Recently, the UK government passed The Digital Economy Act which included many, perhaps draconian, measures to combat online music piracy (including withdrawing broadband access for persistent pirates).
Much was proclaimed about how these new laws would protect musicians and artists revenue and livelihoods.
But how much money do musicians really get paid in this new digital marketplace?
This image is based on an excellent post at The Cynical Musician called The Paradise That Should Have Been about pitiful digital royalties. (Thanks to Neilon for pointing that out). I’ve taken his calculations and added a few more.
As ever, this was incredibly difficult to research. Industry figures are hard to get hold of. Some are even secret. Last.Fm’s royalty and payment system is beyond comprehension. (If you can explain it to me, please get in touch)
Note: these figures do not include publishing royalties (paid to composers of songs). The full spreadsheet of data does though. You can see all the numbers and sources here:http://bit.ly/DigitalRoyalty
If you have any experiences, data or royalty statements to share, please post below!
sources: TheCynicalMusician.com, Digital Audio Insider, Basca.org.uk, PRSformusic.com, MusicAlly.com
data: Digital Royalties
research: David McCandless, Caroline Flyn, Toby Slater, James Key
design: David McCandless
358 Comments
Whilst you can make all the comparisons you like about the revenue per stream/revenue per CD sale, the simple fact is that you are falling into the typical music industry fallacy of assuming that a stream is a missed sale.
There are a great many artists that I listen to on spotify that I would not listen to – at all – if I did not have spotify. I wouldn’t buy their CD, I wouldn’t buy a single MP3 from Amazon, I wouldn’t go see them in concert, but I will stream the tracks 4-5 times a month each. I probably listen to around 4000 tracks a month from spotify – ~9 hrs usage a day, 4 minutes per track – and you can fairly subdivide the £10 I pay a month from that. If I really like your music, I’ll buy the CD as well, but only after I’ve listened to it 20 odd times.
Here is how I – as a non musician – see how musicians should be generating revenue:
1) Live performances. If you aren’t doing regular live shows, then you aren’t maximising your revenue and fan base.
2) Added value physical products. Your physical discs/LPs should come with masses of content about the music. Making of, lyrics, even tabs. You want your fans to want to buy the disc for the extras.
3) Streaming. You may not make much from it. You’ll make more than nothing.
Tom, I think your heart is in the right place, but sadly the scenario you have come up with isn’t viable. The fact of the matter is that the system is rigged in favor of the record companies. If global sales of CDs spontaneously doubled, there would be very few artists who would also spontaneously be able to make a living from their music. Going on tour and making added value physical products (or just regular physical products) all require some serious cash up front. I work 8+ hours a day at a job I don’t really like so that I can do those things at most once every two years. That’s eight hours a day that I don’t get to practice and hone my craft. I wish I was born with the desire to become a banker because that seems like something you can do rather half-assedly and still succeed, but unfortunately I was born with the compulsion to make music so I am pretty much screwed.
If i was a non musician or a musician TOM .If iam getting music for free through spotify or any other sources why would i buy or download from amazon ,etc .I think the above would be what a normal human being would think .The only way an artiste can build his career in this world now i feel is to earn some revenue from spotify and other online sources get your music out .Let more people hear it and then think about big live performances,where in you can earn more .For that online streaming sources will have to pay more to the artistes thorugh royalties ,etc ……
I hate this information (because I am a Spotify user) but I love that you published this information, and in such an easy-to-read format at that. I love the whole idea behind this site.
-Sofie
http://g00dl00ks.wordpress.com/
@SofieGladysheva
Most bands now earn a living 3 ways.
1. Licensing/Publishing
2. Concerts
3. Merchandise.
Unless your band can draw 1000 people a night, you can cross out concerts. The expenses of touring are very high.
Slight adjustment: Most bands do not earn a living.
Many well-meaning suggestions above for how a musician “ought to” expect to make a living. The truth is that even the scenarios in the infographic are over-reporting wages. For example, the “profit” on the infographic of $8 per CD sold only takes one expense into account: pressing and printing the physical CD. It forgets the many many expenses that led up to the recording being ready to press and print, for example, paying for the producer and/or engineer who recorded the music, paying for studio time (or for one’s own personal gear to record the music on, if self recorded), paying the other musicians who played on the record (unless you really are a “solo” artist and played everything), paying for one’s time writing the music, rehearsing the music, performing it for the recording device. These are all real hours spent on the work, and the only payment for those hours comes in the form of a sale or a stream of the music.
