Study: A Majority of Musicians Are Making $0 from Streaming Platforms

That was the big thud from a presentation by the Future of Music Coalition, delivered Monday at SF MusicTech Summit.

“Streaming services are not a significant revenue stream for musicians, yet,” the Coalition’s Kristin Thomson told a packed audience, with an optimistic emphasis on ‘yet’.  “There was hope expressed by interviewees that this would be a much greater revenue stream in the future.  But the survey shows that most artists aren’t seeing any money from streaming or it’s not enough to make a dent in their pocketbooks.”

Which looks something like this:

 

And, the ratio gets even worse for radio services like Pandora (ie, non-interactive streaming), which looks like this:

 

Instead, the real digital breadwinner remains iTunes, by a longshot.  “Overall, digital technologies seem to be having a positive impact on musicians’ earnings capacity,” Thomson continued.  “iTunes is the digital store that most musicians and managers we interviewed mentioned as being the most impactful.”

This is all part of a major research study by the Coalition, one that involved detailed interviews with thousands of artists (more details on the study and ongoing updates at money.futureofmusic.org.)  But the definition of ‘musician’ is actually incredibly broad: Thomson pointed to subsets like orchestra performers, Broadway pit players, and even session musicians, among others.  Which is why for many musicians, streaming really doesn’t make sense – in fact, digital sales platforms are almost entirely unimportant.  “There are plenty of musicians that make money through things that have nothing to do with technology or direct-to-fan,” Thomson said.

(this next paragraph was updated Tuesday afternoon; it reflects downloads not broader digital platforms as originally thought…)

And, perhaps inline with the broader finding on iTunes, here’s the breakdown for discrete download sales.  Still, one-third of those polled have never earned a dime from download recording sales.

 

46 Responses

  1. James

    It’s the 11% that don’t know that made me chuckle. They’ve certainly got their fingers on the pulse of their finances!

    • Visitor

      keep giggling when your artist contracts are deliberately designed to mislead them. and keep your digital packaging deduction too

    • James

      Wouldn’t happen to me. Artists really need to be more savvy than this.

  2. Visitor2

    Obviously, the majority of musicians also make shit music that no one gives a shit about. The majority of musicians aren’t making money on itunes either.

    • Spoken X Digital Media Group

      There really is such a thing as shit music ! I believe it was Yoko Ono that released a track on an album with the sound effect of a toilet flushing. I believe that track was licensed and probably worth more than the entire years you’ve been on your job. .

  3. Radio

    How much money have they made from terrestrial radio transmission of their music? Big Fat Zero.

  4. Visitor

    When would a session musician or a pit musician ever make any money from digital sales?!?!? Sounds like this survey is flawed.

  5. Jenn

    I appreciate the issues DMN decides to tackle, and love the spirit of debate, pro or con. I hope they will continue to pose questions that will align people on either side of an issue so the readers can discover the truth for themselves from its contributors.

    On streaming revenue, call it a crystal ball, but I predict there will be some new models popping up in less than obvious places that will bring real revenue to artists.

    Happy “excuse to indulge in chocolate” day everyone!

  6. David G

    These numbers are not very meaningful without some explanation. Who are the participants? how many where asked. How long have they worked as musicians? Has their main revenue stream ever been music sales? And so on and so forth.

    Any chance of some clarification on this?

    I watch sales and download reports daily, and there is a clear correlation between the two for our artists. An artist who sells also streams, and an artist who does not sell generally does not stream either. Studying this kind of metric is only relevant among artists who trade properly.

    The mere fact that 11% of those asked “did not know” indicates to me that the group asked might be slightly off

    • paul

      The Future of Music Coalition has just opened a page at money.futureofmusic.org that’s focused on this research initiative. That should offer more background, hth.

      /paul

    • Kristin Thomson

      Hi David

      The full details about the musicians and composers who participated in this research project are here:

      http://money.futureofmusic.org/about-the-artists-who-participated/

      And about the survey demographics in particular:

      http://money.futureofmusic.org/survey-snapshot/

      Those were part of yesterday’s presentation as well, but not included in DMN’s writeup.

      11% who don’t know. I don’t find that surprising, and I can think of a couple of reasons why.

