Thankfully, this isn’t one of the music industry’s problems (yet).
But these are (sorted by category):
Recordings.
1. Overall recording sales continue to decline, pretty much every year.
2. Digital formats continue to grow, but not enough to overcome broader declines in physical CDs.
3. Vinyl continues to grow, but remains a tiny niche compared to broader album, download and streaming sales.
4. Streaming continues to grow, but potentially at the expense of more lucrative downloads.
5. A-la-carte downloads continue to grow, though the broader impact on CDs has been disastrous.
6. Post-album, labels have failed to establish a lucrative, reliable bundle to monetize their recordings.
7. Most consumers now attribute very little value to the recording itself, and most consumption (through YouTube, ad-supported piracy, or BitTorrent) is at little-to-zero cost.
8. A generally lukewarm and uncertain economic climate only adds to consumer resistance against paying for music.
9. Important artists that were largely developed by major label investment frequently leave the major label system. In the case of Metallica, they continue to enjoy substantial profits after these deals are over. Or, in the case of Amanda Palmer, catapult to much higher success.
10. Other times, artists refuse to deliver new material to their labels, even under contract. Or, they demand a contract renegotiation once successful.
11. Labels, which create and develop the content, often have little control over its subsequent distribution. For example, labels will often pay (in one form or another) for traditional radio play, while radio station conglomerates reap the advertising benefits and pay nothing in recording royalties. They also determine when to add or drop these songs.
12. Traditional record stores have largely imploded, with holdouts like Amoeba now relics of an earlier era. And for the chains that have held on, the picture is grim: HMV, for example, is soiled in bad debt and bait for vulture investors like Apollo Global Management.
13. So-called ‘big box’ retailers like Walmart often have strikingly-small music collections, often with heavily-discounted discs (ie, $5). This compounds the downward spiral on CDs by lowering availability, even though older demographics are often still receptive to the format.
14. Major labels never quite pivoted, forcing extremely uncomfortable mergers, continued losses, and an aversion to signing risky bands or trends. That includes the recent acquisition of EMI by Universal Music Group, which featured heavy concessions and ultimately, a very questionable valuation.
15. Most artists, understandably, have very little trust in major labels. And oftentimes, outright anger for them. All of which makes it difficult for labels to rally artists around their goals and agendas, or engage in collaborative, experimental, or more flexible deal structures.
16. Oh, and labels frequently forget to pay their artists, thanks to highly-complicated and deliberately-opaque accounting practices.
17. And when they do decide to pay their artists, it’s typically in paltry amounts. For example, try 8 cents on a 99-cent download, for starters.
18. And thanks to heavy financial pressures, the creative process at major labels has become increasingly formulaic, overly refined, and often unsatisfying to the artists involved.
19. A large number of legacy artists are now suing their major labels, arguing that downloads should be classified as ‘licenses’ instead of ‘sales’. And, thanks to a monumental victory by F.B.T. Productions, this shift will create a massive financial obligation for labels.
20. Most people who work at major labels have very low job security. Which makes it difficult for them to develop longer-term artist careers, while also making it difficult for the signed artists themselves.
21. Instead of enjoying some theoretical resurgence, indie labels are mostly getting squeezed by devalued and declining recordings, piracy, and far greater leverage from artists themselves.
22. A once-promising shift towards 360-degree models never quite generated enough money for major labels, even though major labels generally insist on broader rights deals with all new artists.
Touring.
23. The average consumer goes to just 1.5 shows a year (per Live Nation). Songkick’s Ian Hogarth pegged that number closer to 1.
24. Ticket prices to superstar shows (ie, the one or two shows that people actually want to attend) often soar into the hundreds of dollars. This is often pumped by an aggressive and/or rigged secondary ticketing market.
25. And, because fans are paying so much for these one or two shows, there’s often heightened expectations and demand at these shows. Which means, a lot more pressure for the artists and everyone else involved.
26. And, the secondary ticketing market is often fed before the actual market, thanks to bots, aggressive scalpers, or the artists and ticketing providers themselves.
27. Fans frequently miss shows from their favorite artists, even when these artists roll into their hometowns.
28. But wait: despite an onrush of apps and services like Songkick and Bandsintown, attendance at shows hasn’t really increased.
29. And despite rhetoric to the contrary, touring is actually extremely difficult and expensive for most artists. Even for more established artists like Imogen Heap.