It’s all well and good to say “a stream on Spotify doesn’t represent a lost sale,” but the fact remains that when someone streams the artist’s music on Spotify, they are consuming that artist’s work and the artist is getting paid squat. Just because a person wouldn’t have heard of or bought the artist anyway does not mean that Spotify’s payment to the artist is a fair recompense for the entertainment value derived by the listener.
Do you think that people will make a run for record shops if music wasn’t available online anymore? Not every illegally downloaded CD is a lost sale. For the musician it’s primarily a lost potential new fan who would have gone to their concerts, bought some merchandise and even may have bought an autographed copy of the illegally downloaded CD. Even more so, that new fan would have told friends, posted stuff about the band on social networks etc.
I’ve always preferred to play a full venue then selling a few more CDs. And I feel flattered to see my band’s albums being circulated on the net. It’s a compliment because someone made the effort to rip and upload it. Seeing others actually downloading it then even liking it makes even better.
I think we could add a #4 which is video monetization. Now thanks to some online audio/video platform, artists/professionals/teachers (…) can make money with their video or audio contents. It is very simple, you only need to have a website and internet connection, then you buy some bandwidth from the online video streaming provider, set up your stream and broadcast live or vod. Then the provider add a paywall to the video, like that people who want to watch the video pay with paypal and they can even make a donation.
I personally advised video monetization for some of my friends, a rock band (DropMotion). They are not super famous (yet) but I told them about the fact that they could broadcast their concerts/gigs live and vod AND make money (usually the venues like it too, and advertise for it). It definitely works for them! They said that they actually bought new music instruments with that money, last time I saw them, made me happy ;-)
Anyway, if you were wondering who does that, I now there is TikiLive.com, MonetizeMedia.com and http://www.DaCast.com which is the one they use because it seems like they are the cheapest but reliable.
Spotify is owned by Sony BMG Music, Universal Music, Warner Music, EMI and Merlin. Most people don’t know that even though it’s common knowledge in the industry.
It is in their best interests (not the artists) to keep the royalty as low as possible because they make more profit. Unfortunately that is a massive conflict of interest and pretty bad exploitation.
Live performance – Ted is right. Putting on gigs is expensive and most gigs with less than 1000 people actually lose money. You need a lot of people at a gig just to break even.
Added value – there are strict rules about what you can have included with a CD and still be eligible for a chart inclusion. (although 3 months free advertising on x factor is fine) It is also more expensive. Even a small addition can double the cost and remember this is all being paid for up front by people who don’t earn any money…
Steaming – There is literally no money in streaming at the moment unless you are streaming tens of millions of tracks per month. Mainly for the reasons above and because people believe free music is the right of all regardless of the consequences to the artist. The latter being the single biggest problem.
I agree wholeheartedly with these comments. The disease of free downloading hurts all artists, with only the exception of those who have already made their millions.
A decision by responsible governments with a social conscious is probably the best way to bring in effective rules concerning illegal downloading.
Maximillion covers most issues in this hairy monster. I agree with his/her thoughts.
btw hope you don’t mind that I reblogged it!
Websites like Spotify can help the music industry exponentially through other means, for example it allows the listener easy access to music that they otherwise would not try, consequently creating a larger fan base that would increase popularity in the band thus creating an opportunity for selling larger amounts of concert tickets and merchandise, every cloud has a silver lining :)
Your silver lining is non-existent- i say this as: a long term artist, who has had over 30 records out since the early 90′s, studied music business law, and run several independent record labels.
The industry has manouevred itself into a position where legalized piracy such as Spotify is its only way of securing an in itself indeterminate future.
Meanwhile the collapsing revenue streams of labels mean the blandest safest bets are signed, and even the majority of these are underfunded and stillborn.
Out there on the road, promoters wont pay adequately unless they see recent press… but independent labels cant afford to pay for a half-efficient P.R campaigns as their cashflow has vanished- causing a ‘glass ceiling’ of funding that many talented alternative acts hit, which causes them to stall beneath the radar of the mainstream, where they tread water indefinitely until most spontaneously fall apart.
We are witnessing a cultural extinction event, commercially viable music exploitation is going the way of the blacksmith.
