State of the indy music industry looks rosy, so why all the doom-and-gloom about music?

TuneCore's Jeff Price has a six-part series analyzing the financial state of the music industry from the point of view of an independent artist. Price offers compelling reasons to believe that although the labels are experiencing a severe downturn, artists as a group are earning more than ever, thanks to the Internet.

I have a feeling that the record industry's rejoinder to this would be, yes, more artists are earning some money from their music, and all told, there's more money going to artists than ever before, but there are fewer opportunities for an artist to sign up to a label like ours that controls so much of the distribution channel that we can guarantee large sums of money for these lottery winners.

In other words, the music industry today is much less winner-take-all, with the benefits diffused to a larger pool of artists at the expense of the few who did so well under the old system. This is what I mean when I say a good copyright system is one that encourages the broadest-possible engagement in culture: more music, from more musicians, reaching more people, at more price-points, in more formats. It's a win for free expression and for art, but it's a loss for some artists and the institutions that supported them.

I don't celebrate those losses: it's terrible to think of people who loved and lived for music losing their jobs (most of the people at labels aren't greedy tools deciding to sue 40,000 music fans; greedy tool-dom is confined to a few powerful decisionmakers). It's sad to think of the tiny pool of musicians who did so well taking a loss (though before we weep for them too much, remember that yesterday's winners are well situated to get even richer from merch, performance and licensing, even without the archaic recorded music industry and its shiny bits of plastic).

But copyright's purpose should be to get as much art made and available as possible -- it's not a full-employment scheme for administrators and marketing people and record-store clerks; it's not a lottery that makes millionaires out of a couple of lucky artists. There's nothing wrong with it doing those things, but they aren't why it's there: it's there to fuel expression and art.

The reality is:

* More musicians are making money off their music now then at any point in history.
* The cost of buying music has gotten lower but the amount of money going into the artist's pocket has increased.
* There are more people listening, sharing, buying, monetizing, stealing and engaging with music than at any other point in history.
* There are more ways for an artist to get heard, become famous and make a living off their music now than at any point in the history of this planet.
* Technology has made it possible for any artist to get distribution, to get discovered, to pursue his/her dreams with no company or person out there making the editorial decision that they are not allowed "in".
* The majority of music now being created and distributed is happening outside of the "traditional" system.

And to reiterate, sales are up...

Seeing that the Nielsen stats are readily accessible and accepted as legitimate, why then are we left with the impression that music sales and revenue are down? The simple answer is album sales and overall gross revenue from music sales (CD and downloads) are down. The increase in music purchases comes from the people buying individual songs. The decrease in revenue comes from a $0.99 song costing less than a $16.98 physical album as well as fewer purchases of physical CDs.

The State of The Music Industry & the Delegitimization of Artists (via EFF Deep Links)

(Image: Diesel Sweeties tee)


  1. He makes some good points, but he undermines them by being disingenuous. He writes, “…why then are we left with the impression that music sales and revenue are down? The simple answer is album sales and overall gross revenue from music sales (CD and downloads) are down.” Shorter: Why do we think revenue is down? Because revenue is down.

    An increase in sales doesn’t mean anything if it’s not accompanied by an increase in revenue. He’s saying there are more individual transactions now than ever before, because the price of each transaction is quite low, but total revenue is down. It’s easy to boost the number of sales by cutting prices; it’s harder to make a profit by doing so.

    I’m not saying that he’s wrong in the main — if independent artists are finding it easier to make a living and develop a fan base (“the net revenue for a self-distributing artist is up”), I’m all for it. I just found those sentences to be off-puttingly weaselly.

    (I also don’t want album-length works, which require an hour’s worth of context to appreciate, to become rarities, but that’s a different issue.)

    1. I think the point is that the gross revenue of the traditional channels is falling, but the net to the artist is rising both as a share of the total, and in total dollars.

      The margin that’s being squeezed to produce that result is the vast infrastructure of the traditional music industry… those losing their place in the machine include both rapacious weasels and hardworking worthies.

      1. Also, I wonder what buying a CD vs. buying and downloading a single song has cost the industry. No more having to buy an album for one or two songs; now you just get what you want.

        I am sure a lot of the big people in the industry will adapt – and sure, quite a few will be put out.

