently. Collective management organizations (CMOs) often do not ensure transparency and fairness in the distribution of payments. Businesses that use music (cafes, restaurants, concert venues, etc.) often bypass copyright payment schemes to reduce costs. An insufficiently transparent system for collecting and distributing copyright royalties leads to reduced income for musicians and authors.
5. The long transition to a culture of supporting Ukrainian products and officially consuming content
Although the situation is gradually changing, a significant part of the Ukrainian audience still actively consumes pirated content, including through Telegram channels or bots.
This does not support Ukrainian artists and leads to lost profits. The lack of strict enforcement of copyright infringement limits the opportunities for growth of the legal music market. Some listeners also choose foreign music, often considering it higher quality. However, my personal observations indicate the opposite: Ukrainian independent artists and producers make high-quality music that deserves attention. The Ukrainian music industry is gradually moving away from cheap arrangements and formulaic lyrics, offering interesting and unique works.
6. Lack of a unified modern professional education in music management and business
There is a shortage in Ukraine of educational programs specialized in music management, marketing, and production that take into account the specifics of the local market. This creates a shortage of qualified personnel in the sector. Managers, PR specialists, marketers, and producers often do not have sufficient knowledge of the specifics of the music business, which reduces the effectiveness of working with artists.
On the positive side, there are quality educational initiatives such as Music Export Ukraine, which organizes international exchange programs, training events, and courses together with the Eastern European Music Academy (EEMA). The organization Porichka also holds educational events. However, the Faculty of Show Business Management at Kyiv University of Culture, for example, does not train specialists capable of developing and supporting high-quality music projects.
7. Lack of a stable media field to support Ukrainian music
Ukrainian independent music often does not receive sufficient support from radio stations, TV channels, and other media. This topic requires separate discussion, since independent media in today’s conditions are barely surviving or do not have the resources to exist at all, working as social projects. The lack of financial support for them means that they cannot effectively support the music market.
Many believe that the industry needs more platforms that will promote local artists. In my opinion, it is not about quantity, but quality. If the main music media outlets, such as Muzvar, SLUKH, Liroom, and Neformat, received sufficient funding, we would see even more and even better materials, special projects, and media coverage about Ukrainian music.
8. Low level of digital literacy in the music business
Ukraine’s music industry is still focused on basic operational processes, and the level of awareness of modern digital IT and Web3 technologies remains low. This is partly due to insufficient funding directed toward studying and implementing innovations in business processes. Although in 2024 technologies such as Web3 are already commonplace in many industries, the Ukrainian music market often remains conservative or simply fails to keep up with experimenting with new approaches such as NFTs, blockchain, or artificial intelligence.
9. War and economic instability
Briefly here. Hostilities, economic instability, and the social situation create additional difficulties for the development of the Ukrainian music market. People have fewer resources, and the country is sinking into a bottomless debt pit. The mood in the third year (2024) of the war is not improving. Because of the war and its consequences, many resources are directed to other areas priority for survival, which reduces opportunities for investing in cultural projects.
Conclusion
To engage in artistic, and more specifically musical, activity, it is worth determining whether the goal is to turn creativity into a systematic business and receive fair compensation from it. Entering the music market unprepared, one can easily end up in an unpleasant financial deficit. However, in a time of crisis (a time of opportunity), in a time of the development of artificial intelligence and social networks open to UGC creators, launching a music startup and attracting your own audience has become easier and cheaper.
Now many technical tasks can be handled with the help of ChatGPT, which speeds up content creation, planning, writing press releases, building a personal brand, and so on. The Suno and Udio neural nets simplify the process of creating references for arrangement, and Midjourney helps generate visual images and covers. Distribution for an independent artist can also be handled independently. So everything is moving toward the music industry gradually transitioning to decentralization based on DAOs (decentralized autonomous organizations), which will significantly shorten the path from artist to listener.
Create your own unique path in the music industry — it will be one of a kind. I used to make mistakes by trying to enlist the support of already experienced market participants in order to bring my ideas to life. However, I was either brushed off or used for their own purposes, so this path turned out not to be mine. Sometimes it is worth trusting yourself and creating something of your own, regardless of obstacles, mistakes, and other people’s opinions, and even more so regardless of outside support.
Author: Pavlo Striletskyi