30. Meanwhile, service fees continue to outrage fans, even though artist guarantees and advances are often a culprit (but it’s complicated…)
31. Classical orchestras and ensembles continue to struggle, thanks to a continuing problem invigorating younger audiences. That has forced lots of smaller-market orchestras to downsize or discontinue, while applying plenty of pressure to bigger-city orchestras as well.
32. Merch table CDs, once a very solid source of on-the-road revenue for developing bands, has now basically evaporated.
Startups.
33. An extremely high number of music-focused startups fail, even those that aren’t reliant upon major label licenses. It’s almost a death trap.
34. Oftentimes, specific sectors of the startup space are wildly oversaturated. That includes the artist DIY space, which still has fresh entrants despite numerous overlapping competitors and heavy concentration among leaders like ReverbNation, CD Baby, Bandcamp, and TuneCore.
35. In the case of digital label services, oversaturation and tepid consumer demand for the end product has forced consolidation. That includes the Orchard, which has swallowed competitors like IODA and Iris Distribution. Which has also led to layoffs.
36. Unfortunately, artists seem mostly hesitant when it comes to the purchase of higher-end DIY offerings like analytics packages. Part of that is rooted in tight budgets, though the irony is that artists frequently spend thousands on gear like guitars and amps.
37. Startups that are reliant upon major label licenses typically have trouble establishing a meaningful and sustainable profit level. In fact, that is a continuing concern for one of the most well-financed music startups today, Spotify. Others have crashed-and-burned in tragic ways.
38. Many investors, including David Pakman of Venrock, have decided not to invest at all in music startups based on licensing issues. Others, like Union Square Ventures, have decided to largely avoid financing startups that rely on expensive label licenses.
39. Even the largest music companies (far past startup phase) have difficulty launching in foreign countries. That includes iTunes, Spotify, and VEVO, thanks to a maze of licensing pitfalls and complications. That makes global scaling difficult.
40. The music startup space often falls victim to fantastic bubbles that quickly pop. That includes ad-supported downloads (ie, Spiralfrog), ringtones, anything Long Tail, and full-track OTA downloads (and many things mobile music). In the current environment, it might include tech-based, algorithm-oriented discovery.
41. Even highly-successful startup concepts can enjoy a very short shelf life, thanks to incredibly fickle and distracted audiences. The best example of this recently might be Turntable.fm, a company still struggling to regain its peak from the summer of 2011.
42. Acquirers of hot startups often suffer from buyer’s remorse, thanks to a gross misread of the value proposition and long-term prospects. CBS’ $280 million aquisition of Last.fm sticks out as one example.
Artists.
43. The artist has greater and more direct access to fans than ever before in history. Unfortunately, so do millions of other artists.
44. Indeed, the typical music fan is flooded with music, not to mention videos, games, ebooks, and porn, all of which makes it extremely difficult to win and retain the attention of future fans.
45. This also puts pressure on the artist to shorten the release cycle, and pump out content at a quick pace.
46. The artist currently lacks a centralized hub online that is a default for music fans, thanks to the erosion of MySpace Music. Facebook was once viewed as a replacement for MySpace Music, but has since steered heavily towards OpenGraph.
47. Incidentally, Facebook’s shift to OpenGraph also caused serious problems for a number of band-focused startups, most notably BandPage and FanRX, among others.
48. 99.9% of all artists cannot make a living wage off of their music, based on stats gleaned from TuneCore.
49. In fact, David Lowery, a top thinker in the space and an artist himself, feels that artists are worse off now than they were in the analog era. And, he points to lower payments, less control, a shift in revenue towards tech companies, and less secure copyright protections to prove his case.
50. Most artists are overwhelmed with tasks that go far beyond making music. That includes everything from Tweeting fans, updating Facebook pages, managing metadata, uploading content, interpreting data, managing Kickstarter campaigns, and figuring out online sales strategies. All of which makes it harder to smoke dope backstage, and enjoy one’s groupies.
51. The average musician is underemployed. According to a musician survey conducted by the Future of Music Coalition (FMC) earlier this year, just 42 percent of musicians are working full-time in music. The rest are complementing their music with day jobs that have little or nothing to do with music.
52. Musician salaries are low. Also according to the FMC survey, the average musician makes $34,455 a year from music-specific gigs, with overall incomes (music+non-music) averaging $55,561.
53. Musicians are increasingly playing free shows, in the hopes of getting paid work down the line. According to a recently-released report from the UK-based Musicians’ Union, more than 60 percent of artists have played at least one free gig in the last year.