    2. I don’t think the album will die, the symphony and opera both seem to be doing fine. Regarding sales vs revenue, the overhead involved in digital distribution is much lower. The chart to consider is not purchases vs revenue, but revenue vs profits, which I would be willing to bet are better than they used to be.

    3. Um, I’m guessing you didn’t read the actual article, as it’s made clear: it isn’t a case of “Why do we think revenue is down? Because revenue is down.” Instead it’s “Why do we think revenue is down? Because revenue that Nielsen tracks is down.” The income streams that they don’t track have grown. Specifically, revenue from streaming services isn’t tracked,

      “[n]or do they include most band selling direct-to-fan sales, bundling of music with merchandise (i.e buy the t-shirt, get a free album, buy Guitar Hero and get the Soundgarden album), on-line drop card redemption, sales of tracks for game play in Rock Band, ad revenue generated via YouTube and other streaming video sites, traditional public performance royalties, gig income, “pay what you want” donations to the band for music, stem sales, synchronization licenses, ringtone sales (these are listed separately by Nielsen), publishing royalties, fan club subscriptions and a lot more. “

      1. Um, I’m guessing you didn’t read the actual article, as it’s made clear…

        It’s really not. I did read the first page before I wrote my comment, and now I’ve read the whole thing. The author doesn’t distinguish between purchases, revenue, and profit, nor does he provide any figures for the uses you list in your quote — he says “the numbers go off the chart”, but he doesn’t say which numbers he’s talking about (purchases? profits?), or what “off the chart” means. And he says things like “More musicians are making money off their music now then at any point in history,” which is worthless data — if a billion musicians each earned a dollar last year, that’s not very inspiring. He’s throwing together a lot of different kinds of data and statistics that sound good, but don’t actually fit together.

        Klaus’s figure above — independent artists’ income grew 40% between 2004 and 2008 — is much more heartening. I’m willing to believe Jeff Price is hitting some of the reasons why that is, but he’s conflating a lot of things that should be kept separate. He’s saying, “My car has better gas mileage than yours, because I drove 50,000 miles last year and paid an average of $2.50 per gallon!”

  2. The same point was made about a year ago by Times Online:

    The writers use data from the British music industry to show that overall revenue has grown slightly from 2004 to 2008, with artists taking a much larger proportion of the cake due to a shift towards live performance revenue. Their numbers show that in that period, the income of artists has grown an average of 40%!

    Crisis, what crisis? Not for artists.

  3. i will carry on releasing albums regardless of the desire for one-song-only. If it means i only press up 200 copies of something so be it…i’m no luddite, i just don’t fit the brief here.

  4. I’d like to see support for a big statement like “More musicians are making money off their music now then at any point in history.” Someone asked at the linked article – no response yet. Anyone else have a reliable source for this claim?

    1. Just a remark: “more musicians are making money off their music” is not the same as “more musicians are earning a living wage off their music.” The internet has spawned a cottage industry of indies making some money of off their works.

      1. Forkboy and Jeff. It is great that there are people out there promoting independent musicians and niche artists, but in the comparison between “then and now” I think both of you underestimate the richness and diversity of music in pre-digital times.

        It was not just a story of mainstream labels or nothing – there were hundreds or thousands of small, mainly geographically local, labels and scenes. How it balances out against today’s, I don’t know, but I think the “past = mainstream, today = diversity” meme is an oversimplification.

  5. Instead of whining about IP theft, the music industry ought to look at their own lousy product. Revenue down? Not a surprise. Indy musicians making money? Also not a surprise. When the major labels deliver dull, boring product, they should expect dull, boring revenue.

    I don’t deny that copying is going on. But the music industry needs to look its own suckage in the face, and it has consistently refused to do so. O’Reilly Media (which pays my salary) has published many books with creative commons licenses, and publishes electronic books without DRM. And our observation is that the ability to share and copy makes good books more successful, while it makes poor books fail worse. I don’t see any reason to believe that music behaves differently.

  6. One cohort getting squeezed out are the little hole-in-the-wall record shops. It’s inevitable that their business model changes with the shift away from physical media, but we can still admit it was a unique “cool-hunting” gig while it lasted.