Well, same thing is happening to mainstream news outlets…smaller bloggers and DIY writers are making up a much longer tail every day. WRT music, I have purchased single songs from both one-hit wonders from the past as well as unknown artists who’ve become internet-famous off youtube. Never would have done that ten years ago. And I listen to songs on Spotify way more often than I download music from iTunes. Obviously the model needs tweaking, but I think Tom above has some excellent points about how things are changing, not dying.
Maybe the labels are dying but the artists aren’t.
The news industry is collapsing and the DIY blogger etc popping up don’t make any money – it’s hobby. Meanwhile thousands of journalists and photographers and other related professions are suffering a similar fate. It costs money to collate and report the news. It costs nothing for someone to copy and repeat it.
Spotify is owned by the major labels they hide the fact to so people think it’s some kind of cottage industry and avoid paying what they should to the people who create the product they actually make money from. Why is it so hard to understand. Have you heard of fairtrade chocolate – it’s the same principal except we don’t have fairtrade music….
As for finding new music. How does that help the artist when they don’t get paid and can’t afford to tour anyway. It actually discourages sales.
@Maximillion (for some reason there’s no reply link on your post), you are throwing piracy and independent content in the same pot, implying (deliberatly?) that all content going coming from non-mainstream sources or going through non-mainstream channels must be illegal.
Apart from that, your math doesn’t add up. How do you know that these artists actually make less money than they would have otherwise? People cannot buy music they don’t know of. Out of all the artists who must accept the reality of the miniscule royalties earned through the channels at the bottom of the graph, how many would have earned nothing at all were it not for Spotify or Last.fm?
I’m not defending the grossly corrupt royalty system of the major record labels. I’m just saying that it’s not as simple as “artists don’t earn as much as they could/should/would.” The market has changed from the grounds up, and many people fail to realise. Even most people working at majors don’t, although some of them apparently know quite well how to exploit it.
While the majors are dying (there’s only 3 left now, with EMI having passed,) the independents are rising. They rely on the new low-royalty major channels for publicity, but they make most of their money through the channels at the top of the graph. They do this through an amortised low-cost way of marketing: supporting great artists, ensuring quality, respecting and caring about their fans. All things that majors have mostly stopped doing a long time ago. People who by physical records from such labels actually get a value in return, which is why they don’t see free streaming as a replacement. Success in music no longer means being able to bribe national radio stations into playing a single and being on the top of some dubious sales chart.
It’s now more about music and a relationship to the listeners than it has been in a long time, if ever. Those who got it are now making the money the majors forfeited. The others, well, by failing to adapt they ultimately go away, and I for one am not sorry.
Yes, Will Fieldhouse. You are correct.
so if my maths (and the above data) is correct, then the entire world population would need to listen to your song once on Spotify in order for you to make a little over 1 million UK pounds from it …nice :)
Look at it as free radio – pre internet, the record-selling industry would needs to spend hundreds of thousands in payola to break an act in the US. Now fans are doing that for free via a far more powerful medium of personal recommendation.
We also need to get away from the idea that anyone has “the right” to work once and be paid forever…
… and REALLY need to get away from the idea that “the right” to work once and be paid forever can be bought and sold so corporations accumulate the vast bulk of these rights…
… and REALLY REALLY REALLY need to get away from the idea that these corporations then have “the right” to buy political decisions… that impose laws on the rest of us, which specifically break Internet freedom, and turn it into a surveillance and control mechanism.
–
Pre-napster, fewer than 3% of musicians signed to major labels made more than $600 / year from selling records. Musicians never made money from “selling copies” to start with – a big part of which was to do with the utterly exploitative deals that record-companies imposed on them.
More musicians are making a living from music now than at any time in human history – and it’s because of the internet.
“More musicians are making a living from music now than at any time in human history – and it’s because of the internet.”
Really? What is your source of information for this fact? My experience seems to tell me this is not the case.
Unfortunately not true.
Free radio with a product that is not free to create. If shoes are free footlocker is bust. If coffee is free Starbucks is bust. Doesn’t compute. Spotify – owned by major labels and Chinese corporations is in it it to make MONEY. it’s not some cool kid in his bedroom you are defending here. It’s a bunch of corporate whores who would do anything to make profit.They want to make as much money as possible so they don’t want to pay the artist!!!!! Why is it so hard to understand that it is not fair!
