Part 20. Live Performance and Labels — The Flow of Money in the Music Ecosystem

The Genealogy of Payment Habits — A Historical Hint Book for New-Content Business Models Volume 2 · Part 20

As Streaming Grew, Live Performance Grew with It

In 2023, Taylor Swift’s “The Eras Tour” (2023–2024) became the highest-grossing music tour in history. Its first-year North American dates alone generated more than $1 billion, setting a world record for a tour by a single artist. That same year, Spotify surpassed six hundred million users worldwide, while streaming royalties remained only $0.003–0.005 per play. Even one million streams earn an artist just $3,000–5,000. A single Taylor Swift concert brings in far more than that.

BTS combined online streaming with an offline concert for “Permission to Dance on Stage — Seoul” (2022). Pandemic restrictions limited the three in-person shows to about forty-five thousand attendees, but paid online streaming and live viewing at roughly 3,700 cinemas worldwide brought the total audience to about 2.46 million. The global live-music market reached approximately $26 billion in 2022, nearing its pre-pandemic 2019 peak of about $29 billion.

This is the structure of the modern music economy. Streaming democratized music distribution, but it also shifted the center of revenue toward live performance. The more developed the digital world becomes, the scarcer a physical venue feels. No matter how many times a recording is streamed, a concert is an experience that exists only in that time, place, and performance. People willingly pay tens or hundreds of thousands of won for it.

Behind this performance economy, however, lies a complex ecosystem: labels, concert promoters, copyright-management organizations, distributors, and platforms. From the moment a song is made until it reaches a fan’s ears—and until it resounds inside a venue—how do the participants in that ecosystem divide the money? That structure is the subject of this part.

The Business Model of Live Performance — A Triangle of Tickets, Merchandise, and Sponsorship

Live-performance revenue rests on three pillars.

Ticket revenue. This is the most direct source of income. Prices vary with seat location, artist recognition, and venue size. A small-club show may cost around ₩30,000, a large-arena show ₩100,000–200,000, and a global star’s stadium concert more than ₩500,000. For a concrete example, tickets for Blackpink’s 2023 Seoul finale of “BORN PINK” ranged from ₩121,000 for an A seat to ₩220,000 for VIP. The promoter, venue, artist’s agency, and artist divide this revenue. The exact shares depend on the contract, and artists with greater bargaining power take more. An artist commonly receives 60–80 percent of performance revenue, with the rest allocated to the promoter and venue rental.

Merchandise revenue. Official merchandise sold at the venue—T-shirts, albums, light sticks, posters, and more—is the next major revenue source after tickets. Its margin over production cost is high. A T-shirt that costs ₩5,000 to make may sell for ₩50,000 at the venue. At a concert with a ₩100,000 ticket, a fan may spend another ₩100,000–200,000 on merchandise on average. SM Entertainment generated roughly ₩20 billion from concert merchandise alone in 2022, about 20 percent of its total concert revenue. Fans buy while fully aware that the goods are part of the concert experience. They serve as proof that “I was there.” Concert merchandise can later trade for even higher prices on resale markets.

Sponsorship revenue. Corporate sponsorship is a major funding source for large concerts. Beer companies, telecommunications providers, and financial institutions participate as title or partner sponsors. In Korea, Hyundai Card has organized and sponsored major performances through its “Super Concert” series since 2007, including Coldplay’s first Korean concert in 2017. The card company buys the concert title and uses it for member marketing and as a brand asset. Sponsors distribute free samples or operate booths at the venue to expose audiences to their brands. For a promoter, sponsorship is an important source of income that covers part of the cost of staging a concert.

Together, these three pillars form the live-performance business model. It has a structural quality that streaming cannot replace, no matter how advanced it becomes. A concert occurs on one date and in one place. A recording can be streamed again at any time, but a concert disappears when the moment passes. That one-time nature is the reason to pay.

