The 14 Most Destructive Myths About the Music Industry

#1. Spotify saved the music industry.

First it was Steve Jobs who saved the music industry.  Then it was Spotify.  Neither is true.

Define ‘saved’.  Did Spotify ‘save artists’?   How about publishers?

Spotify’s responsible for massively eroding piracy.  That counts for something.  The labels are roaring back — and getting seriously compensated for their catalogs.

Spotify has 60 million people paying for music.  Another huge accomplishment.

But I find more artists are on Spotify because they have to be on Spotify.  Not because they want to be there.  And that goes for everyone, from an unsigned artist to Taylor Swift.  Now, the game is finding a way to get compensated outside of Spotify (like Patreon, or touring).

Which is why you’ll rarely hear an artist say, ‘Spotify saved the music industry’.

#2. YouTube is screwing over the labels.

This is about power: the labels need YouTube more than YouTube needs the labels.

So they’re calling the industry’s bluff.  Because for all their complaining, these mega-labels and publishers could rip down and block all their content.  They could send the army of lawyers and make life hell for YouTube.  They have the resources to do that.

But they don’t.

#3. You can’t make money from YouTube

Lyor Cohen isn’t losing sleep over your $17 royalty check.

I’m not saying this is fair.  YouTube’s ethics are borderline.  But saying that doesn’t solve the problem.  Which is why the smart ones are working around this problem, and figuring out other ways to monetize.

Jack Conte got depressed after receiving his YouTube checks — so he started an entire company to fix that problem.  Patreon just got $60 million in series C financing.  YouTube artists are driving traffic to Patreon — in the hopes of making some real money, directly from their fans.

Kobalt saw that YouTube’s recognition wasn’t good enough.  So they developed an entire technology to better recognize content on YouTube — and get paid for it quickly.

Vydia has developed an entire YouTube monetization solution after realizing nobody was doing it right.  They’re actually paying advances to up-and-coming YouTube artists and managing their royalty flows.  Genius.

Jeff Price realized that artists weren’t getting paid correctly on YouTube, so he started an entire company to deal with this (Audiam, now part of SOCAN).

Songtradr is trying to bang down the door on synch licensing, a traditionally closed-off revenue stream that has little to do with YouTube revenues.

Hundreds of musicians and performers have decided to skip the YouTube royalty focus, and instead use YouTube to drive traffic to shows while establishing direct-to-fan relationships.

And so forth.

It doesn’t make what YouTube is doing right.  But these strategies are all about fighting back, or figuring out a way to work around the problem.

#4. ‘The music industry is back’

Not yet.  And a lot depends on who you are.

If you’re a major label, the grass is green again — and growing fast.  If you’re a publisher or songwriter, things are more mixed.

If you’re a musician, you’re experiencing more opportunity and fan access than ever.  But more work than ever, with smaller rewards for the winners.

#5. Spotify is the next Netflix.

Goldman Sachs likes that future.  But there are a lot of unknowns between here and there.

For starters, the music industry doesn’t want a towering, all-dominating Netflix.  That was the problem with iTunes — one store that called all the shots.

Which might explain why Apple and Amazon have so much steam.  The industry wants a few players duking it out.  It’s better for business.

#6. The major labels are in trouble.

The major labels just received $2.34 billion in Spotify advances for two years — guaranteed, before any actual per-play royalties are calculated.  They’re grabbing 60%+ of streaming revenue and fat equity stakes.

Not to mention separate deals with Apple Music, Amazon, SoundCloud, and others.

Maybe that figure includes Merlin, maybe not.  But you get the idea.

#7. Piracy is still a pressing problem.

Does piracy still exist?  Of course it does.  There are more people than ever on the internet.  And it definitely impacts the revenues of certain artists and rights owners.

But it’s not the main event anymore.  A lot of label execs and managers view it as a nuisance.  If it’s even considered a ‘problem’.

Ed Sheeran credited his career to piracy.

Ed Sheeran: ‘Illegal File Sharing Is What Made Me”

Meanwhile, a recent study showed that free streaming has done more to reduce torrenting than any anti-piracy enforcement tactic.  Another study — commissioned by the European Commission before they allegedly buried it — questioned whether illegal downloading was actually harming the industry.

Legal Threats Have Absolutely No Impact on Music Piracy, Study Finds

Sure, label organizations like the IFPI and RIAA are screaming that piracy demands attention.  But that’s because they don’t have a job if piracy isn’t a problem anymore.

