Labels may be losing money, but artists are making more than ever

Discuss

38 Responses to “Labels may be losing money, but artists are making more than ever”

  1. Tigerbomb says:

    I am not convinced there is much money to be made for the kinds of bands who might attract 40-50 people along to a club (ie. most bands at the bottom end). There’s plenty of anecdotal evidence (esp. from the US) that the whole ‘jump in a van and spend six weeks on the road’ thing has been dramatically hit by rising fuel prices.

    • zio_donnie says:

      then again bands that attract only 40-50 people to a pub hardly suffer from illegal downloading. obscure bands in real life remain obscure on line too. if your cd sold 4 copies it’s not that it will be a big hit torrent either.

      but if somehow an obscure band manages to become internet famous it will sell tickets, much harder do it the other way round.

    • dculberson says:

      I don’t think the bands that attract 40-50 people to a club ever made money. They toured, and still tour, for the fun and adventure of it.

      Our small local venues continue to host tons and tons of shows and every one I go it is super crowded. For the most part that’s not really obscure bands though, stuff like Gogol Bordello and Reverend Horton Heat.

  2. Cory Doctorow says:

    Given that pre-Napster, 97% of the artists with a record deal earned < $600/year from it, I have to ask — are the equivalent artists in the touring world really doing worse than that?

  3. Felix Mitchell says:

    “It’s often claimed that live revenues are only/mostly benefitting so-called ‘heritage acts’”

    Really? Many big bands sell their tickets below what the market would bear to keep fans happy. Tickets to see Tool, The Rolling Stones or Fleetwood Mac are often only slightly more expensive than much much younger bands that have only been popular for 6 months or so. So how does that only benefit ‘heritage acts’?

  4. bjacques says:

    The sharecroppers are leaving the farm and the miners are leaving the company towns! Send men to watch the train stations! Don’t let them get away!

  5. lac says:

    Cory Doctorow wrote: “Given that pre-Napster, 97% of the artists with a record deal earned less than $600/year” … Do you have a source for that? I think that _that’s_ the graphic that the record labels do not wish you to see, combined with how much money the record label made from the same record deal. I think that the true state of the recording industry for most genres of music is pretty much how Wendy Day spells it out for Rap musicians here: http://searchwarp.com/swa31691.htm

    Your record can go gold, and you still owe the record company money. A deal where the artist gets between 8 and 12 percent of the revenues — and expenses comes out of that — while the record company gets between 88 and 92 percent looks like the worst sort of exploitation to me.

    The politicians I have spoken with all believe that musicians make money from album sales, and think that I am lying to them when I say that this is not true. Or perhaps ‘all _good_ and
    _popular_ musicians’ make money from record sales. The few who look at figures I have been able to find a pretty shocked about the true state of affairs. I’d like more data to show them.

    I think we could build a pretty nice movement around ‘We do not value our musaicians by preverving the system that exploits them’.

  6. Anonymous says:

    Copyright law was never about making sure there were winners. Copyright law was put in place to encourage innovation. Way back in history, you could author a book, and anyone could publish it without paying you because no laws existed. This discouraged anyone from creating original works, or at least publishing them.

    Our copyright laws could be scaled back considerably and creative arts would still flourish. Whether or not anyone is making money doesn’t really matter, though I am happy to see artists are working it to their advantage.

  7. Anonymous says:

    I like this

  8. remmelt says:

    > I am not convinced there is much money to be made for the kinds of bands who might attract 40-50 people along to a club

    These bands or musicians will always exist. They will not stop making music. They’re not making money now, they will not make money if copyright did not exist.

  9. lennyd44 says:

    And I believe this chart does not apply to most indie bands that tour their ass off.

  10. Bottlekid says:

    My nephew is in one of those bands touring in a van at the moment. There isn’t a hell of a lot of “fun and adventure” in sleeping in a van with 5 other dudes, but they wish to go the label route (preferably indie) and they have been told by several different management companies (including their own) that labels won’t even look at a band that doesn’t have a significant touring history. My theory is they want to weed out the hobbyists with contantly changing members from the career-driven pros before they invest their money.

    His band has made more money(merch sales) playing High Schools and Hot Topics than playing shows at Universties and clubs. There’s clearly more money in the teen/tween fanbase.