54. The idea that artists can survive off of non-recorded assets and experiences remains speculative (at best). That includes everything from “selling t-shirts” to playing in-person concerts for big bidders. It doesn’t seem to be paying the bills.
55. Even monstrously-large video superstars like OK Go can have trouble generating significant revenue (based on their own admission). And, big sponsors like State Farm can only attach themselves to so many videos.
56. Artists live under the constant threat of leaks, especially popular artists. The worst result is often the leak of an unreleased, half-baked recording, an issue recently experienced by both Skrillex and Ryan Leslie. For both, the thefts significantly disrupted their creative processes.
Publishing.
57. Music publishing, once thought to be insulated from digital disruption, continues to experience marked declines from mechanical licensing (based on imploding CD sales).
58. Actually, performance royalties are also getting disrupted as well. Societies like ASCAP and BMI are suddenly facing a huge threat from direct licensing technologies, with mega-publishers like Sony/ATV leading the charge.
Radio.
59. Traditional radio tends to play the same 14 songs in heavy rotation, with mind-numbing regularity and lots of commercials.
60. And, this repetitive playlist is often cloned throughout the United States, thanks to formatting homogeneity and heavy ownership consolidation.
61. Even worse, a lot of listeners don’t seem to mind. Which means very little music actually gets into rotation and discovery becomes harder.
62. Traditional radio doesn’t pay for the performance of recordings. And, if they’re forced to, they’ll probably play fewer songs, or sign more direct deals with labels like Big Machine Records.
Internet Radio.
63. Songwriters are increasingly getting screwed by digital formats, most notably, internet radio. In one disclosure, songwriter Desmond Child reported more than 6 million plays on Pandora for “Livin’ On a Prayer,” only to receive a check for $110. Ellen Shipley, a songwriter whose biggest hit was “Heaven Is a Place on Earth,” received $39 for more than 3.1 million plays.
64. Yet Pandora, the largest internet radio provider, still can’t make a consistent profit.
65. Which is why Pandora’s stock is in the crapper.
66. But that hasn’t stopped Pandora executives like Tim Westergren from cashing in tens of millions in stock. Which compounds problems #65 and #70.
67. Oh by the way, almost every other music stock is also in the crapper (including traditional radio stocks).
68. And, Pandora still can’t effectively license in most countries outside of the US. Most notably, that includes the UK (though the company recently found a way to enter Australia and New Zealand).
69. But this isn’t just Pandora’s problem. Others, most notably Last.fm, have been severely curtailing their internet radio services based on licensing costs.
70. All of which is why in the US, Pandora is asking Congress to lower the royalties it pays to labels (via SoundExchange). But artists already feel like they’re getting screwed, which is why they now hate Pandora.
71. And, the royalties that are being paid to SoundExchange often end up in massive, unpaid piles. That is, hundreds-of-millions-large piles of unpaid collections. Which of course, SoundExchange doesn’t like to talk about but collects interest on.
Streaming.
72. Streaming services like Spotify offer very little transparency on their payout structures, which makes it a low-trust partner for artists.
73. Indies and smaller artists also complain that their rates are lower than bigger, major labels. Some have pointed to different tiers of compensation, though few have a concrete idea on exactly how payouts are structured.
74. Payouts to artists are not only hard to figure out, they are almost universally low. Which is why artists like Rihanna and Taylor Swift have opted not to license Spotify. And why Taylor Swift’s label, Big Machine Records, has indicated that no future, frontline releases will be licensed to Spotify.
75. Spotify actually pays the labels, often with huge, multi-million dollar advances attached. But labels frequently don’t pay their artists, either for legitimate (ie, the artist is unrecouped) or illegitimate (ie, they’re screwing the artist) reasons.
76. The number of people actually paying for streaming services remains quite low, at least compared to the broader population of music fans. That could change, though YouTube remains a massively huge, and free, competitor. In fact, YouTube listening volumes absolutely eclipse those of Spotify.
77. Downloads remain a more lucrative purchase for artists (and labels), despite rhetoric indicating otherwise. Sorry, most fans aren’t streaming songs thousands of times, even on their favorite tracks.
78. The priorities of streaming services like Spotify skew towards acquisitions, IPOs, and other liquidation events, not towards the interests of content holders and artists. And if you doubt that, just ask Goldman Sachs (a $50 million Spotify investor). Which means artist payout issues may improve somewhat, but probably not dramatically.
Piracy.