      This is a complex world, full of new revenue streams with confusing names. How many musicians know the difference between an interactive stream and a non-interactive stream? We struggled a lot with terminology and defintions while we built the survey, and ended up including lots of references to the services in question, and points of reference about how the money might get to a person (example about royalties from the interactive streams of a sound recording: “This is money you’d receive from your label, or from an aggregator like CD Baby or Tunecore”). We also built a separate definitions sheet that people could click through to read if they were confused about terms. But, still, “I don’t know” might refer to the existing knowledge gap.

      It also might indicate that they don’t have access to that information. Perhaps this includes band members that simply receive a percentage of the money that flows through from their label, whether it’s from retail sales, digital sales or streams. “I don’t know” might be the answer that someone in that position might choose if they don’t spend time looking at their label’s accounting statement to them, or if they don’t have access to that info in the first place. Just a hypothetical, but I think there are at least a couple of reasons why “I don’t know” is a reasonable answer.

      Thanks for your interest!

      Kristin Thomson

      co-director, Artist Revenue Streams project
      http://money.futureofmusic.org

      • flawed

        Again, who are these musicians who completed the survey? Names please.

        On the streaming side, if MOG, Rdio, Spotify and Rhapsody have over a million paying subscribers collectively in the US and a portion of that 5-10M of monthly revenue from those sites get allocated to the labels, distributiors and aggregators, then where exactly is that money going?

        Maybe it might be better to ask Universal, Sony, EMI, Warner and then the Merlin members and all the aggregators like Orchard, CDbaby, Tunecore, IODA and the rest how much money was passed on to the artists…also, BMI, ASCAP and SESAC get a portion of that revenue and that goes to songwriters and publishers.

        This is more about how labels pay their artists, then whether or not streaming is a legitimate source of revenue. It obviously is. Maybe most of those who complete the survey don’t sell much, if any, physical copies of their music and not much more on iTunes, thus their streaming stats and revenue will be minimal at best.

        This is more about seperating the wheat from the chaff and that music isn’t an self-sustaining occupation for most not only from music sales, but most other revenue streams.

        • Kristin Thomson

          Survey participation was voluntary and anonymous, as is the practice with most surveys.

          You can read about the survey protocol here:
          http://money.futureofmusic.org/money-from-music-survey-protocol/

          You can learn about the demographics of the survey respondents here:
          http://money.futureofmusic.org/about-the-artists-who-participated/

          I think it’s important for readers to know that this research project covers a lot more — A LOT MORE — than the three data points that we talked about at SFMT. It examined about 40 different revenue streams, from mechanical royalties, to money from live performances, PRO royalties, merch sales, to income from being a session player on tour or in the studio. And, you’re right — sales is just part of a much bigger picture.

          There’s a list here:
          http://money.futureofmusic.org/40-revenue-streams/

          Given limited time at SFMT, we presented data about three that we thought were of interest to that community:

          – digital sales

          – interactive service payments

          – digital performance royalties for sound recordings

          But these are just tiny slices of what this research tells us.We have a lot more reports and releases forthcoming that will examine the data from other perspectives.

          And, perhaps, one of the most important “findings” from this work is not a data point at all, but a recognition that the US musician and composer community is large, diverse and specialized. There are many full time musicians working in the US right now for whom digital sales or streams is simply not applicable because they do work in which they are paid for their work in a dfferent way; salaried orchestra players, session players, composers who create jingles — the list goes on. We make this point every time we talk about it, but it’s important to say it again.

          The survey responses, in general, also underscore that the experiences for artists working in different genres and playing different roles (composer, recording artist, performer, session player) are very distinct. This data shouldn’t be a condemnation of any particular business model or of any musicians or composers working today. We simply need to remember that the community of creators is large, diverse, and specialized, and musicians participate in it through equally varied ways.

          To your point about labels’ role in this: totally true. This research was designed to not rely on data from labels or aggregators, but from musicians themselves. It’s about what ends up in their pocket. I think folks will be really interested to see the financial case studies we’re working on, which look a musicians actual bookkeeping records. There’s a sneak peek of one of them here on NPR’s A Blog Supreme we posted last October. More will be released a few months.

          http://www.npr.org/blogs/ablogsupreme/2011/10/04/141061716/how-do-jazz-musicians-make-money

          Thanks for your interest —

          Kristin Thomson

          co-director, Artist Revenue Streams project
          http://money.futureofmusic.org

          • flawed

            Voluntary and anonomous is fine, but if it is not a scientific sample, then your poll is worth crap.

