I love music. I can’t tell you how much money I’ve spent on it through the years, but a lot. I own thousands of CDs (either in physical or digital form) and am blessed to count as friends some of the most talented artists I’ve ever heard.
It’s that last part, I guess, that causes me to take what has happened to artist revenues more personally than most people who aren’t actually artists. The sad truth is that while superstardom and insane wealth have never been guaranteed to every kid who picked up a guitar, it’s harder than ever for even the most talented artists and bands out there to make a living, let alone get rich. Sure, the technology makes it easier and more affordable to record and produce your music, and the Internet affords more different channels for marketing and distribution than a band coming along in the 1970s could have dreamed possible.
Still, those developments means more groups vying for the attention of the audience than ever, and it also means that bands without a scrap of talent, bands that once upon a time would never have gotten past the front desk, are now part of the competitive landscape. There’s more signal, to be sure, but there’s a hundred times more noise to sift through in search of it.
Short version: it’s damned hard to make a living as a musician, no matter how good you are. And some of the best bands I have had the privilege of knowing write songs and play gigs and record in whatever spare time they have away from their day jobs.
This is why so much of what has been loosely termed “sharing” in the world of music consumers has bothered me. Even if you don’t buy the argument that acquiring a CD without paying for it is stealing, there is no argument that you’re acquiring it in a fashion that makes it less likely you’ll ever hear from this artist again. Band X does a great record. It gets bought a few times, shared a million times, it’s popular as hell but the band makes no money and next thing you know they’ve given up and gotten jobs as paralegals.
It’s basic economics – if you’re not going to pay for it, it’s going to go away. Oh sure, the next wave of artists will come along and keep you in tunes because they haven’t learned the lesson yet, but there’s no artist development. You’re always listening to bands with potential, not bands who have realized that potential. The cumulative effect is one of leveling – the average keeps eroding.
So I try to approach music not only as a fan, but as an informed consumer with a long, big picture view. If I love Band X, I want to hear this album. I want to hear the next album. I want there to be a next album. And I try to make sure that I’m behaving in ways that make the second, third, fourth and fifth CDs more likely. Which means I tell everybody about it (I do that here a lot) and I try to buy as much as possible.
Today’s music fan has a buttload of options. You can buy at iTunes or eMusic or Amazon or CD Baby. You can stream from places like Pandora and Spotify. Or you can buy directly from the band. But from the band’s perspective, these are not all equivalent alternatives. In some of these cases, the band keeps a decent cut of the money, while in others you can listen to their latest disc a hundred times without them noticing. The chart here illustrates some of the differences graphically (although I find the math a little harder to follow than I’d like), but for an even more useful explanation of how it all shakes out, check this from Techdirt, where the band Uniform Motion details specifically what they earn from various distribution channels.
- If you listen to their record 100 times on Spotify, they get nearly three euros.
- If you buy their album on eMusic they get $2.60.
- If you download it from Amazon they get €4.97 – a 70/30 split (in their favor).
- iTunes also has a 70/30 split, so they’d get €6.28.
Of course:
That being said, it costs us 35 EUR/year to keep an album on iTunes, Spotify, and Amazon (105 EUR per year for all 3 of our albums!) so we don’t make any money until 24 people have bought a digital copy of the album on iTunes, or 150 single songs, or if we get tens of thousands of listens on Spotify! In most cases, it’s actually more economically viable not to sell the music at all.
They get a nice cut of whatever you pay to download from Bandcamp (it’s a pay-what-you-like model) and if you buy an actual CD from them directly they get €4.34 (after factoring in the expense of manufacturing and production).
This has implications for the most artist-friendly means of consuming. iTunes is the best deal, while simply surfing Spotify is the next best thing to breaking into their van and stealing their equipment. Now, I say this as a guy who uses Spotify a good bit. I’ve actually figured out how to make their service work in the artist’s favor, at least a little bit.
- I always want to sample before I buy, and Spotify is the awesomest sampling service in history. The band actually gets a penny or two here and there if we all use Spotify to shop.
- I have an eMusic subscription, although after looking at these numbers I may just kill it and move my cash to iTunes or Amazon.
- I buy one-offs at iTunes and Amazon already.