79. The DMCA, once considered a reasonable method for flagging and removing infringing content while protecting online companies from liability, has now become an unmanageable and dysfunctional process for most content owners.
80. Even worse, the DMCA has become a highly-profitable, aggressive, and artist-unfriendly loophole for companies like Grooveshark.
81. Even Google, perhaps the greatest beneficiary of the DMCA, is now complaining. The search giant is now getting flooded by nearly 3.5 million takedown notices a week, causing Google legal director Fred Von Lohmann to oddly question its fairness.
82. Yet Google also remains a huge part of the problem. Searching for torrents and pirated material is not only easy, it’s frequently auto-completed for the user in Google’s searchbox.
82. The RIAA, a group with only limited success fighting piracy and more powerful tech, radio, and other lobbies, remains a questionable luxury for labels. In fact, top RIAA executives like CEO Cary Sherman are still somehow pulling multi-million dollar salaries from their major label constituents, despite questionable effectiveness.
84. The RIAA has also burned endless amounts of money chasing defendants like Jammie Thomas, who is challenging a recent fine of $222,000 for downloading 24 songs to the Supreme Court. That case is now more than 7 years old, with a near-zero impact on file-sharing and piracy levels.
85. Enter iTunes Match, which is offering to upload user collections for a modest yearly fee. That sounds great, except one concern is that Apple is effectively validating and granting amnesty on massive collections of illegally-downloaded music.
Music Conferences
86. Music conferences are often expensive, both in terms of time and money.
87. There are also too many of them. Which is why music conferences frequently repeat the same information, over and over again.
88. Music conferences are sometimes held in far away, difficult-to-reach places, and last for days. Which also means that music conferences can be giant distractions from work that needs to get done back at your office.
Headphones
89. Headphones are great, and the world has progressed past the white earbud. The only problem is that lots of users are blasting them non-stop, with little regard for near-certain ear damage ahead. Which is why numerous reports continue to ring the alarm on future hearing loss.
The Environment
90. One thought is that digital formats and cloud-based access is an environmentally-friendly step forward for the music industry. But some environmentalists theorize that the digital transition may actually be more damaging to our Earth. Part of the reason is that cloud-hosting requires massive server facilities while comsuming massive amounts of energy and pumping out lots of waste.
91. On top of that, digital formats only coexist alongside physical devices like iPads, iPhones, laptops, and sophisiticated headphones, all of which gets thrown away and replaced after a few years (or shorter).
92. Other, more traditional music assets, like vinyl, t-shirts and merchandise, are also damaging to the environment yet a major revenue focus for artists and labels.
Education
93. Conservatories and music schools like Berklee charge exorbitant amounts for their programs, though post-graduation job and income prospects are generally dim. Indeed, the cost of attending Berklee College of Music for one year is $62,319, according to the school, which is actually on-par with institutions like Julliard and Oberlin.
General Disruption & Misguided Thinking
94. Most of the innovations upsetting the music industry are coming from the outside, typically from Silicon Valley. That includes everything from Twitter to Facebook to apps to the MP3, with the industry typically scrambling to adapt or otherwise keep up.
95. The Long Tail may have minted Chris Anderson a lot of speaking fees, but it never quite panned out in reality. Instead, rankings like the Ultimate Chart are clogged with heavily-promoted, mainstream acts like Katy Perry and Pitbull. And, that goes for top rankings across platforms like iTunes, YouTube, and Spotify, as well.
96. The concept that great music naturally finds its audience seems elegant in theory, but is ultimately unrealistic. Buried gems remain in the digital era, while the most successful artists still seem to be those with the best backing, team, or combination thereof.
Miscellaneous
97. Established music companies often overpay their executives by a wild margin, despite massive and ongoing losses. That may have the effect of skewing the executive focus towards personal enrichment, while sending red flags to investors. Glaring examples of this include Warner Music Group, Live Nation, and Pandora, among others. The RIAA also suffers from this convoluted compensation problem.
98. Facebook Likes are often useless to artists.
99. Very few music companies actually make a solid, consistent profit.
I should probably comment on number 72.
Spotify is totally transparent on its payout. At least with our company all the artists can see exactly how much each stream paid them. The calculation is not simple but the result per stream is always there for the artist to see.
