A colleague sent me a link to this article, which I found to be quite enlightening. The music industry has been in a constant state of change over the past decade, and the former archaic manner in which it operated is obsolete. Whether or not the majors want to admit it… Digital is King, and the number of albums sold no longer dictates an artist’s success.

The passage below from the article illustrates the manner in which artists truly no longer need a label, and can be self-sufficient through promoting and selling their music in all forms digital.

“Let me provide context. The financial food chain of the music industry used to be as follows. A distributor sells a CD to a retail store for a wholesale price (let’s say $10). The retail store marks the CD up to $16.98 and make $6.98. The distributor takes a “distribution fee” of 20% of the wholesale price (in this case $2) and passes the remaining $8 back to the label.

Compare this to self-distribution to iTunes though TuneCore: an artist makes $7 for each album sold at $9.99 and $0.70 for each song sold at $0.99. By selling just two songs on iTunes for $1.98, the artist makes the same amount of money as if a $16.98 full length CD was bought. An artist sells one digital album for $9.99 and makes 500% more than a signed band. The price may have dropped for the music consumer but with self-distribution the artist makes more money”

The article goes on to show just how dramatically digital performance royalties have exploded. It’s an interesting reminder to all music industry professionals, artists, and bands to stay abreast of these changes – and to know the truth about the reality of the situation, not just what those who still believe only in albums sales try to force feed us.

T.Lynn

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For many members searching for jobs in the music industry, each little bit of income helps, and streaming seemed to offer hope of another revenue source to help make a living from music. However, Spotify, the streaming application that is immensely popular in Europe (and due to launch in the US soon, has come under fire along with the performing rights societies about the minuscule amount that artists actually receive.

Hypebot recently reported that Spotify paid Lady Gaga just $167 For 1M Plays:
Lady Gaga’s “Poker Face” was one of the most popular tracks for 5 months on Spotify; being played more than 1 million times. But according to reports this weekend, the Swedish Performing Rights Society only paid her $167. If true, it confirms other complaints from other artists like those of Swedish musican Magnus Uggla who pulled his music off Spotify declaring, “I’d prefer to be raped by Pirate Bay than played on Spotify”.

When an artist starts out with earning no income from their music, they are quite happy to give it away for the exposure it may create. Obviously it is easier for a small band to offer a free mp3 and say “we may have lost a potential $1000 in order to gain some new fans”, than it would be for Universal to do it with a Lady Gaga single and consider losing (potentially) a lot more.

However, the idea of exposure still remains. Streaming can be a way for people to try out new artists without committing to a $15 album (of which, Universal made many, many terrible ones). There are already reports saying that streaming is drawing consumers away from P2P sites, and with the Pirate Bay trial and Joel Tenebaum ruling gaining so much press this year, some users will be scared off using such sites in the future. The Pandoras, Spotifys and LastFMs of the new music industry are an essential part of artist promotion in my opinion, and so I would consider pulling your music away from them is a foolish move.

As there is no way to measure the direct income derived from a person who streams two tracks, then goes to buy them from iTunes, and then pays $40 to see the artist in concert, it can be hard to judge.

I would stick my neck out and say that it helps though.

We’d love to hear your response on this – comments around the Music Jobs office range from outrage at the royalty rates for artists to “that’s about $166 too much”! Feel free to comment below.

Lee Jarvis

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