  11. scifijazznik says:

    As someone who runs an independent label, I can assure you there is no money in it. You do it for the love of the music. Simple as that.

    We’ve recorded some of the top names in jazz, so name recognition is not the issue. A lot of the problem is that there just aren’t any record stores anymore. People who buy jazz tend to be the types who like to go to the record store and spend a couple of hours browsing and talking to the schlubs who work at the store. (I used to be one, so that’s not a knock.)

    The internets have been ok to us. Through our own website, Amazon and iTunes, we’ve sold a few hundred copies. But it doesn’t begin to cover the cost of paying the top guys, studio time, manufacturing and promotion.

    My partner and I are very uncertain about the future. We’d be pleased to break even. As it stands, there’s only so much money we can stand to lose before we have to throw in the towel. It would be a shame because we do love the music.

  12. JohnBlackburne says:

    To me it’s seemed like something like this was happening in the music industry for a few years: the emphasis for many artists seems to be changing. Instead of making albums then touring to promote them, they are making albums to promote their touring, as that is where the money is. Because of declining album sales they are specialising in performance over production.

    This does not suit everyone. Musicians without the energy for touring, or the inclination, or who make music that’s less suited for live performance, will still face declining incomes from albums – for whatever reason – and so hard choices about whether to continue making music.

  13. Anonymous says:

    “lolbrandon | #15 | 09:40 on Fri, Nov.13 | Reply Report
    I’ll happily pay out through the nose to see a 90 minute live concert, but give my ten bucks to iTunes for a new album? No way!
    It’s pretty obvious who’s pocket that ten ends up in.”

    If the artists self-release and put it on itunes, a significant portion of the money does end up in the artists’ pockets.
    Best place to buy mp3s, though, from self-released artists (and there are many great ones) is CDbaby.com Artist gets more money, about same price as itunes and the mp3s are higher res than itunes’.

  14. Anonymous says:

    “A deal where the artist gets between 8 and 12 percent of the revenues — and expenses comes out of that — while the record company gets between 88 and 92 percent looks like the worst sort of exploitation to me.”

    8 per cent of retail value is what you mean. For the label to keep 92 per cent of retail -

    - the pressing plant makes the CD for free

    - the distributor carries the CD in a truck for free

    - the store sells the CD for free

    all those businesses have bills to pay and staff. Your maths is funky

  15. lolbrandon says:

    I’ll happily pay out through the nose to see a 90 minute live concert, but give my ten bucks to iTunes for a new album? No way!

    It’s pretty obvious who’s pocket that ten ends up in.

  16. Anonymous says:

    As an artist who was in a few of those bands who did gigs with 40-50 per show (or 300, or 13 now and then!), I think it’s great for bands to get more money for live shows. That said it’s a sad comment that artists need to recoup losses by touring, which is really what this is inferring.

    Why do we still make 3 cents on the dollar to the record company’s 97 cents? Even taking production, distribution and advertising into account, it isn’t costing them anywhere near this gargantuan share. This is what record labels dislike about Internet sales and free downloads; it’s bumping into their insanely huge profit. They never should have received this much in the first place. I realize this is technically a different subject, but it’s directly related to the ‘whys’ of this article.
    Also agree with M’s comment. Copyright has nothing to do with success, but everything to do with protecting your own songs/musical pieces.

  17. Anonymous says:

    “Labels are superfluous. It is imperative for the artist to know their market, and the tools needed to get to know those who buy their music are all over the place. If the individual artist or band as a whole can divide and conquer the business side, the amount of ownership therein will correspond to greater returns directly to the artist.”

    Quite so! This is also very true of the author/publisher relationship. Publishing houses have also outlived their usefulness, with the coming of the Internet age. Anyone can self-publish using the very same services and distro networks (Lightning Source for printing, Ingrams for distribution, etc.) All you need to do is buy a block of ISBNs and hire a freelance editor and maybe a designer. You do have to go on the road to promote your work–but most publishers expect you to do so anyway, on your own dime.

    The upshot is you can make the same margin on *far* fewer books sold (and at a lower list price), because there’s no middleman, AND you retain all your rights.

    The Internet is changing the game. I suspect a lot of these publishing/media companies are going to go the way of the whip and buggy makers of old.