Just sayin`
Are the payouts as piddly as we’ve been hearing? I’m often seeing nearly 1 penny a stream. At a million streams, the payout would seem to be significantly better than what some artists have described in this list!
the payouts are largely dependant on the deal the artist has with their label. different labels will have negotiated different payout models with Spotify. the label then gets paid. then the label decides how much to pay the artist based on their contract with them.
i’ve seen several blog posts from artists annoyed witth the cheque they ultimately get from strreaming services. From the figures they post, they almost always point to the artist not understanding what they’re being paid for, or why they’re being paid that amount. Ultimately, the artist needs to look at their contract with the label and see how much of a cut the label is taking. If they’re that unhappy with how much is coming from Spotify to the label, then to them, they always have the option of pulling their music from Spotify if they truly believe they’ll be financially better off without those plays racking up…..
“Spotify is totally transparent on its payout”
Yeah, no mysteries there.
Everybody knows they don’t pay.
80% of that list can be attributed to just three things:
1.Piracy
2.Piracy
3.Massive Unfettered WOrldwide Corporate sponsored, organized crime, easy-money PIRACY!
How did this comment from 2002 come to get here?
Those who pirate therese days, when it takes 1 second to find a song on youtube/spotify/wherever without, wouldn’t spend any money on music anyway.
If more people play music more often than ever in human history yet the business doesn’t know how to make money off that, that’s only business’s incompetence. Maybe if they stopped writing such comments ten years ago they’d be better now.
Piracy is still a major problem. The low payout rates on Spotify, Youtube etc are arguably the effects of piracy’s devaluation effect on music as well. Spotify even uses that argument to justify their low pay-outs, as in “Be grateful someone is paying you something pathetic, rather than just stealing your music”, which always sounds to me like a mugger saying “Be grateful I only took your wallet, and didn’t kill you too”.
As an aside, one example of a small but influential group who used to spend a lot of money on music: DJs. (Disclaimer: I am a DJ myself, but I do buy the music I spin, except for that which comes from legitimate promo pools and such). Professional DJs used to spend substantial money on music. When I was DJing vinyl, I would spend at least $200/week on new vinyl. Now I spend $30 or so per week on new tracks from Beatport, emusic, etc and DJ from a laptop. Many DJs do not buy music at all, but just pirate most of their massive collections, which otherwise would have cost them thousands of dollars to amass. Even worse are “fans” (and other DJs!) who ask if they can copy your entire hard drive.
– V
there is a knock on effect of that though, and that is that dj’s are paid less now from bars/clubs/promotors, who know that the DJ doesnt need to spend $200 or £100 per week on new vinyl.
So dont think for a minute that the DJ is the big winner in all of this.
PH
The avg DJ (and there are a lot of them), stopped being ‘influential’ in the 70’s.. (there are exceptions of course but its a very small percentage)
If more DJ’s starting breaking new music (like they did in the past) instead of just playing what the ‘radio’ says is popular, maybe DJ’s would be a lot more relevant in this age..
but then (on the other hand), most new artists are not thinking that an AVG DJ would promote their music, so they dont consider it as a viable promotional avenue..
Maybe the primary problem with the “Direct 2 Fans’ approach is that the DJ has been left out of the equation.. Who since the 50’s helped funnel and popularized the influx of new music..
(just thinking out loud)
🙂
Awesome comment 😀
“If more people play music more often than ever in human history yet the business doesn’t know how to make money off that, that’s only business’s incompetence.”
Awesome comment.
Like blaming the car industry for not making money from car thieves.
If it took 2 seconds to steal the car then it would be the car industry’s problem to fix it.
Honestly, are you really trying to compare the theft of a ton or more to copying digital data? First of all, because of the lower cost of music compared to an auto, the laws can’t be as initimidating. Second, it’s not easy to catch someone sitting in their home illegally distributing music as it is with someone smashing a window out in the street.
For a while the music industry tried to come up with schemes to protect musical data from being copied, but then consumers complained. The labels don’t want to alienate their customers, and no one wanted to cast the first stone.
That issue was complicated by the following: When you buy music are you buying the content bundled with the medium or have you abstractly purchased the right to a copy of the content and to copy it from medium to medium?
When all we had was vinyl, there was no issue. But as mediums change with shorter lifespans, no one wants to have to keep repurchasing the same content. On the other hand, when the medium allows copying, there’s no way to prevent someone from sharing with their friends, or worse, storing it on a public server so that it’s free for all.
If anyone thinks they have a solution, please bring it up.
not too many fingers pointing at the megamillion dollar software industry driving this conversation.
“The Music Industry Has 99 Problems. And They Are…
80% of that list can be attributed to just three things:
1.Piracy
2.Piracy
3.Massive Unfettered WOrldwide Corporate sponsored, organized crime, easy-money PIRACY!”