Live Nation — The Gatekeeper of the Performance Ecosystem

The most important corporate name in the concert industry is Live Nation Entertainment, formed in 2010. Its merger that year with Ticketmaster created the world’s largest live-entertainment company, vertically integrating ticket sales, concert promotion, and venue operation. The US Department of Justice approved the merger with conditions, including a requirement to license ticketing technology to competitors. Revenue reached approximately $22.7 billion in 2023, up 36 percent year over year.

Live Nation controls concert promotion through relationships with more than forty thousand artists worldwide; venues through direct operation of more than two hundred sites in the United States and abroad; ticket sales through more than five hundred million tickets sold worldwide each year by Ticketmaster; and sponsorship through its brokerage of concert-sponsorship agreements.

This integrated structure is efficient, but it creates a monopoly problem. If an artist attempts a major show without Live Nation, access to Live Nation-operated venues becomes difficult. At the same time, bypassing Ticketmaster’s dominant sales system makes it harder to reach fans. In practice, artists must pass through Live Nation to mount a large tour.

Ticketmaster’s website crashed in November 2022 during ticket sales for Taylor Swift’s Eras Tour. More than fourteen million people arrived that day, far beyond the 3.5 million preregistered users, paralyzing the system. The incident later became part of the background to a US antitrust case. In 2024, the US Department of Justice sued Live Nation, arguing that its control over concert promotion, venues, and ticket sales allowed it to impose unfavorable terms on artists and consumers. The outcome could change the business-model structure of the entire performance ecosystem.

Labels and Artists — How Revenue Is Actually Divided

How is the money divided when one album is sold? As a rough example based on US-style contracts and converted into won, consider an album priced at ₩10,000.

The retailer—record shop or online store—receives ₩2,500, or 25 percent. The distributor receives ₩1,000, or 10 percent. The main label receives ₩3,250, or 32.5 percent. The artist receives ₩650, or 6.5 percent. Songwriters and lyricists receive ₩195, or 1.95 percent. The producer receives ₩130, or 1.3 percent. The remaining 23 percent or so is dispersed among manufacturing and logistics costs, marketing, and production expenses paid to session musicians, sound engineers, and album-art designers.

The artist’s 6.5 percent stands out. It is only ₩650 from a ₩10,000 album, and even that is not paid until the artist’s advance has been recovered. A label pays an advance at the beginning of production, but this money is debt. For a new artist, an average album-production advance is $250,000–500,000. As the album sells, the advance is deducted from the artist’s royalties first. The artist receives no royalties until the balance is recovered. Even if one million albums sell, the artist’s payout can remain zero before recoupment. This recovery of the advance is called recoupment. It is why many new artists release several albums without ever receiving a royalty payment.

Labels, meanwhile, treat album production, marketing, and music-video costs as part of the advance and recover them from the artist’s royalties. They do assume the investment risk of paying first, but the recoupment structure transfers much of that risk to the artist. If an album sells, the label takes 32.5 percent. If it does not, the label limits its losses by refusing another contract. Even a successful artist may earn nothing when the advance is large.

Streaming revenue is divided through an even more complex structure. Spotify keeps about 30 percent of total revenue, while the remaining 70 percent goes to record labels and publishers. From that 70 percent, a major label pays the artist only the contracted royalty rate, commonly 15–25 percent. As a result, the artist’s share is often just 10–15 percent of total streaming revenue.

About 68 percent of global recorded-music revenue is controlled by the three major labels: Universal Music Group (UMG), Sony Music Entertainment, and Warner Music Group (as of 2022). In Korea, the four major agencies—SM, YG, JYP, and HYBE—account for more than 60 percent of Korean music revenue (as of 2022).

This structure accelerated the independent-artist movement. Without a label, an artist can upload music directly to streaming platforms through a digital distributor such as DistroKid or TuneCore and retain 80–100 percent of the revenue. The tradeoff, of course, is the absence of marketing and distribution support.

The 360-Degree Deal — When a Label Wants Every Revenue Stream

Major labels began introducing a new contract form in the late 2000s: the 360-degree deal.