He didn’t say it’s fair, he said it’s less unfair than what came before. People automatically compare Spotify & Co. to traditional retail as if it’s the same thing, and use that false assumption to claim musicians make less money. It’s a logical fallacy. Nick’s post shows a different angle: who’s to say that Spotify doesn’t (also) replace traditional radio? With the difference that artists don’t have to pay $750’000 to get a single played on the air, but actually can get “airtime” for free.
Also, please refrain from comparing arts or digital goods with physical goods, these comparisons never work. They are usually used by industry lobbyists to confuse people. No, making music isn’t free, but that’s not new, it never was. Your comparison confuses a work and its copy, a fundamental difference. Copying a digital copy is (for all intents and purposes) free, creating a CD copy or a copy of a shoe design is not free.
“I’m not defending the grossly corrupt royalty system of the major record labels. I’m just saying that it’s not as simple as “artists don’t earn as much as they could/should/would.””
uhhh, yes. yes it is that simple. and yes, you are defending the “grossly corrupt” royalty system. albeit unknowingly and indirectly.
“pre internet, the record-selling industry would needs to spend hundreds of thousands in payola to break an act in the US”
Agreed but, people didn’t get the power to replay the song at will anywhere, they eventually had to go and buy the album or the single if they wanted the song. With spotify giving you the chance to play and replay anywhere I don’t see why anyone would go and buy the music… And realistically as more and more acts join Spotify a payola system will take place for some to come up to the top of the surface.
@Rub: Never heard of a mixtape, have you?!
I was talking to the sound guy for a very popular rock group a few days back.
He’s been with them from the start. When they record albums, he’s in the studio. When they go on tour, he goes with them. When they all started out, he and the band, the tours where a lot of fun. They’d travel the world, and have a brilliant time.
Now they’re all in their 30s and have a wife kids at home and touring sucks – none of them want that life any more. The sound guy’s son literally started to crawl while he was away. They’d like to make albums, but there’s just not any money in that. So they’re probably going to wind the band up.
Bit of a shame, that.
That to me seems more of a time-schedule issue than a money issue.
None of them want to work you mean? I work 12 hour days 6 days a week to support my family. I am in my 30′s and would love to stop but cant, as my family and I need a place to live and food to eat. Bit of a shame, that…
So excuse me if I don’t feel sorry for a band that does a live gig 4 times a month or less.
BenJohn, I work with bands (some who were on the majors and some trying to break in). You are absolutely correct and it’s the same all over the industry… with the majority of bands in their 20s, 30s, 40s. They work their fingers to the bone and even the best-planned tour can have one or two unexpectedly weak nights which put the whole 2-8-week run in the red. Imagine missing your baby crawling, thinking you’d at least come back with grocery money, and having one snowstorm…or a college basketball game your booking agent wasn’t aware of…kill the draw on the most profitable show of the run. You get to come home empty-handed after weeks of no sleep and fast food. This is the reality even for somewhat successful bands, all but the top few. John insults how hard these artists work. I don’t know any acts, save the rare handful who sailed through the big-label years and have plenty socked away, who have the luxury of working 4 days a month. Try 7-day weeks full of travel, bedbug-ridden motels, and hoping some folks each night bought a bit of merch to boost the tour revenue. Spotify isn’t radio, as said above, it’s on-demand. It’s a sales-killer. The expensive and grueling risk of touring only *hopes* to mitigate what piracy and free streaming have done to strip the consumer of any sense of ethics when it comes to purchase of digital or physical. Most musicians I know who are still in the game work hard. Unbelievably so, often supplementing income with jobs when off the road. Let nobody say they have it easy. None I know do.
no one said you should feel sorry for the individuals in the band. if you like music, then it’s simply a shame that much of it won’t be recorded by seasoned professionals in original bands anymore.
it’s nice that you work hard to support the family you started. but i don’t feel sorry for you while i work hard making art that people enjoy for a living. i don’t think many other hard-working artists feel sorry for you either
granted we all know that the internet has made a huge difference on the music market .
but this is revenue by the month for each place to make min. wage
more than likely there selling at all these places at once so they would
have to sell less at each place a month as long as there selling at all of
them at the same time.
the ones that really get hurt is the co writers , use to they would get
a percentage for each album sold weather there song was a hit or not
simply because it was on the album now you get to pick and choose individual songs
if there song don’t sell no money .
they also don’t tour or have merch. or anything else except the song they co-wrote or wrote that the artist liked and put on there album .
but i wonder if co-writers get paid for there songs being
performed live by the artist or band whether its a hit song or not ?