    1. Those shops could retool themselves, and still have the same sort of purpose (to serve the music fans in ways they wish to be served, that only a brick-and-mortar store can): Just sell physical music-related paraphernalia, like shirts, posters, or other things you simply can’t download (and maybe offer computers or WiFi or something so you can easily download music or other stuff you want while there onto storage media or whatever); yes, you can order stuff online and have it shipped in to your home, but the stores can get a better economy of scale on their shipping (by making bigger orders) so you can end up with a better deal at the store than paying for the shipping for your own online order.

  7. thank you very much for taking the time to read the article and for the thoughtful comments.

    I am not certain if I am allowed to cross post to the TuneCore blog, but if so, I previously recorded a number of
    short video responses to many of the questions I see here.

    As an example, @tomslee, the first video “General Responses to All Questions” directly responds to your question

    Jeff Price

  8. Is anyone else bothered by the fact that the Venn diagram used to illustrate this post is not a true Venn diagram? “music I used to like” shouldn’t be part of the set of “music I like”, or else the statement loses it’s intended message (I no longer like the music that you like).


  9. I call BS on this article (more like an infomercial) — for no other reason than it’s written by the head of Tunecore and posted to his blog…

    please — I know for a fact that many musicians are *not* making a living or any money from their work because people don’t want to pay for it and most musicians are unable to tour due to having to hold down jobs.

    on the flipside of this issue: we are seeing the cult of amateurs all wanting celebrity lifestyles — which is due to a commodification of desire mixed with gadget narcosis and ease of making music with software.

    e.g. the noise has overtaken the signal.

  10. COME ON, Boing Boing!

    “Indie” = Short for “independent”

    “Indy” = Short for “Indianapolis,” also a famous treasure hunter

  11. As someone who runs an independent label, this is a subject that’s never far from my mind. I’d like to point out a few things which may be unique to my experience, but I hope can add to the discussion nonetheless. Keep in mind, I run a jazz label, so I’m sure that adds an entire depth of field outside even the indie rock / dubstep/ blog house / ambient folk noise that comprises a good deal of the indie scene.

    First, I can say without a doubt that sales are up from one year ago. This is in large part due to reviews in print media. I attribute this to the fact that we’re talking jazz here and a good percentage of the audience is made up of, shall we say, old farts who still read magazines and newspapers.

    Second, the loss of brick and mortar stores hurts us because old habits die hard. Those old farts like to go to the record store and browse. The collapse of the physical infrastructure– the stores and distribution– has been remarkable. I worked for a major label in the early ’90s. There were seven major label/distributors. In less than 20 years, that bloated beast has become a skeleton. I’m not saying that’s a bad thing. But the system seems to have forgotten that there are people over the age of 40 who enjoy buying music and feel a bit lost without their trusty, dusty record store and grizzled shop hand.

    Third, thank god for Amazon. They have the worst terms as far as what we make per CD, but it would appear that the old farts who lost their stores can at least find Amazon. So while they pay the least, we sell the most through them and they pretty much do all the work.

    Fourth, the artists may be making more, but they’re working a lot harder for it. Part of the new paradigm is they have to sell merch at the shows. We have some pretty big name guys in the jazz world who have been in the biz a looooong time. They’re having a real tough time adjusting to this new reality. Try telling a guy who was big time in the ’70s that shit ain’t like that anymore. Thankfully, the audience seems to really like buying merchandise at the gigs because they feel like they’re supporting them. That’s a positive change.

    In short, things are not good. They’re not as dismal as a year or two ago, but we’ve yet to break even on a single record. I don’t think I’m saying anything particularly insightful when I say the music business is a long, long way from sorting itself out. I’m happy the artists are making more money. I’m optimistic that there is still a symbiotic relationship to be had between artists and labels. Don’t get me wrong, I adore every artist on our roster like you wouldn’t believe. But without the label losing money on their behalf, they would have to put the product out themselves, promote it, fight for distribution, etc. All of that takes valuable time away which should be used creating. I’m not saying it can’t be done, because I know it can be. But I’d argue that most artists don’t have the inclination to take all of that on.

    1. re: “I’m optimistic that there is still a symbiotic relationship to be had between artists and labels.”