- And here’s the fun part. Once I have purchased a CD, I will listen to it not on my iTunes player, but on Spotify. That way the band gets the revenue from the disc purchase at the other site and whatever meager cut they get from streaming on top of it. It’s not much, I realize, but at least I’m trying.
I can’t tell you how to spend your money, but I do encourage you to think about all this. If your approach to music is to spend as little as possible, fine, but you need to understand that when a band you really liked calls it quits and goes to work waiting tables, you played a part.
It’s a very elementary application of the old economic axiom: you get what you pay for.
Image Credit: Audiolicious
Categories: Business/Finance, Music/Popular Culture, TunesDay
Progressive Culture | Scholars & Rogues 
Being a paid Spotify subscriber means that the label and/or artist gets more money from streaming rather than a free subscription (which pays out fractions of pennies for thousands of streams).
That said, if you really want to support an artist and hopefully ensure there’s a second (or third or fifth) album, go to their shows or buy a t-shirt. Those are bigger revenue streams for artists in this day and age than the music itself.
Thanks, Pete.
Frankly, I’d love to hear direct artist feedback on this issue, too. If you know anybody who might like to jump in with a more informed perspective than mine (and that would be a long list) send them this way.
I’m guessing the Spotify numbers assume you’re listening to a 10-song album 100 times to get to that 3 euro rate. Our mileage on Spotify has been $0.0049 (yes, just under half a cent) per song streamed.
Somebody is getting rich at Spotify and it clearly isn’t the bands.
Apologies in advance for another one of my long-winded tirades.
What if no one at Spotify is getting rich? My admittedly soft understanding of the situation is that for every new company that comes along, thinking it has a better way to monetize digital music, it receives a worse deal from the major record labels than the companies that came before it. In this way, the major labels make digital music more efficient, by stretching the competition ever thinner and sucking an ever larger percentage out of the next big thing.
Before vilifying Spotify, why not vilify the labels directly? Why not vilify Google? Google sells advertising for searches on bit torrents. Why not vilify Guitar Center and their ilk? They bilk money out of would be young rockers by creating the air that you’re always only one piece of gear away from making the big time.
Worse yet, what if there are no villains? In some ways, the state of music is better now than it’s ever been. Bands can create high quality recordings and play great sounding shows more reliably and cheaper than ever before. Bands still need style, but they no longer have to be as pretty as they were in the MTV days. Bands can get the word out about their music, connect with fans, and can get their music distributed globally, instantly, and with fewer middlemen. There no longer has to be any such thing as “hard to find” or “out of print”. And sure, bands don’t make money like they did in the heyday of arena rock, but God forbid, what if a lot of them are simply doing it for the love of the game? Would that be so terrible?
Make no mistake, I have plenty of vilification to go around. You never heard me say a nice word about the labels, did you?
What you say is true, but it would be good for everyone if talented musicians could actually make a living….
It’d be good if talented writers, artists, photographers, and journalists could all make a living too. The internet is a cruel mistress.
When it comes right down to it, it would be nice if I could make a living writing poetry.
NoiseTrade is another pay-as-you-like type service. You can download the music for free, and if you like it/decide to keep it you can pay.
I like your idea of buying the CD, then playing via Spotify to try and get the artists a little extra. I’ll have to start doing that.
Future of Music Coalition has a rather exhaustive list of music related New Business Models and if/how labels, performers and songwriters are paid. Includes breakdowns of digital retail, subscription services, non-interactive webcast services, as well as direct-to-fan, B2B licensing and advance project funding options. We also included services on the list that do *not* pay artists. This document was built to help musicians navigate this changing landscape and how the money flows, but also for music fans to understand whether and how their music consumption choices compensate creators.
Google spreadsheet here:
https://docs.google.com/spreadsheet/ccc?key=0AiuVS0lhwQsjdFBFMXRYVzZDck9IRGR3RVByOXVGcFE#gid=0
Blog post pointing to additional resources:
http://futureofmusic.org/blog/2012/08/22/new-new-business-models
Thanks, Kristin. This is great stuff and your org does fantastic work on behalf of artists.
Thanks Sam. Your blog post addresses a really important topic, so thanks for putting it together.