# 8. The music industry makes any sense.

‘Cash Me Outside Girl’ is on the same label at The War on Drugs.  And both are making money.

A label makes millions on a song while a publisher makes thousands.

The music industry made a little bit of sense in the old days.  Now, it’s just nonsensical — with a lot more room for creativity.

# 9. ‘Touring is where the money is’

For a few artists, yes.  For a vast majority, no.

Talk to any successful touring artist.  Going on the road these days is about discipline, work, and all-out commitment.  The thrill fades.  It’s difficult, stressful, and gets lonely.

There isn’t a label paying the tab and taking care of every detail anymore. So you can’t get blasted and bang groupies every night.  Someone has to deal with getting paid, selling merch, dealing with the details.

And you might come out ahead.

Sure, Coldplay dotes between island houses and stadium dates.  So does U2.  The rest of the 99.9% do not.

But it’s also getting dangerous.  Every night, you’re entering a venue with thousands of screaming fans.  Sometimes those people jump on stage.  And sometimes those people are dangerous (just ask Pantera).

Music events have also become terrorist targets.  Doesn’t matter if it’s Joe America or a jihadist.  Just ask Eagles of Death Metal, Ariana Grande, or Jason Aldean.  It’s only getting worse.

#10. You need a major label to be successful.

I could end this section with Chance the Rapper.  With a big fat period at the end.

But there’s way more to this story.  A label can definitely blow up an artist and create a mega-career.  It’s an option that should be considered if presented.

But it’s not the only game in town.  And if you aren’t big — like, really, really big — the percentage splits won’t make sense.

You can run a cottage industry on your art.  But major labels aren’t here to subsidize a cottage industry.  That’s not the business they’re in.

#11. The music industry used to be better.

Gene Simmons is right.  Streaming is killing the next Beatles.  But do we really want a music business that only catapults a few mega-stars into the stratosphere?

Chance the Rapper would be impossible twenty years ago.  So would Post Malone, Macklemore, Best Coast, and Boyce Avenue.  Just to name a few.

#12. Rock is dead.

Guitar sales are plummeting.  Rap and EDM are dominating Spotify playlists.  Rock bands are thinning out.  But fans don’t care if you sling a guitar or grab a mic.

The best-selling vinyl record in the US this year is Sgt. Pepper’s Lonely Hearts Club Band.

There are stats, and then there’s the music.  And fans only care if it’s soulful, emotional, and powerful.  They want to connect with something authentic.  Doesn’t matter if it’s with a laptop or a guitar.

#13. Downloads are dead.

Not so fast.  There’s a reason why there’s so much hype around the Mighty.  It’s a mini-player focused entirely on cached Spotify ‘downloads’.  Turns out we lost something with the iPod Shuffle!

And YouTube to MP3 converters are surging for a reason.  Once again, the industry isn’t super-serving their clientele — and leaving money on the table as a result.  But of course they send in the lawyers to fix a business problem.

#14. Vinyl is all about aficionados.

One of the best-selling record players is one that purists would spit on!  It’s an all-in-one turntable and speaker unit from Victrola (yeah, they bought the name — genius).

Not everyone who buys books gets the leather-bound edition.  Sometimes you want a paperback for the beach.  It’s the same with vinyl.  Not everyone is taking it so seriously.

+ Now There’s an Oreo Cookie That Doubles as a Vinyl Record

All of which might explain why this age-old format is still growing after 10+ years.

Yet another myth debunked.

 


Top image by Josch13 (CC0)

14 Responses

  1. Avatar
    Hit Spins

    Lookup “The Manual” (How To Have A Hit The Easy Way) by The KLF.

    It’s a great read.. very UK centric.. from the days when BBC TV weekly music chart show “Top of the Pops” ruled the ratings and charts of Britain’s record buying public.

    I wish there was a KLF around today.. I’d have them write a new book “How to conquer the streaming game and get yourself a Hit”

    I hate to say it but I agree with Bob Lefsetz, in that it’s all too safe today and no one is taking chances and shaking the ground..

    Max Martin is brilliant but it’s very safe commercial music.. The KLF had attitude
    and amazing visual presence and made some really wonderful records..

    Reply
  2. Avatar
    Hit Spins

    Also, I agree with what the article said about touring and live performance..
    not everyone is cutout for it and it can quicken become a burden and a grind (hard dull work). Plus it’s not rich pickings for most bands.. there’s a lot of costs that need to be covered before you can go and start spending big on new swimming pools and fancy cars..

    In the 80s it was common place to have non touring bands.. bands who existed in the studio and the odd TV performance.. The video promo clip did the touring for you..