      You’re absolutely right that there is, but it’s going to be a tremendously reduced power position with a whole lot more work involved. You’re right, artists don’t want to handle printing and promotion and merchandising, but given the nearly free marginal costs of distributing their product, they’ll retain a hell of a lot more control and profit percentage over time.

      It’s entirely possible that the labels will devolve into services that compete for the artist’s attention, offering packages at cost plus a reasonable profit margin. This is as it should be.

  12. @all
    i went to last orgcon here in the uk and got to speak to a few musicians. i was mostly interested in the concept of crowdfunding and how/if it could maybe help artists financially as opposed to a historic/classic label-model. where u sign a contract etc.

    what i found out was astonishing. most of the artists present made more money than they ever did before by just releasing their music online and receiving donations via their website or physical sales.
    (albeit none of them had been signed by a label before, but one of them was a experienced guitar player who has been working with a-list rockbands his whole life – he knows hows the business works)

    the fact is.
    if u are a new band/artist today – you have got the greatest assets available to you to make and distribute your music at a low price. you can however not prevent digital copies of your work.
    so just release all you works online. ask people who like ur work to support u via paypal and similar outlets. then come physical sales from fans who will surely like to have a physical artifact of your work, even if it is a collaboration with an illustrator/designer.
    and then there is the money you can make from merch and shows.

    i m not saying everyone can be a rockstar now but the fact is everyone can actually make some good money from their creative work. i think ultimately the question whether or not you can live from your creative work is solely based on a) the effort you put into your work and b) the cultural appreciation of your work from the audience – if it doesnt fit the zeitgeist it might just not work and you cant expect people to pay u for it.

  13. @scifijazznik
    you pretty much some up what the problem is with people in the music industry. firstly, you describe ur target audience as “old farts”. apart from being disrespectful and simply unprofessional you are obviously also missing out on other possible customers. jazz is a wildly loved musical genre. i am in my early 20s and love jazz, so do many,many of my friends. we are not just talking nu jazz here either, i am talking old school from roots blues to latin, american and brazilian.

    you seem to be frustrated coming from a major label, like u said in the 90s to here and now, much like many of the artists on ur label but fact is the world is changing, progressive – like jazz. it would be amusing to think people who ve been infused with the jazz all their life cant adjust to these new rhythms?

    my advice is to analyse ur strong points of sale, like amazon. what makes it work for ur customer base and how can u expand on that? its fairly easy to set up an e-shop but u have to know how to let ur audience know where they can get the latest news, cds and merch. also classic jazz is a dying breed,sadly but gets better with age like a good red wine so u should be able to charge increasingly more for ticket sales etc….

  14. I use a water model when I imagine the music industry changes. It was dominated by a few large smooth waves before (the giant labels) but now it’s starting to get a lot more choppy and unpredictable. This doesn’t mean there won’t be any more huge waves, but they’ll come at more chaotic intervals, and probably have strange, unique shapes and behavior.

    I, and no doubt thousands of others, thought these changes through fifteen years ago and came up with the epiphany that music would evolve from big budget productions and zillion-seller albums to smaller amounts of money being made by many. This is generally good, hell, anything that breaks down the tournament model where 95% of the money is made by 5% of the participants is great.

  15. I think it’s perhaps a bit disingenuous to say that music sales were up 2.1% year on year 2009 over 2008 (and up more than 10% in 2008). Looking at the actual Nielsen numbers, that refers to the total number of “purchases”, which includes singles, albums, music videos and digital tracks. The reality is that the number of individual digital track sales went up each year while the number of album sales declined. Given the price differential between purchasing an individual track and an album, this likely represents a decline in revenue.

  16. What the “everything is great” crowd don’t want to discuss is the democratization of music. Technology is allowing everyday people to make music, too. It’s opening up music to everyone, just as YouTube has opened up videos to everyone, and mobile phones and Flickr have opened up photography to everyone. Some people will only create a few songs, maybe only listened to by family and friends. Some will make a lot of music and perhaps make enough money exclusively from music to live on.

    All creative fields are being affected. Far more “average” people are participating and the income to many “professionals” is going down. In terms of society, this is probably a good thing. It is eliminating a distinction between creator and consumer. Someday soon we will all be music creators, producers, and consumers. There will be differences in degree, but if enough of us do it, we’ll make music for community, creativity, and self-expression, but have day jobs to actually pay the bills.