Artist here – I’d like to simply say it is great that this discussion is becoming more and more common these days. In my experience with streaming services, record labels, and downloadable content there are way too many middle men out there. Most of these new services do not help new artists. You have to sign up your music to this and to that and it wastes a ton of time and you get nothing even when you do get streams and downloads. There needs to be a culture where you discover an artist for no cost (I suppose Youtube is most common) and then a direct way to download/support (artist website/show). People think downloading legally on itunes is helping us. I’d rather you bootleg our stuff for free and come to a show. Honestly. We’d see a much bigger return than waiting for another laughable Itunes check.
I’d like to chime in on this as an indie recording artist. It’s refreshing to actualy hear people discussing and recognizing that artist need to make a living in order to keep making music. I struggle not to get discouraged when working on my next album. The question “Why am I doing this?” is constantly looming over my creative thoughts.
I will for sure, play and record music until the day I put my last breath into my sax, but to publish is another story. That’s the part were it turns to business and money has to go out with little hopes of recoup let alone profit.
Maybe with talk like I’m hearing here, there is hope after all…
My hat’s off to the TRUE supporters.
DC
http://www.pristinestudios.com/dennis_music.html
love this article!
I didn’t become a musician to sell t-shirts. There are a lot more profitable and efficient ways to start a t-shirt business. I believe the only reason people say that is because they’re in denial. You wouldn’t tell your doctor to go on tour and give medical advice/exams and sell his t-shirts to make money. But, that’s because you CAN’T steal his services on the internet. I also, find it funny that people don’t say this to creators in other media who are exploited just as much. It’s like, “Hey, Joss Whedon. Maybe you wouldn’t get cancelled if you took your show on the road and sold firefly T-shirts to pay Fox for the airtime.”
@ Peter: (I want to preface this by saying that performing live is what I love most about making music) That being said, I have been putting a LOT of work, time, and money into my EP. I want to present fans with the quality of music I would expect from the bands that I love.
From my viewpoint, there are basically TWO paths that lead to a band being able to make money from touring (where we can sell t-shirts n stuff that ppl seem to believe is how musicians should be making money these days). Path 1 = tour locally, then regionally, etc… Path 2 = make a hit record which hits hard enough to justify taking the band on the road. Allow me to outline the flaws of our current day and age:
Path 1 comes in 2 flavors. The first, for the lucky ones, is that you are well connected and are able to hitch a ride as an opening act for an already established tour. The second is that you basically Pay-to-Play until you’re able to grow enough fans in enough nearby markets to tour regularly (which most likely takes a few years). I say “Pay-to-Play” because the overwhelming majority of shows for relatively unknown acts don’t make any money, since it’s all draw based. But, in my case, I still have to pay the band members for their time and expertise (if you’re an equal partnership band you may not care about that so much). I still have to pay for what ever gas/food costs I incurred. And, given all the time it takes to write songs, book shows, rehearse the band, and actually execute the gig – I’ve LOST the money I could have made working somewhere else.
Path 2. Let’s forget about how hard it is, in any case, to create a record that will ‘hit’. But, let’s imagine you spend about $10,000 and you’ve got 1 or 2 really killer singles. You release them and they start spreading through social media. Now, you want to capitalize on that growth by touring and …selling t-shirts, apparently… A national tour requires a serious budget, and even more serious projections. Especially if you have no label support. You can really only book markets that you can guarantee will at least come close to breaking even. ***side note here, that I really don’t think many ppl who haven’t tried to tour before realize – is that in order to tour, you must leave your job and your paychecks behind. But, unless you want to come back homeless, you still MUST pay your bills while on tour.***
So, how do we determine which markets we can afford to visit? Sales. But, even though my cd is getting lots of blog reviews and college radio spins – I’m not seeing more than a few hundred, or maybe a few thousand sales over ALL markets. With the internet as accessible as it is, there’s very little indication aside from sales reports (and possibly Facebook fans – even though we all know how wishy-washy that actually is) as to where the people are that like your music and might actually pay for a ticket.
How can rational people justify such financial risk? Well, because we love music of course. But, as Sam points out, this is how many good bands end up “going out of business” and moving on to something that at least pays a living.
fikshun. I think the same applies to all artistic professions in their own way.