  18. M says:

    “Which raises the question: is it really copyright law’s job to make sure that last years winners keep on winning? Or is it enough to ensure that there will always be winners? ”

    None of the above. Copyright is to protect the original author of the piece from being ripped off by others for their own benefit, whether he or they are successes or not. It’s not about anyone’s success.

    • octopod says:

      hmm, I thought part of the rationale was to promote progress by providing an incentive to bother, so in that way, the latter is true, with winner in the sense of winnerism rather than financial gain.

  19. Anonymous says:

    copyright’s “job” is to protect intellectual property, which SHOULD belong to the artist, but so often doesn’t. I don’t believe it is the job of copyright to decide who gets rich.
    -a musician.

  20. Anonymous says:

    That’s all very well commenting that artists are making more money than ever (which would be a good thing), but latest figures reveal the opposite unfortunately – the executives are grabbing and running away with the money!
    http://bit.ly/6T0dAa

  21. Baldhead says:

    So the thing that actually made money for the bands- the concerts- is making them more money today. Good. Labels are losing money in a big way- good, or bad depending on what your point of view is.

    I’m not sure you can be a mega- seller without a label. Somebody has to put up the promotion money, don’t they? But I’m not convinced we need mega sellers. What we need are good musicians and good songs and good albums (which are still rare. Bono’s quote still stands)

  22. Wingo says:

    I am not convinced there is much money to be made for the kinds of bands who might attract 40-50 people along to a club (ie. most bands at the bottom end).

    As others have said, these types of bands have never really made money. I can speak from experience. You basically have to sell CDs after the show and haggle with the clubs/promoters over your chunk of the door/bar, which can vary wildly. Mostly you’re just lucky if you recoup your expenses (food, drink, gas, equipment maintenance, etc.)

    These types of bands usually just do it because they love to play, and hope to spread the word and widen their fan base or get ‘noticed’. But for the most part you’re not delusional. You never expect to suddenly start making a handsome salary and get offers to play at the Hollywood Bowl out of the blue. Would be great, but not necessarily likely.

  23. Anonymous says:

    as a ‘signed’ musician, I have no doubt that this is true and accurate. I see a label more of a jumping off point akin to a PR firm nowadays, especially since I make more money off of the self released records I loaded onto itunes myself (via reverbnation), that benefit from the publicity (but still zero profit) that came from my label release

  24. Anonymous says:

    Why are artists making so much money from the live shows these days? It’s because they scalp their own tickets. The local news station here in Nashville just did a story on why it’s hard to get anything but nosebleed seats for the face value on tickets these days. http://www.newschannel5.com/Global/story.asp?S=11469165

    • sabik says:

      Why are artists making so much money from the live shows these days? It’s because they scalp their own tickets.

      I’m not sure it’s really “scalping” if you do it to your own tickets. Selling tickets for what the market will bear is the correct thing to do in a free market economy.

      The only reason to call it “scalping” would be if there’s something twisted in the system that forces them put an excessively low nominal price on the tickets.

  25. skeletoncityrepeater says:

    I am pretty sure these figures apply mainly to the UK music industry, and don’t apply worldwide, especially to the US. Every artist I know that has ‘made it’ and makes some sort of living recording, licensing and touring, tells me that live money is not that great in the US and artists get much better crowds anywhere else, especially in Europe, Japan, the UK, and some South America. The bare minimum that non headlining touring acts get in the US is not high enough to pay each member of a band and whatever manager or crew they need to take with them. And unfortunately, in club shows, the order of compensation tends to go: Pay the venue, then pay security, then pay bar staff (who make money anyway), then pay the promoter. Then the promoter pays the DJ’s, and then maybe the band will get paid. You have to be pretty established as an artist to demand a minimum payment for a night, if you want to expand your audience and play different places.

  26. jtegnell says:

    As a jazz “artist”, I find myself making less money, honestly. I live in Tokyo, and it’s the same bullshit here as in the US — people think they’re doing me a favor by giving me a venue. They’re giving me “exposure” that ostensibly leads to more “exposure” opportunities.

    I think the real money is still being made exclusively by “artists” who are owned wholesale by labels and rightly deserve the moniker “artist” since they don’t know a damn thing about music.