Traditional label contracts focused on a share of record sales. However much an artist earned through tours, merchandise, or advertising appearances had nothing to do with the label. The label participated only in record revenue.

A 360-degree deal is different. The label takes a percentage not only of recording revenue but also of tours, merchandise, advertising and brand collaborations, publishing copyright, and even social-media income. However the artist makes money, the label participates.

From the label’s perspective, the structure is rational. In the streaming era, record revenue alone may not justify the risk of investing in a new artist, so the label includes multiple income sources to secure a return. An early example was the 2002 agreement between EMI and Robbie Williams. EMI shared tour, merchandise, and brand-collaboration revenue under a deal worth about £80 million, then one of the largest music contracts in history. Warner Music Group converted a substantial share of its new-artist contracts to 360-degree deals in the late 2000s.

For artists, this is a double-edged sword. They receive the label’s marketing support and global network, but a significant portion of their earnings still goes to the label after success. This is why artists who gain bargaining power sometimes terminate their label contracts and become independent.

Taylor Swift’s case is more direct. After Swift left her former label, Big Machine Records, in 2019, Scooter Braun acquired Big Machine, transferring ownership of the masters for Swift’s first six albums to Braun’s side. Swift challenged the move publicly and began her “Taylor’s Version” rerecording project in 2021. It became a symbol of the struggle to make the artist, rather than the label, the practical owner of copyright assets.

K-pop agency contracts in Korea have traditionally been short-term agreements of three to five years with integrated terms comparable to a 360-degree deal. Agencies manage official merchandise, advertising, and likeness rights. When an artist leaves, ownership of the artist’s image and content can become a source of dispute.

Global Copyright M&A — Music Becomes a Financial Asset

In the early 2020s, new participants entered the music-copyright market. Private-equity funds and specialist investment firms began buying music catalogs at scale.

Hipgnosis Songs Fund, listed in London in 2018: This British music-rights investment company acquired copyright catalogs from Justin Timberlake, Shakira, Neil Young, and Fleetwood Mac members Christine McVie and Lindsey Buckingham. Its assets under management reached approximately $2.7–2.9 billion in 2022. The investment thesis was that streaming royalties, synchronization fees paid when music is used in film or advertising, and publishing royalties produce stable cash flow.

Catalog sales by famous artists: Music-catalog M&A surged between 2020 and 2021. In 2020, Bob Dylan sold the copyrights to roughly six hundred songs, including “Blowin’ in the Wind” and “The Times They Are A-Changin’,” to Universal Music Publishing Group for an estimated $300–400 million. In 2021, Bruce Springsteen sold Sony his music catalog and master rights—including “Born to Run” and “Born in the U.S.A.”—for about $500 million.

These deals combined investor demand for stable yields in a historically low-interest-rate environment with the belief that streaming had stabilized the long-term value of music rights. Artists also had an incentive to convert their assets into cash during their lifetimes.

In Korea, the copyright portfolios of SM, HYBE, and YG are reflected in corporate asset values. HYBE recorded approximately ₩1.7803 trillion in revenue in 2022, with albums and digital music accounting for 30–40 percent of the total. Music copyright now trades as a financial asset like bonds or real estate. The music business model has shifted from “selling an artist’s creations” to “managing an IP portfolio.” The label’s role has changed with it: efficiently managing and monetizing an existing catalog is now as important as producing new music.

A Specialized Field — Copyright Disputes: Sampling, Plagiarism, and IP Wars

As music copyright becomes a financial asset, disputes multiply.

Sampling disputes: Using parts of existing music in a new track is a creative method intrinsic to hip-hop and electronic music. Unauthorized sampling, however, is copyright infringement. The 1991 decision in the case of Biz Markie and Gilbert O’Sullivan established that unlicensed sampling was illegal. Clearance costs then rose sharply, significantly increasing the cost of sample-based hip-hop production. An uncleared sample may force distribution of an entire album to stop.