            Unless you have a breakdown of artists by decade of when they recorded, varying artists by genre by marketshare, across various record labels and not overweighted by solo independent artists that release stuff on Tunecore or CDbaby and have no other impact in the marketplace, then this poll is crap, which is what it seems to be. You must look at the breakdown of the types of music consumed on these music services and poll the appropriate artists. If your sample has 20% dance music or folks artists responding, then clearly the results would be skewed. Especially when you offer prizes for completing the survey and did not proactively seek out respondants using the above methodology or another scientific way based on the subject of your poll.

            I know a little something about market research and this is clearly not. Unfortunate that this site published this hyped story and this organization claiming it’s poll has the least bit of accuracy.

          • MDTI

            Hi Flawed,

            reading your comments, I have the impression that you want to make a totally different study 🙂

            If you begin to add the criterias you talk about, the study would be as unreliable to draw conclusions and difficult to read.

          • David G

            Thanks Kristin.

            I look forward to studying this more closely.

            Cheers

            David G

  7. Bas

    It would be interesting to know what percentage of the sample has actually distributed their music to streaming services…

  8. The Templetonpeck

    I agree with one of the above statements saying “An artist who sells also streams…”.

    I can confirm looking at my own sales.

    Over the last 180 days, I can see an (almost) exact correlation between sales and streams.

  9. Scott

    I Made a whopping $.05 between Rhapsody and Soptify last month. Money is Money.

  10. HA!

    Allow me to sum up the amazing business proposal from the S.Valley mafia:

    “Give me your content for free or someone will steal it on p2p”.

    Makes total sense.

  11. @makno

    Les vrais artistes ? Ceux qui ont répondu “I don’t know” à toutes les questions

  12. benstauffer

    Paul, the last slide can’t really be all that surprising, if for no other reason than those with label deals probably haven’t recouped and so wouldn’t be receiving any cut from interactives like Spotify or from downloads anyway. Also, I think a lot of unsigned artists (albeit based on a small sample I’ve talked to) don’t have any clue about registering with SoundExchange and don’t actively follow up on missing revenue streams. If when they answer this question, they’re including mechanicals on the pub side, that may be a different story, but again, many know nothing about registering with a PRO, what HFA is, etc. I would want to see some info first on how many of those who answered “NO” have this education/label deal.

    • paul

      Come to think of it, I should update that part as I thought it was referring to something far broader (ie, all digital platforms). You are right, it’s not really that surprising if it just refers to discrete sales.

      /paul

  13. Dalton Priddy

    When Big Data, (Google, YouTube, Facebook and all the two bit music services), piggyback on creative content(both legal and illegal) making billions in the process while the content holders fight like bottom feeders for crumbs, this whole model of music distribution is on pare and shadows the corruption of Wall Street Bankers who sell and repackage content in complex forms for their own greed.

    Creative content creators would be better off building their own websites with buy now options.

    Creative accounting by these freeloaders will continue as long as know one stands up.

    When Google last year paid $500 million to settle with the FEDS on illegal drug sales without admitting guilt, hoe do you think they would have to pay for allowing creative content to freely flow through their servers worldwide.

    Wake up..

  14. Jeff Robinson

    I’m glad Future of Music took this on. I had conducted the Musician/Engineer Survey 2009 and broached some of those questions. The focus of the Musician/Engineer Survey was more about experience level and folks wearing both hats. Around 700 respondents from New York to Los Angeles filled it out as well as folks in Europe.

    Use the next/previous button to get through the responses. There were a handful of general questions, then folks were weeded out based upon their roll in the industry. Only musicians and/or musician/engineers were allowed to complete this:

    There were income related questions and the average income level for a professional (paid) recording engineer was $23,000.

  15. nick

    every artist on pandora gets paid by soundexchange, so including artists who would never be played on pandora in your chart really skews the data, doesn’t it?

  16. Ken Dardis

    That anyone would expect a survey of this nature to be exact is a little over-the-top. It’s a guide to show the level of inactivity produced on the sales side, relative to this new arena of streaming.

    I run a very small indie artist site, along with one that caters to online radio stations. I’m disappointed in how little money is flowing to artists but that’s the reality of this new world of internet exposure. There’s simply too much product, amid demand that’s scattered across far too many genres.

