The Economics of a Song: What Makes a Song Commercially and Financially Successful?
What makes a song a hit? Is it the catchy melody, the relatable lyrics, or the star power of the artist? While these elements are undoubtedly important, the economic factors behind a hit song are just as crucial. Understanding these factors can provide insight into how the music industry operates and what drives commercial and financial success in this competitive field.
Marketing and promotion are significant contributors to a song's success. Record labels invest heavily in marketing campaigns, utilizing social media, traditional media, and influencer partnerships to create a buzz around a new release. For example, the viral marketing campaign for Lil Nas X's "Old Town Road" back in 2019 leveraged TikTok to reach millions of users, catapulting the song to global fame. It is also useful to note that this was the same time TikTok began gaining the popularity it has today. Thus, The record label’s campaign with TikTok not only capitalized on the platform’s growing user base but also helped shape the way music is marketed in the digital age.
Lil Nas X and Billy Rae Cyrus for “Old Town Road” in 2019 (Popular Mechanics)
To understand the factors which make a track commercially and financially successful, let us first break down and define “success” in the world of music.
"Commercially successful" music typically refers to tracks or albums that achieve significant sales, streaming numbers, and other forms of revenue generation. A commercially successful song or album performs well in the market, attracting a large audience and generating substantial income for artists, record labels, and other stakeholders involved.Key indicators of commercial success in music include:
Sales: Traditionally, music sales in the form of physical albums, singles, or digital downloads have been a primary measure of commercial success. High sales numbers indicate the popularity and commercial viability of a piece of music.
Streaming: With the rise of platforms like Spotify, Apple Music, and YouTube, streaming numbers have become a crucial metric for assessing commercial success in the modern music industry. High streaming numbers signal a song's popularity and its ability to reach a wide audience.
Chart Performance: Appearing on music charts like the Billboard Hot 100, the UK Singles Chart, or other regional and genre-specific charts is a significant achievement. High chart positions often signify commercial success and broad appeal.
Awards and Recognition: Winning awards such as Grammy Awards, Brit Awards, or other industry accolades can reflect commercial success. These awards often recognize both artistic merit and commercial impact.
Touring and Merchandising: Beyond recorded music, commercial success can also be measured by successful concert tours, merchandise sales, and other revenue streams associated with the artist's brand.
Licensing and Sync Deals: Securing licensing deals for music to be featured in films, TV shows, commercials, and other media can indicate commercial success. These deals provide additional revenue streams and exposure for the music.
Commercial success in music is a multifaceted concept that encompasses various measures of popularity, financial performance, and industry recognition. Artists and industry professionals strive for commercial success as it often translates to financial stability, increased opportunities, and a wider reach for their music.
While doing my research for this blog post, I came across an op-ed written by Chris Dale in which he described:
“Commercially successful means only one thing in the music business…that the money invested into a performer has been completely paid back through royalties via consistent album sales. ”
This statement underscores the financial aspect of commercial success, emphasizing the importance of recouping investments made by record labels and stakeholders. It highlights how, in the music industry, commercial success is not just about popularity or critical acclaim but also about financial return on investment.
What I find most amusing about this topic is the consumerism aspect of it all. It is no surprise that in today’s world, consumerism drives much of our behaviour and decision-making. From the way we consume music through streaming platforms to the merchandise and concert tickets we eagerly purchase, our consumption patterns heavily influence an artist's commercial success. One of my favourite examples of this is the new tactic of popular artists such as Billie Eilish, Taylor Swift, Ariana Grande and alike, releasing multiple versions of their new projects in the hope of topping the charts; making both the album financially successful and keep the record label happy.
A think-peice written by Caroline Candeloro gives a great explanation of consumerism amongst Swift’s most devoted fanbase, the “Swifties”. Candeloro explores how Taylor Swift's marketing strategies and engagement with her fans encourage repeated purchases. For instance, Swift often releases her albums in multiple formats—standard editions, deluxe editions, and special editions with exclusive content. Additionally, she frequently offers limited edition merchandise, from clothing and accessories to vinyl records, each tied to her latest projects.
One notable example is her "Lover" album (2019), which was released with four different deluxe versions, each containing unique content like personal diary entries and exclusive photos. This approach not only incentivizes fans to buy multiple copies of the same album but also fosters a sense of exclusivity and urgency. Furthermore, her use of collectible items, such as autographed CDs and special edition vinyls, taps into the fans' desire to own a piece of their idol's legacy. Additionally, her re-recording of old albums, branded as "Taylor's Versions," has driven significant sales and streaming numbers, as fans eagerly support her quest for artistic ownership. Swift's ability to create a sense of exclusivity and urgency through limited-edition merchandise, surprise song releases, and immersive experiences like pop-up shops and fan events exemplifies how consumerism plays a pivotal role in her commercial success.
Swift’s strategic use of social media also plays a significant role in driving consumerism. She engages with her fans directly, creating a personal connection that makes them feel valued and understood. This bond translates into a stronger inclination to support her financially, whether by purchasing music, concert tickets, or merchandise. Through these savvy marketing tactics, Taylor Swift has effectively turned consumerism into a cornerstone of her commercial strategy, making her one of the most successful artists of our time.
So, what makes a song commercially and financially successful? It's a combination of factors, but consumer engagement and purchasing behavior are critical. Artists who can create a strong emotional connection with their fans and encourage repeated consumption of their music and merchandise are more likely to achieve commercial success. Strategic marketing, exclusivity, and fan loyalty all contribute to driving sales and streams, ultimately making a song—and the artist behind it—commercially and financially successful.