Agree — and most of the 20% can be attributed to streaming.
Prove to me that anyone who downloads music for free would have bought it anyway.
Never once has anyone been able to provide this metric to backup their strawman argument.
I really would like to see your references and some figures.
Is it posisble to provide a slightly more in depth article?
Certainly. You’re right, this article does not have citations and footnoting, etc.
Can you tell me which you’d like me to defend?
This is why I’m taking a break from music.
The good news about the music industry just never stops.
“#98: Facebook Likes are often useless to artists.” Yup.
So sad. Although I’m not contributing negatively to no 23)
a humble solution for musicians:
Here’s an “Out of the Box” theory that just might work.
Backstory: Musicians and music itself have been the fodder for “The Music Business,” throughout our lifetimes. Musicians didn’t have enough traction in the business equation to change things, till now. It seems the only way the music industry changes is by following the public’s behavior. Examples: The British Invasion, Woodstock, Punk, Grunge, and Hip Hop were all tiny movements till the music industry stepped in and incorporated the artists and sold them to the public. The latest movement, ”Free Music,” has stumped the traditional business because there’s no new music to market to the public. So the current music business, with nothing profitable to market, is focused on selling their old music in as many new ways as the technology industry wants to pay for. As has been proven recently, this benefits established brands in music, but doesn’t seem to help anything new.
Premises:
1. “Finding a needle in a haystack” approach to discovering new music is outdated and with the number of labels getting smaller, so is the number of needle hunters.
2. The number of people creating music has increased dramatically.
3. There is no new music thinking from traditional media outlets.
4. The only people who are going to change music is the musicians.
Solution: Musicians need to put their $ where there mouth is, and they should buy new music directly from each other. If every musician bought one CD directly from another new artist, and then spread the word about this purchase to everyone they knew, musicians might level the playing field. That’s right I’m proposing a chain letter approach so musicians could promote music effectively.
A typical chain letter consists of a message that attempts to convince the recipient to make a number of copies of the letter and then pass them on to as many recipients as possible.
The “Music Chain Letter” should contain a link to the CD that the musician has just purchased directly.
The musician should explain why the purchase was important.
The letter should include a link to the artist’s web page.
The letter should include a link to a digital download opportunity. For most artists that’s direct $ to them as well.
No curse, but if you want to change the music scene, please email this letter on to any musician you know.
This seems simple, but it might just chnge the equation for the better.
Quote “That’s right I’m proposing a chain letter approach so musicians could promote music effectively.”
*shock*
umm.. ok..
*backs away from the crazy person*
*thinks about it*..
guess it aint any crazier then some of the other comments I have read 😉
I’ll give you credit for trying, but musicians making good money don’t need a new strategy.
The ones working a day job have the following problems:
1. Don’t have time to listen, find the good material and write reiviews. They need to work, compose and practice.
2. Aren’t going to affect the market. First of all, even musicians have different tastes, so while musician X lauds one new act, musician Y may diss them.
3. Audiences have their own tastes. Because a musician recommends an act, doesn’t mean any particular non-musician will like it.
4. Should all musician’s become reviewers? Remember, there are more people making music than ever before. All this would add is yet more verbage to muck through before you even get to the music.
5. Even if you could convince all musicians to pay for music (which I doubt can be done), the fundamental problem of piracy is so prevalent, I can’t see why the public would suddenly choose to pay for music when they can get it for free.
What you’re suggesting is a no-win zero-sum game, where either:
A. Musicians buy CDs from other musicians in equal quantities of each other, and therefore make no profit, as the money they receive from a CD purchase will go towards buying the CD of the musician who bought their CD, so they either break even or (more likely) are out the cost of the CD and recording, and therefore are even worse off than if someone had downloaded their music, or
B. Musicians realize they can get ahead by selling more CDs than they buy, and good old fashioned greed gets in the way. As there is now, there would be no incentive to purchase another band’s CD, this time because there is either real or perceived competition between bands to sell more CDs in order to actually turn a profit.
I’ve traded CDs with other bands before, and it’s great, but it’s not going to change anything. You get a free CD of another band (which may or may not be very good) for the price you paid to manufacture your own CD. I would much rather just send them the MP3s to do with what they wish. It costs me nothing if someone downloads my music, and I’d rather have people do that than to spend hundreds or even thousands manufacturing CDs that nobody will buy, lest it be another band who just wants me to buy their CD as well.