    1. “Someday soon we will all be music creators, producers, and consumers. There will be differences in degree, but if enough of us do it, we’ll make music for community, creativity, and self-expression, but have day jobs to actually pay the bills.”

      won’t that just be a return to the way things were? wasn’t music originally something that was shared with the community, for celebration, for mourning, for worship? and then once that was done, everybody went back to work in the fields or in the workshops or what have you.

      I for one welcome our new musical community overlords.

    2. “Someday soon we will all be music creators, producers, and consumers. There will be differences in degree, but if enough of us do it, we’ll make music for community, creativity, and self-expression, but have day jobs to actually pay the bills.”

      Oh yay. Every tone deaf idiot who couldn’t find a chord on guitar hero is a “music creator” because he can use technology to cover up a lack of skill.

      Look, I don’t know what the death of giant record companies will have on music over the next 30+ years. In lots of ways (shitty American Idol style contracts, going after children for downloads, etc), I’m sure they’ve earned it.

      But I am sick of hearing people talk about “community” and “creativity” and “self-expression” like that’s what makes good music. Singing, playing an instrument, or composing takes natural talent and a lot of practice. Technology won’t provide the talent, and you need free time to practice. Doing your own distribution, marketing, and sales, takes away free time. It just does. New tech can make some of this easier, or slightly faster, but the musician is still using up time on tech that he could’ve spent on music.

      I’m not saying the big labels were good at supporting artists either, but I do think it’s crazy to pretend the lack of major labels + tech will create some kind of magical musical community. Music requires skill, and technology is a just tool.

  17. Google killed all the musicians on you tube a few months ago, millions of people don,t have pages for their videos , they can never go viral like any other category , its corporate music only , and everyday people post music and don,t know they have no pages . RIP – Music Category

  18. @ ANON 28
    GOD, I really, really hate this argument
    “Doing your own distribution, marketing, and sales, takes away free time”

    This is bullshit, since when did the record companies actually do any of this? You want marketing? You have Google and many many advertisement agencies. Who said you did it yourself? Distribution is automated. They just click a link and they download. You don’t “do it yourself”. Sales happen when people buy something.
    The only artist that won’t succeed are the fake pop one’s. Since they won’t have a mega-corp strong-arming radios and media to play the songs using bribes. That’s ALL they ever did. I hope they die off one by one (unfortunately they won’t, since they lie about losing money. Greedy suits)

    1. Hey, I’m not saying (large) record companies were/are the answer. But it is harder than you’re making out. Google, by itself, is not good advertising. And hiring/dealing with advertising agencies takes time, hiring someone to run the website that customers can “click a link” and download from takes time, shipping out merch on your website (or hiring someone else) takes time.

      I just think it’s very possible “fake pop” artists are not the only ones who won’t succeed if musicians have to manage everything themselves. I’m not arguing for keeping the huge record companies we have now, I just think all the change isn’t positive. (And I still think some of the ideas people had above about tech replacing talent are totally false. That’s the kind of thinking that propped up manufactured pop in the first place.)

      1. Then hire an agent. Most artist instead sign over all of their IP to the record companies indefinitely. So much so that not even they have a say in what they can do with the ‘property’
        If you believe selling your soul to the devil is going to make you rich and famous, you may be right, but don’t forget that he now owns your soul.

        Oh and as a reply to Anon 32, “Not surprising that the guy who runs a download site claims that downloads are better for the artist.”
        Well I’m not surprised that people that run record companies say that only THEY can have control over media distribution.
        You’re full of shill anon 32

  19. Not surprising that the guy who runs a download site claims that downloads are better for the artist. I know a lot of musicians, and artists are making less money than before, not more, because a) nobody seems to think music should be paid for anymore and b) everyone has their music out there and because of the fast internet news cycle, there are less people listening to each individual artist and hence less of an audience available to support them through concert tickets and merchandise. I’ll believe stories like this when they are written by working musicians and not file peddlers.

  20. You know I was thinking about this yesterday. How are independent artists affected? Apparently the struggle is on the major record label level if all that the Blogger posts is accurate. If money is what artists is seeking then SoundExchange ensures artists get cut a royalty check from streaming services playing their music like Pandora.

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