    Mickie Most (Rak Records) said that one hit single in Britain could earn you enough so that you don’t necessarily have to work again.. as the scale of the record business economy was great and back then a hit could get you a mansion out in the English countryside..

    Reply
  3. Avatar
    Versus

    “#7. Piracy is still a pressing problem.”

    How are you measuring this?
    It’s very difficult to gauge all the consequences, but:
    Piracy is still rampant. It’s not just torrents; it’s also users giving each other entire music collections; it’s YouTube full of illicitly uploaded albums and songs; it’s stream-ripping; etc. How to calculate the losses? Surely the streaming services and download stores would be doing far better (in terms of paying customers) if all these and other illicit avenues were gone.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      Interesting you mentioned YouTube as having pirated content. Why isn’t that being controlled? Why aren’t conversions being controlled?

      Reply
      • Avatar
        Versus

        Mr. Resnikoff, I have the same questions and would love to know the official GoogleTube answers.

        For example, are these full-album uploads counted and monetized? They should be monetized for all the songs contained. Are full-album uploads caught by contentID if you want to block your own music from being uploaded?

        I believe YouTube should be opt-in, not opt-out, for artists. That is, unless an artist gives YouTube specific permission for their music to be on YouTube, than all content which contains said music is simply blocked at upload. Instead, the artist is left to either “monetize” (here is your check for a fraction of a cent) or try signing up for ContentID block (does that even really work well?).

        Reply
    • Avatar
      Anonymous

      Piracy is a problem. But given a choice between increased piracy, or giving everything away for free, I would choose increased piracy, and do away with all the free ad-supported services. If you want to listen to music on-demand, you should either pay $9.99/month, or take your chances with all the viruses, malware, and legal notices that come from using the torrent sites. We have to stop giving it away for free.

      Reply
    • Avatar
      Jim

      Touring revenues would not be as good without piracy.

      Indie acts would not be selling as many tickets if people did not know their music and it’s certainly not radio that’s telling people about the music by the indie acts.

      I download what I download, and in the process, get to know those acts better. I download albums I never listen to. If one of those bands comes to my town, I’m more likely to go to that show. The act would not have gotten a sale from me back in the old days, I would not have bought the record and if they came to my town (or the close-ish city where there are a lot of options) I would not have made the decision to see that show. Now, a lot of those decisions are specific to things like how close you are to the city, but having free and easy downloads makes it easier to know the act and have enough information to take action to spend money to see them.

      Reply
  4. Avatar
    Frank Lee Speaking

    once again, another journalist forgets completely the songwriters – the record business is not the music industry. Also: the only evidence here is anecdotal. needs more real evidence of cause and effect.

    Reply
  5. Avatar
    Michael J.

    A thing that isn’t a myth is these media companies (record labels, estates, corporations, etc.) often lobby the US Congress for copyright terms now lasting 95+ years. The irony is that many of the people in those circles were inspired by the public domain (namely The Walt Disney Company) but are hesitant to let their own public domain-inspired works expire. If copyright infringement/piracy is theft, then retroactive copyright extensions and copyright restorations for domestic and foreign copyrights is public domain theft.

    Reply
  6. Paul Resnikoff
    Paul Resnikoff

    There’s also research on this matter. What I’ve read on the topic indicates that copyright protection generally offers disproportionate benefits to massive copyright owners, not smaller or even mid-size (indie) creators. In many cases, such as Tom Petty’s infamous legal attack against Sam Smith, it’s questionable what the point of these protections are.

    On the flip side, Lars Ulrich made a great point back in 2000 (or so), noting that regardless what you think about piracy, it typically redirects revenues to somebody besides the copyright owner. So that’s a good point, though artists like Ed Sheeran have credited piracy with his success.

    Guess a lot depends on where you’re positioned.

    Reply
  7. Avatar
    Michael J.

    I will be honest and say I do read fan translations (Japanese light novel and manga scanlations) and do watch an anime episode online when there isn’t a legal stream for it. Thus, my rants about public domain infringement are a moot point.

    As far my views on copyright, which is a type of property, look at the Tritonester blog’s 9/21/2014 entry, “Normative Views On Copyright”. I identify as a copyright minimalist. Companies like the Walt Disney Corporation, which has over $10 billion on public domain-inspired films, are copyright maximalists. They are a big reason why the Copyright Term Extension Act was passed in 1998. I don’t buy the claim it was to harmonize with foreign copyright length.

    Reply

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