How Will Musicians Earn Money in the Future?
Here is an excerpt from a great piece from Wyndham Wallace of The Quietus on how the music industry is killing music and blaming the fans. This rather dark opinion is spot on in so many ways and raises some very difficult questions about the future of the music business that most people do not want to talk about.
“All the time the industry talks of money: money it’s lost, money it’s owed. It rarely talks about the effects upon artists, and even less about how music itself might suffer. But no one cares about the suits and their bank accounts except shareholders and bankers. People care about their own money, and the industry not only wanted too much of it but also failed to take care of those who had earned it for them: the musicians. And it’s the latter that people care about. Because People Still Want Good Music.”
“In March this year, for instance, the RIAA – the Recording Industry Association of America – and a group of thirteen record labels went to court in New York in pursuit of a case filed against Limewire in 2006 for copyright infringement. The money owed to them – the labels involved included Sony, Warner Brothers and BMG Music – could be, they argued, as much as $75 trillion. With the world’s GDP in 2011 expected to be around $65 trillion – $10 trillion less – this absurd figure was, quite rightly, laughed out of court by the judge. The RIAA finally announced in mid May that an out of court settlement for the considerably lower sum of $105 million had been agreed with Limewire’s founder.”
What is questionable about all of this is exactly how much of the settlement of $105 million will flow to the musicians, songwriters and producers whose work was the subject of the infringement to begin with. In previous settlements including Napster ($270 million), Bolt ($30 million), Kazaa ($130 million) and MP3.com ($100 million) it is unclear how much, if any, of the money received by the labels ever reached the pockets of the artists. I have yet to see an accounting of this and many managers I have spoken with have simply laughed when I asked the question if they ever received any payment from these settlements. I suppose that proceeds from litigation may be considered recoupable costs.
“But if the industry wants to talk money, let’s talk money, albeit the ways that developing musicians are encouraged to make up the loss of sales income in order to ply their trade. Someone’s got to bring this up, because it’s not a pretty picture. Consider, first, direct-to-fan marketing and social networking, said to involve fans so that they’re more inclined to attend shows, invest in ‘product’, and help market it. In practise this is a time-consuming affair that reaps rewards for only the few. Even the simple act of posting updates on Facebook, tweeting and whatever else is hip this week requires time, effort and imagination, and while any sales margins subsequently provoked might initially seem higher, the ratio of exertion to remuneration remains low for most. It’s also an illusion that such sales cut out the middlemen, thereby increasing income, except at the very lowest rung of the ladder: the moment that sales start to pick up, middlemen start to encroach upon the artist’s territory, if in new disguises. People are needed to provide the structure through which such activities can function, and few will work for free – and nor should they – even though musicians are now expected to.”
“Still, if an act can find time to do these things, or has the necessary capital to allow others to take care of them on their behalf, then they can hit the road. Touring’s where the money is, the mantra goes, and that’s the best way to sell merchandise too. But this is a similarly hollow promise. For starters, the sheer volume of artists now touring has saturated the market. Ticket prices have gone through the roof for established acts, while those starting out are competing for shows, splitting audiences spoilt for choice, driving down fees paid by promoters nervous about attendance figures. There’s also a finite amount of money that can be spent by most music fans, so if they’re coughing up huge wads of cash for stadium acts then that’s less money available to spend on developing artists. And for every extra show that a reputable artist takes on in order to make up his losses, that’s one show less that a new name might have won.”
“Touring is also expensive. That’s why record labels offered new artists financial backing, albeit in the form of a glorified loan known as ‘tour support’. Transport needs to be paid for, as do fuel, accommodation, food, equipment, tour managers and sound engineers. These costs can mount up very fast, and if each night you’re being paid a small guarantee, or in fact only a cut of the door, then losses incurred can be vast, rarely compensated for by merchandising sales. Again, financial backing of some sort is vital, but these days labels are struggling to provide it. In the past, income from record sales could be offset against these debts, but with that increasingly impossible, new artists will soon find it very hard to tour. Everyone’s a loser, baby.”
From Beck’s ‘Loser’
Forces of evil in a bozo nightmare
Banned all the music with a phony gas chamber
‘Cause one’s got a weasel and the other’s got a flag
One’s got on the pole shove the other in a bag
With the rerun shows and the cocaine nose job
The daytime crap of a folksinger slob
He hung himself with a guitar string
Soy un perdidor
I’m a loser baby, so why don’t you kill me?
(Know what I’m sayin?)