I’m really gratified to be hearing from working musicians and folks like FutureofMusic.org. Anybody who has paid even a little attention to what I’ve written here over the past five-plus years knows how deeply I care about music and artists. I hope you’ll share this thread with others and make sure that they know how welcome their input here is.
Hey Samuel:
Great post! I’d never come across your site before today – you obviously hit a nerve with Google on this one.
Anyway, I thought I’d chime in with another artist perspective. I’ve been an independent musician making part of my living with music for a bit more than a decade. During that time, I’ve never managed to get too worked up about people sharing/stealing my music, whether that was through P2P or whatever.
Before the internet, as a starving musician, I would never buy a CD brand new – always waited until I could find a used copy. The artist never made any money from that transaction either (though the independent record store did – but that’s a different argument…), so I guess I felt that file sharing amounted to basically the same thing.
However, part of the reason I was so blase about file sharing was that internet visionaries kept predicting that a new paradigm for musicians and music listeners was just around the corner, wherein fans would have an unlimited celestial jukebox to listen to, and musicians would get paid in direct proportion to the quality of their music. That sounded pretty good to me, so I just settled in to wait for it.
Now, of course, that future has arrived in the form of Spotify…and I have to admit to being just a little ticked off, because, as you’ve noted, Spotify’s payouts are so low that they’re statistically indistinguishable from zero for all but the most popular artists. Which means that they have taken the friction-free, listen-to-anything-you-want, the-musician gets-nothing aspects of the P2P experience, wrapped it up in an even more convenient interface, and legalized and legitimized the whole thing.
It was one thing for music fans around the world to be swapping my music back and forth without paying for it; it’s another thing for big companies to be building their businesses on the same economic model, while barely even giving lip service to the notion that the artists should be paid.
Don’t get me wrong – people who note that Spotify has a lot of value as a way to get people to discover an artist, and then potentially become a bigger fan and buy a CD or come to a show or whatever have a point – which you’ve kind of underlined by explaining the way you use the service (and thank you for doing it that way!).
It’s just that, if the end result of all the pressure that’s been building in the music industry since Napster to find a new solution that benefits all its stakeholders – labels, technologists, fans and artists – turns out to be Spotify? Well, that’s more than a little disappointing. Long road, little house.
Here’s hoping that their future roadmap is a little more artist-friendly than they’ve been so far (hint: let artists offer premium tracks for email addresses when a fan plays or likes a song, etc.).
Funny. I was just about to submit an article to Sam about how modern indie musicians should be a) extroverts and b) graphic artists. I agree completely. When did “I’m a loner artist who writes songs” turn into “please buy my t-shirts and beer coozies”? As performance art, I would pay top dollar to watch a poet hawk such wares at his/her next open mic night. Viewed from capitalism’s perspective, our trades have become nothing more than anchor points for Cafe Press-style ancillary merch whoredom.
I think there is a new model. Bands are now content with the old school blues model playing as much as possible in small clubs, or making music from home studios playing a gig here or there where they don’t depend upon the money from music. Music today that is popular has more to do with celebrity and corporate sales etc. Most of the really good bands now are regional, if not local that work during the day. The internet has changed the distro problem, but now there is exponential saturation. Hard to weed through without being “filtered” by some company.
Sam, Great topic here, and it is enlightening to know of groups, like Future of Music. In relating this to Spotify, and other digital sales for artists to make money, artists must cross so far over to keep track of every website and digital outlet, it can really be a killjoy. The new digital industry has become so thick in a very short time. If not mentioned already, perhaps the artists out there can hire or put on commission, “personal digital managers” taking place of the old artists manager, business manager, attorney, or accountant, once found at record labels. I do know quite a few artists who simply share, and give away their music, and are thrilled to find writers and djs who expand upon their efforts.
Hi Danielle, and thanks for commenting. I remain really skeptical of the “give it away” model, and while I’m not here to tell artists how to market themselves, I am a big fan of them getting paid for their work. So I keep thinking that there has to be a better way than that.
Meanwhile, I trust you’re working on a new CD for us?
Realizing this is an old thread, I was wondering what you thought of this: https://news.spotify.com/se/2014/11/11/2-billion-and-counting/?_ga=1.12219956.187596547.1406119140
This is great, but I know too many artists who make dick to get too excited.