The music industry, or the part of it this seems to describe, is a technologically outdated scam that’s currently pumping a mix of Top 40s and 60-year-old Christmas songs into my head through my neighbors’ wall. I hope it gets utterly destroyed by “problems” like nobody wanting to buy stuff anymore and real artists being able to sell directly to their fans. Nobody is endangered by these problems except for middlemen and people with bad taste who don’t know how to buy songs that have been out for 20 years.
sorry, I meant “buy this stuff,” as in major label stuff, not “buy stuff.” Lots of people still buy music, maybe they just don’t buy enough of it for someone to pay to play it on every ClearChannel station.
Problem #100: Articles like this one. In particular, your apparent (subtle) bias and stereotyping against working musicians like myself. (Less time to smoke dope and enjoy their groupies? Thousands of dollars on guitars and amps? Get real.)
Quote ” bias and stereotyping against working musicians like myself. ”
for every pro there is TONS of amatuers who fit that “stereotyping” dead on..
just sayin..
Interesting article. My trio has been around for 25 years and has done maily well with cd sales because of tourism to Newfoundland. http://www.thesharecroppers.net
NO PIVOTING!!!
Re: #95 – your rationale for why the long tail thesis isn’t at work in music doesn’t make sense. Of course the titles at the top of the charts are going to be the heavily marketed new releases.
The point is that revenue flows to many more than it used to, for much longer, even if it is at a ‘low’ rate. Anyone using a streaming service is paying over and over for their favourite albums, which may be way down any chart.
I listen to many more albums than I could possibly buy, many from artists who are very obscure. That = money for their label/them that they would not otherwise receive.
RE: #95 – Long Tail.
The availability of Smithsonian Folkways’ 40,000 tracks online (in all forms) has had a transformative impact on our business and established us as an example of a successful Long Tail organization.
Read more about it here (2nd half of the article focuses on the business model):
http://www.nytimes.com/2012/07/15/arts/music/your-land-and-woody-guthries-preserved.html?pagewanted=all&_r=0
David Horgan
Smithsonian Folkways Recordings
folkways.si.edu
A ‘successful Long Tail organization’ is one thing, and quite an accomplishment. I think the bigger problem is that a ‘successful Long Tail industry’ never quite materialized.
/paul
One reason the long tail model for the industry hasn’t met its expectations is the pricing model. When you charge the same for the most current, popular in-demand song that you do for one recorded fifty years ago, this warps the value equation and stifles the exploitation of catalog and incremental sales. A niche product line, such as the archives at the Smithsonian, has less of a problem with this because its catering to a specific consumer who would likely purchase it at any price. We used to call those folks “completists”.
Music Schools — Berklee is overpriced but there are some great alternitives and not all of us teach ‘old school’ tech. Where I teach at The University of Colorado Denver we focus on the REALITY of what students face — including leading off class with articles like this one (thanks Paul … love your writing) to put a real face on it. What does that mean for students ? Well if I am doing my job right, my students know what their choices ARE and how to make the most out of what THEY create with their efforts, whether that is music for publishing, or records, or beats, or they are going into the business itself. OUR job is to teach (a) the latest technology and theory behind it (b) show students all the opportunities and pitfalls that we as educators can see from being out there in the business. (yes, I am a Grammy nominated artist who plays gigs and places songs on TV and tours here and in Europe) …and finally, my job is to know about (and love) new music and trends … and that is the really exciting part. For every horror story there is a band like Vintage Trouble that comes along and knocks one out of the park! Yes, I am an optomist, not so much about the business, but about the quality of new talent…it’s fantastic!
Awesome, listening to Vintage Trouble right now…
/paul
“85. Enter iTunes Match, which is offering to upload user collections for a modest yearly fee. That sounds great, except one concern is that Apple is effectively validating and granting amnesty on massive collections of illegally-downloaded music.”
In no way does iTunes Match grant amnesty for copyright infringement. And by paying for all streams of uploaded recordings (whether the source recording was legitimately purchased or pirated), Apple is in effect monetizing piracy for the labels and publishers.
Right. Apple never claimed that iTunes Match grants any kind of amnesty. Pirated music is still illicit, Matched or not.
– V
The one slight qualm I’d raise is that the stat about incomes seems a bit odd. Musicians on average make $34k from music, and $55k overall? Dosn’t that actually put them above the average median income? Hell, it puts them above my income as a full-time editor working a 9-5 corporate job. If this stat is accurate, then while I can sympathize with the issue of musicians usually having to work two jobs (one usually not in music) to make more than $34k, I don’t see what the problem is if the average musician can still pursue their art and also make more than the national average.