Yes co writers should get paid for live performances if the prs form is filled in. The facility is in place. In reality many artists writers/co writer don’t receive their royalties.
you don’t know much about how this all works.
Well… All I can say is that this is the first time I’ve ever seen more zero’s on the artists revenue stream than the labels
As a DJ and a training producer I jus wana say I love making music. It is the best drug in existence. But wen I release the tracks I am currently makin, I don’t care for a big or any payout. I will jus b ecstatic by people goin out an gettin massive to my music. It ain’t as if I’m rich or even well off I’m lower workin class livin very poor in England tryin to support my family. It’s jus I work for a living. Music is my hobby and artists that adhere to this policy tend to be a little better at their craft.
Really? Someone that spends 4 hours a week is going to be Better at their craft than someone who spends 60 hours a week?
Yep every great musician, performer, dancer, athlete proves that point. That 10 hours a day practising is for mugs only.
Conversely, doing something professionally doesn’t automatically make you good at it. There are many, many really great and talented artists that write and perform only as a hobby. There are many, many professional musicians that many will consider artistically bankrupt. Just look at some of the turds the major labels put out.
You can make good (and successful) music without quitting your job.
that’s the stupidest thing i have ever read
can’t see radio earnings.
streaming = radio, not ownership
pls compare adequately.
Its a shame, that it is so hard to earn a living being an Artist and its even more of a shame, that so many people are trying to excuse the simple fact, that they don’t want to pay proper for that music.
Not every one can be at the Top of what he is doing. Not every one can have Shows with thousands of people watching, or millions of fans. In the same way: not every one can be a Boss. There are people who just do the normal work and they can live from it.
To write, record, produce and mix a CD can take a lot of time and even more time if you want to make quality music. So you should be able to live from being “just” a recording musician who does not play live.
As a medium famous Musician it is even hard to earn much money from performing. If you play in a Band you have to split the income, so you earn almost nothing. Sometimes you even have to PAY if you want to support another band.
It is so easy. You want something. Pay for it. Pay for it properly.
No one would ever say it is ok, to work your ass off for free, just because you have the minimal chance to earn something later.
It is a stupid excuse to say: If I would not listen to it on the internet, I wouldn’t buy it anyway.
Pray tell, why is it a stupid excuse?
I can’t count the number of artists which are well represented in my CD and record collection that I would never even have heard of without the Internet.
It’s not a stupid excuse, exactly because listening to music on the Internet is free. Meaning: people listen to stuff they otherwise wouldn’t, and sure as hell wouldn’t pay any money for. That doesn’t mean lost money, because the cost of creating a digital copy is practically zero. (If that’s not the case, then the artist has been screwed over by their label).
I also don’t think it’s unfair to the artists if people who don’t like their music can avoid buying it. It was not nice for the customers before either.
it’s a stupid excuse because most new music is discovered on the internet. curators like spotify and itunes are just popular websites that host files, you can’t credit them for the existence of the internet, nor can you use the internet as an excuse to de-value anything you see fit. if you do, you are actually being quite stupid
The linked document can not be downloaded without logging into Google before – I do not want to sell my privacy to google trackers, so please put the document on a platform where it is possible to download without having to create an account – e.g. something like YOUR WEBSERVER – man, this was so dead simple 10 years ago, why nowadays the most simplest things can not be accomplished without having an account at the companies, that trample over our privacy rights? Seems to be a mass psychosis or some kind of collective brain desease, even the OWS people need big comoanies to chat to each others – plain dumb? Please just start using your OWN webservers again, thanks.
Hello Bughunter,
Can you be more specific about which link you can’t access without a Google login?
If it’s a data sheet you’re trying to look at, we set all of them to ‘public’ so a Google account isn’t necessary.
Alex
This is ridiculous how people believe Spotify makes artists lose money. I for one love music and I know I am not the only one who actually buys music that I enjoy. If it wasn’t for Spotify I would never even purchase a song by an artist. Before Spotify there was Youtube, and how much did people make off of Youtube? Barely anything as well because people would listen to the song on Youtube and just illegally download the song. Even if its a fraction that the artists are making, it is something rather than nothing.