“Whether the industry likes it or not, music is now like water: it streams into homes, it pours forth in cafés, it trickles past in the street as it leaks from shops and restaurants. Unlike water, music isn’t a basic human right, but the public is now accustomed to its almost universal presence and accessibility. Yet the public is asked to pay for every track consumed, while the use of water tends to be charged at a fixed rate rather than drop by drop: exactly how much is consumed is less important than the fact that customers contribute to its provision. Telling people that profit margins are at stake doesn’t speak to the average music fan, but explaining how the quality of the music they enjoy is going to deteriorate, just as water would become muddy and undrinkable if no one invested in it, might encourage them to participate in the funding of its future. So since downloading music is now as easy as turning on a tap, charging for it in a similar fashion seems like a realistic, wide-reaching solution. And just as some people choose to invest in high-end water products, insisting on fancy packaging, better quality product and an enhanced experience, so some will continue to purchase a more enduring musical package. Others will settle for mp3s just as they settle for tap water. Calculating how rights holders should be accurately paid for such use of music is obviously complicated but far from impossible, and current accounting methods – which anyone who has been involved with record labels can tell you aren’t exactly failsafe – are clearly failing to bring in the cash.”
“The problem is, it’s not really the industry that is being cheated. It’s the artists and their fans. People get what they pay for, but – whatever the industry claims – most fans know that. They just don’t want to hear the businessmen fiddle while the musicians are being burnt. Revenues are unlikely ever again to reach the levels of the business’ formerly lucrative glory days, but in its stubborn refusal to recognise that both the playing field and the rules themselves have been irreversibly redefined without their permission, the industry is holding out for something that is no longer viable. Lower income is better than no income, and the industry has surely watched the money dwindling for long enough. Musicians, meanwhile, are being asked to make more and more compromises as they’re forced to put money ahead of their art on a previously unprecedented scale.”
Read the whole ugly story here at The Quietus.
The comments alone tell the sad story of the state of affairs in the music industry today.
Fabulous article – I answered the following Quora question (http://www.quora.com/How-will-music-labels-make-money-if-at-all-over-the-next-five-years) = “As a manager for much of my career, who started literally in the back of a van with one act to working fifteen years later with some iconic names, I can say with some confidence that the big problem for the industry today is not the method of delivery and new ways to monetize this long tail model; it is the destruction of aspiration which has not been properly appreciated yet. Kids playing air guitar in their bedroom dream of being rockstars, living in mansions and ruling the world of popular culture. They don’t dream of a viral hit on YouTube or Facebook, whilst they still pack the shelves at the mall and the former take the lions share of the meagre spoils of their effort. The idea that their page on Facebook will ever stand out from the crowd is of course an oxymoron by definition and if their only route is via a TV show and phone votes, then their music can never be considered a new wave, it will always be a sanitised and manufactured career based on back catalogue covers as a measure of their ability and not a great route for break out artists who are doing something original and creating their own momentum.
Artists need a head to the global long tail business of today to aspire to and it doesn’t exist (yet), rather in the current evolution, the old ones are being destroyed & those ‘mountains’ are being flattened, to crowd level by those that would control the income stream via phone votes and social control systems.
We need a new break out wave of popular culture like Punk or Hip Hop which transcends all the current business mechanisms out there, driven by the consumer and on the back of which the industry re-aligns itself and does what art is supposed to do which is to reflect the mood of generations not just line the pockets of those who think the chicken came before the egg, but the artists themselves and our cultures.
Do you want your musical choice in the future to be chosen by phone vote and based on a selection of groups whose life expectancy will be in single digits in terms of albums? Fast food, fast music… what next?
Personally I have faith that popular uprising in music is timeless and I would love to see an artist take off that acts as an antidote to the current status quo and rather than see millions of people waste their dwindling money on phone voting, lotteries and virtual goods, they buy that artists’ material directly and watch him or her or them get rich. That is the only way you truly know you made that artist happen and make aspiration for future musicians mean anything.
If you think I’m wrong, then ask yourself which artists of today will be remembered by your great grand children. In my opinion they will still talk about The Beatles, Elvis, Marilyn Monroe etc. etc. but not many of this generation.”
This is spot on, its so hard to make it these days, no one cares unless your making tons of money. The artists are under appreciated and should be working for themselves. You should also mention that reselling tickets on Stubhub and Ebay make it even harder for small artists, now the over-priced $100 Dave Matthews Band ticket is on StubHub for $200, thats even less that a fan has to spend on the upcoming artists they like. In the end though, I hope that people will support good, quality music, showing that the power is with the people, not the labels.
Grateful for my day job. Grateful for music. Slowly the sales trickle in.
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Good post. I learn something totally new and challenging on blogs I stumbleupon everyday.
It’s always interesting to read through content from other authors and practice a little something from other sites.
Why do composers feel the need to make so much money from their music? Unless a composer has a Masters degree in music, s/he should not expect to make a reasonable living at music.
I think the idea of having a long-term career in the music industry is a pipe dream. We can make music for fun and continue at our respective day jobs to pay the bills.
Music should be about fun and passion, never about work and business.