96 & 98 Speak to me the most..
So what are you ideas on 99 ways to FIX it?
depressing but real………is this a bad time to shop your music?
https://soundcloud.com/#greg-harry
Very well put together! Thanks for the post up
As owner of 3 small net labels, I must admit that upon reading this I did begin to realise just how many hurdles there are to overcome in any attempt to gain exposure and sales for ones musical endevors.
I am however happy to let you know that there is at least one guy out there (that would be me) , who has managed to increase his DIGITAL music sales revenue by 100% each year since I set up 3 small net labels in late 2009.
What I make in sales however, is (or was) barely enough to pay for the web site hosting for each label and pay my internet bill for the year, but I did manage to finally ‘break even’ mid way through 2012, which I class as a triumph considering that I spent not a penny on advertising and even more so when our releases are availble on torrents less than a week after they are released.
Uploading 3 minute clips seems to be the best way to go as far as avoiding pre release piracy is concerned, combined with giving away the odd freebie / bootleg every now and then.
I don’t know how long I can keep growing at a rate of 100% , I really thought my labels sales revenue had plauted last year, but more recently our sales have increased ten fold almost overnight , so who knows.
It helps that all 75 of my artists across all 3 labels all know one another via the net, share ideas, collaborate, help each other with ”likes”, votes on remix competitions, share each others releases with friends and family, even buy one anothers releases, leave ratings and reviews on Itunes etc, help me with setting up Soundcloud accounts, Youtube accounts, twitter accounts for each label and do a stirling job of keeping them updated.
I guess at the end of the day, music promotion all boils down to how it is managed and run, if you’re going it alone, with little contact or communication between each member of the ”unit” then it’s a lost cause as far as I’m concerned, I’m fortunate that I can boast a mobile phone app developer, several web designers, graphic designers, a sound engineer, music magazine editor, several internet radio show hosts and countless DJ’s on my roster and I class each artist as a close friend, we’re more like a big happy family, with the odd idiot who has come and gone, but I think there’s always a few who will try to ruin it for everyone else.
I am of firm belief that the music industry CAN be cracked, especially now ..and you just read a few words by the man who is going to do it 🙂
As the ginats fall….WE RISE !
Here’s a theory I’ve been devising:
Given how Spotify doesn’t give back to the label a considerable return to the expensive investment that is studio recording (although studio costs are getting cheaper), in the near future, artists may want to focus less on doing recordings, but focus on the live show. What influenced this thought in me is this Brazilian artist, I’d say THE biggest artist right now in Brazil (His hit single is actually no. 1 in Europe and even Quebec, as I now find out in his Wikipedia page.)
http://en.wikipedia.org/wiki/Michel_Tel%C3%B3
Notice in his discography how he has done one studio album in 2009 and then on the rest is all DVD releases. This is the DVD quality, all on youtube:
And this is another live performance of his international hit (notice the amount of views):
Maybe for quality purposes, I think artists should still be recording their main hits (for sync purposes to commercials/film/videogames), but, for the other not-so-hit songs that won’t get streamed and won’t get the artist/label a return in the studio investment, maybe investing on a kickass live sound recording engineer might be a better deal and just release those live versions on spotify and DVD (to be placed on youtube instead of doing expensive music videos) instead. After all, live albums can actually sound very good and, depending on the music style, might sound good enough to be streamed on radio and Spotify, the latter not for the royalties (as many are suggesting won’t go up) but for EXPOSURE for more fans. (Sure, for this particular artist’s music there is very little electronics involved, which pretty much require studio engineering to sound good in a recording. So this might not be applicable for electronic-heavy music). It’s all about upgrading the show experience to the max. What it takes is an extraordinary debut.
I haven’t seen this approach addressed in any report so I might be thinking naively, but the way I see where things are going, touring / event planning is becoming the greater demand, and maybe artists are just investing on studio and expensive music videos just for the sake of tradition instead of adapting to Spotify/Rdio/Deezer and focusing the budget more into making the SHOW the selling point, but not forgetting merch/marketing/online presence/publicity. For Michel Telo it seems to be working.
glitzpeaks.blogspot.ca
Like BMI and other scams. I’ve asked a few friends, and none of the checks are as much as they pay into these strong-arm services. Does anyone get as much back as they pay in?