    Sorry. Bitter, actual musician rant.

  27. lerasmus says:

    4 years is a fairly short time frame to be sure that this is a trend. What were revenues like 8, 12, 20 years ago? Also, there is a much stronger live music economy in Europe than there is the US/Canada, so these graphs have to be taken as very much specific to the UK.

  28. SteveX says:

    Where is the really hard data on this. I have not seen it at all. All I here is talk from bands but what I don’t see is a an actual spreadsheet – balance sheet

    I’m not so sure many bands are better off giving away music for free for example

    I’m not seeing costs sheets at all

    Travel
    Gas
    Food
    Auto cost
    Insurance
    Maintenance on equipment
    Maintenance on Auto
    Equipment cost
    Clothing

    And the list goes on

    All I’m hearing and seeing is, “we made money”

    I am not seeing a balance sheet from any musicians online, not one, not one describing debt versus profit versus expenses.

    Until I see more of that, all I can say is musicians are just verbal blogging

  29. Anonymous says:

    Who had the great idea to plot three of the five lines using various dull shades of blue?

  30. Anonymous says:

    I have also read, possibly on boingboing, that the largest purchaser of cds and recorded music are people who also download, and by a wide margin too. That fulfills a decade old prediction that downloading music would be a way for people to easily broaden their appreciation of music, leading to more sales. I think the music industry’s criticisms of p2p file sharers is pretty baseless given stats like these.

  31. Anonymous says:

    All the above said, the record label paradigm has been redifined to the point that all an artist really needs are distribution, a good marketing hook, and drive – that will bring their music to a defined market. Labels are superfluous. It is imperative for the artist to know their market, and the tools needed to get to know those who buy their music are all over the place. If the individual artist or band as a whole can divide and conquer the business side, the amount of ownership therein will correspond to greater returns directly to the artist. And if an artist is not comfortable with a certain aspect of the music business, that part can be bought out.

    Power to the musician.

  32. Anonymous says:

    I ditto that it seems that live shows are trending up. Also since the traditional record company dose not pay any touring costs at all anymore, the tour is artist financed, so we hope they are getting a high net profit. Once upon a time there was enormous bookings power by simply being a signed artist. The understanding was that being signed meant good: worthwhile, professional, a known quantity. However the sound of every genre became so polished, that certain musical tastes felt unsatisfied; oh by the way music listening technology changed as well, characterized by self empowerment and decentralization. Finally, a very large demographic got out of the music business ie. not funding music enterprises due to jobs and starting new families. It could be that this demographic is starting to have more time and money that is free to spend on music once again, and these are the early signs. It will never be a cut and dry yes or no situation.

  33. luxdivon says:

    Some revenue making ideas for artists/musicians. One just popped into my head, so i had to comment.
    If the majors are going to start charging for streaming songs, then artists should do the same.
    If you have a great song, and it gets tons of plays, and you have developed your fan base, then at some point, you could charge per stream. Musicians are deserving of financial compensation. This is one way to get it.
    Until you have draw, you just aren’t going to make money. It’s the same with no name new products etc.
    Another idea, one that I read about the other day, with the dresden dolls, involves real time social networking, goods, sales, etc. They made something like 15 grand off tshirts and some catchy line that she markered onto the shirt. Everybody loved it. All live via twitter.
    This is where things are going. I’m just getting started in this business, but it’s exciting to see it changing so dynamically.
    Create you image/culture/entertainment/product and find your niche. Then sell what they’re willing to pay for.
    Live Shows. broadcasts. watching live recording sessions. albums. the shirt you tore at the end of your show.
    (man i wish my masters were done! like this week and my album’s up. LOL $5 for 7 songs..shameless self promotion)Triphop.Dubstep.Electronica.Fusion.Dub.Rock&Roll
    Join our community if you dig our music http://www.luxdivon.com

  34. Anonymous says:

    This kind of an article perpetuates the notion that artists make money from live shows. False. Waht it should say is that ESTABLISHED ARTISTS make money from live shows. Unknown artists are forced to get 25 people in the door at 11PM on a Tuesday Night before they see one penny from the club no matter how much the 10 people they brought spend at the bar.

    http://www.thehighwaygirl.com

Leave a Reply