    To whoever it was who suggested an artist set up their own web site and sell from there, good luck. It’s not being on the internet that matters, it’s being found online which is terribly difficult. Then, if found, prying money from a consumer’s hand for music today is proving to be nearly impossible. Stating you produce “quality” music that anyone would be proud to own is subjective, and moot.

    Instead of criticizing the survey’s authors artists must understand that nobody is making money except the big companies – and that’s the way it’s always been. (I used to be involved with the studios in Muscle Shoals, AL in the 70s, so I’ve been around awhile.)

    The one question I’d like to see discussed is how artist payments should be calculated; For a station (or music web site?) to play Coldplay, it is an audience draw. But, when the same station plays an unknown artist it’s taking a chance on losing listeners. Should both music groups be paid the same royalty fee?

    Sadly, there are still a lot of hurdles for musicians – and it’s not going to get better because of ranting things are bad.

    Ken Dardis
    President,
    Audio Graphics, Inc.

    http://www.RadioRow.com
    http://www.AudioGraphics.com

  17. streammyass

    Streaming sites are not designed to make money for the artists.

    They exist so that the owners can make money from subscriptions. i.e. Look at who actually gets paid from the subs at Spotify. All the major labels are included. The owners of the sites are making money off YOUR music and not passing any of that money on to you. That’s why they are being pushed so hard.

    imatch is the worst yet for royalties.

    “But some money is better than none… right?”

    Absolutely not. Think who it is that is saying that garbage.

    Take control of your music.

      • streammyass

        Or……. I sound like a musician who’s fed up with other companies trying their best to control my music, make money on it and do their best to convince us that it’s a good idea when it clearly isn’t in our best interests.

        Oh, and by your response, can I assume you are Lee? Or is it Matt? Just sayin.

  18. cipher

    Have been in the music business a long time and it has always been……

    a few musicians make plenty of money

    some musicians make some money

    most musicians make no money.

    Maybe in the digital world making money from music has got buried in the technology. Stream it and dream about it but if you think you are going to make money from it …forget it.Want to make money from music…teach it.

    cipher.

    PS..The above is for the average musician…If you have great talent…work your backside off…have a great promoter and with much luck there might be money… but don’t bank on it.

    • TheBiggerTool

      Cipher, you’re absolutely right. And the ones that are making a lot of money are not always the most talented. It’s has always been that way & always will.

      I’ve been one of the group that makes some money my whole life. No record deal ever, but I used to make a living at it. Not now. Ther are more ways than ever to get screwed as a musician – it’s a yin & yang thing. The more ways there are to earn money, the more there will be to get screwed.

      Finding music today is no longer like finding a needle in a haystack. It’s more like someone trying to find a needle of a very specific length & diameter in a stack of randomly sized needles that is 1,000 times bigger than the haystack. We gotta take our needle around to people & help them find it instead of waiting around for them to dig through the needle-stack.

      By the way, to the whiners – this was a poll, not some super scientific study. Look at the info & consider whether it can be useful to you or not. Or go do your own freakin’ scientific study. Good grief.

      And one last “by the way” – I did not participate in the poll, but I do earn money from streaming. Pennies, but I get ’em every month. I also earn from SoundExchange. Hundred dollar bills (actually the direct deposit equivilent), and I get a small handful every quarter. And I sell CDs at CD Baby, Amazon, BandCamp, and several other sites every single week. Same with iTunes & other digital download sites. FWIW.

  19. sam @ Projekt

    >Have you ever earned any revenue from the digital sale of your recordings? Yes: 62% No: 33% I Don’t Know: 5%

    I filled out that survey. It covered all sorts of working musicians. So I am guessing that some of the people who say “No” could be studio musicians or symphony musicians. People who are paid a one-time rate, rather than a cut of sales.

    And you know what? They probably earned more getting a day rate, then they would have with a miniscule cut of royalties.

    Sam

  20. @rondavismusic

    For musicians’ finances: Rdio and Spotify bad, CD Baby and iTunes better.

  21. @gavincastleton

    Shocking study about streaming music revenue for artists. Oh wait. Not shocking at all.

  22. Bob

    Paul McCartney just pulled out of Rhapsody. Anyone out there enjoy more leverage than a Beatle?