Plagiarism disputes: The 2015 “Blurred Lines” judgment shook the music industry. In a suit claiming that Robin Thicke and Pharrell Williams’s 2013 hit “Blurred Lines” resembled Marvin Gaye’s 1977 song “Got to Give It Up,” the court found copyright infringement and awarded $7.4 million. The argument concerned a similar “overall feel,” rather than the lyrics or melody. Since then, advance similarity review has become standard in the industry even for songs that merely evoke the atmosphere of older music.

K-pop’s copyright structure: Copyright arrangements in Korean entertainment are distinctive. Agencies comprehensively manage artist-name trademarks, likeness rights, and neighboring rights in sound recordings. Under some contracts, agencies also co-own copyrights in songs written by the artists themselves. This is why artists can find it difficult to assert rights over their own songs after leaving an agency.

Failure Case — The Collapse of MySpace Music

In the early 2000s, one platform seemed poised to transform the relationship between music and artists on the internet: MySpace, founded in 2003.

MySpace was especially useful to musicians. Bands and artists uploaded music to their own pages, where fans could discover and listen to it directly. It was the first large-scale digital space in North America where independent artists and indie bands could gather fans without a label. When News Corp, controlled by Rupert Murdoch, acquired MySpace for $580 million in 2005, it was one of the largest social-media acquisitions to date. The music-platform business was seen as a core asset. MySpace peaked at approximately 115 million monthly visitors in 2008.

The problem was strategy. After the News Corp acquisition, MySpace focused on advertising revenue at the expense of user experience. Pages filled with ads, and the interface became slow and complex. Facebook’s clean interface began drawing users away rapidly from 2007, and artists followed their fans to Facebook.

MySpace launched its own streaming service, MySpace Music, in September 2008. It signed the four major labels—Universal Music, Sony Music, Warner Music, and EMI—and attempted to sell music through free streaming and advertising. But adding a music service on top of a platform whose user base was already collapsing did not work. In 2011, MySpace was sold to Specific Media for $35 million, about one-sixteenth of the $580 million acquisition price. News Corp lost more than $500 million.

Platforms that amplified rather than replaced the artist–fan relationship followed another path. SoundCloud, founded in 2008, and Bandcamp, also founded in 2008, survived by preserving structures through which artists could reach fans directly. MySpace, which tried to convert the relationship into advertising revenue, was pushed aside.

What MySpace missed was the relationship between artist and fan. That relationship was the platform’s value. When the platform treated advertising revenue as more important, it broke the relationship. On a platform without the relationship, neither artists nor fans have a reason to remain. MySpace shows what happens when a music platform attempts to replace the artist–fan relationship.

Hints from This Part — What Performance and Labels Teach Us

Hint 1: What value in your content is available “only on site”?

Streaming reduced record revenue, but performance revenue grew. If an experience cannot be perfectly reproduced digitally, that is a space where people will pay: an interactive experience, a direct meeting with an artist, or something possible only at a particular time and place. What is that element in your new content?

Hint 2: Which revenue streams in the contract are “yours”?

A 360-degree deal with a label requires every revenue stream to be shared. Working independently, by contrast, may require only a platform fee. The history of the music industry shows in advance the consequences of choosing between early support and long-term independence. In your content, are you clear about what you will give to the label—the intermediary platform, distributor, or promoter—and what you must protect?

Hint 3: Does the platform support the artist–fan relationship, or try to replace it?

MySpace began as a platform that enabled the artist–fan relationship, then collapsed when it tried to turn that relationship into advertising revenue. Weverse and Bubble grew by enriching the artist–fan relationship. The moment a platform exploits the relationship, fans move elsewhere. How the platform you build—or the one you join—treats the artist–fan relationship determines its lifespan.

The next part examines the music industry’s final chapter. Karaoke and audio devices are additional payment-habit spaces created by ways of enjoying sound: why karaoke was invented in Japan while Korean noraebang built an entirely different economy, and how headphones and Bluetooth speakers changed the business model of the music experience.

Kim Dongeun · WhtDrgon@MEJE.kr · 2026