An artist I love will always get support from me regardless if I stream their music for free because I will purchase their album, or their songs, and in the future hope to go to a concert. Spotify does NOT harm the industry, it helps artists gain profit and exposure all in the same time. You’re pretty much getting free advertising. Know whats funny? The artist “Oneway” was removed from Spotify and that was the only place I can really listen to their music. Now I can’t; I was not going to purchase their music from the beginning, and now instead of making a fraction of a profit – they will make none – I will just listen to other music and if I feel like I love the song, I will purchase it from Amazon.
Once again, Spotify DOES NOT harm the artists. It grants exposure, it allows artists to gain an even larger fanbase and allows people to listen to music that they have not heard of. And the fact that Spotify is now the sole music factor on Facebook, a million plays in a week is far more likely than in a month.
“Before Spotify there was Youtube, and how much did people make off of Youtube?”
Google pays the big four, that’s what.
There are a lot of comments here from people that simply refuse to believe that something as “awesome” as Spotify can be so detrimental to artists and prone to complications.
Youtube was breaking copyright law for years the law and because they are so powerful got it away with it until they were sued. They now pay a crap royalty and make billions from advertising.
Spotify does not pay a fair royalty to artists. FACT! It is owned by the major labels so there is a massive and unworkable conflict of interest.
You are so naive it’s incredible. How does taking a product and reinforcing the idea that it free help the artist. The idea of an online jukebox is great but they are ripping off artists. Unless you are in the small minority of major artists it is useless.
It comes down to people claiming they love music but having total contempt and a lack of respect for the people who make it.
You compare for starters a cd album with an mp3 song.
I just stop reading when you do that.
I should have too =)
I think all this talk about the record companies screwing everyone is a little off base. Anyone in any kind of entertainment business is going to have a hard time making a living. Whether you’re a musician, or an actor, or an athlete, only the top few percent ever really make a lot of money. Everyone else fights for scraps. And I think the reason for that is that there’s a tremendous amount of time and cost involved in writing, production, marketing and distribution of a product, so you have to sell a LOT of whatever you are producing so everyone in the chain gets a share. Very few artists can do that. I’ve played on 5 albums for various artists over the years and the sales barely covered the recording costs, so I have a little experience here. lol
There are great labels and management companies who are in the same boat as artists. The majors are different and they own Spotify. They just care about money not the artist. Fair point it’s business after all but without the artist their is no business. This is the same as banks, corporations and all big business. All artists want is a fair deal and experience shows big organisations have to be forced to do that because they will never do it voluntarily.
While I have no argument with the raw figures stated or the pitiful amount of money the artist receives, as someone who has done an independent label for 10+ years, I need to mention that the money split between the artist and label represented in the graph doesn’t hold true for a lot of indie labels. My label and many others follow the 50/50 split of profit established by labels such as Touch & Go and Dischord in the 1980s. We also do a 50/50 split of digital revenue with expenses (accounting, very minor production work) being taken out of the label’s split. While this is not the rule for indie labels it is fairly typical. The split in the artist/label split in the graph is truer when applied to major label/artist relationships, rather than indies.
Caveat: With very few exceptions, major labels are going to generate more sales than indie labels. So even with a 50/50 indie split, the money made off of digital sales is still pitiful in comparison to when physical sales were king.
dont like this
The reason why the music debate has been going on for so long is down to several points of clash:
– Could the music industry survive without these proposed new measures in effect?
– What effect would this have on the public in terms of whether they would get the music or not?
– Should it be punishable by law to illegally download (with severe consequences?)
While we all know that technically it is illegal to download media for free when it should be purchased, I think a grey area should be acknowledged here. Whilst many people illegally download, many argue that it is through the illegal downloading that they might download the music of an upcoming artist and then if they like it, go ahead an purchase their music. This suggests the idea of illegal downloading being used as a sample for artists. Others will argue that free software such as Spotify Open can be used for the same purpose without infringement of the rights of the artist.
Also, a greatly debated opinion is that do musicians really need this? After some debate I feel the answer is no. Whilst there are musicians who do not make as much money as others – the fact is that the most illegally downloaded albums correspond directly with the most purchased albums. The proportional effect is essentially the same. The more people who illegally download it, the more popular it gets and the more people purchase it, or vice versa. Musicians who (quite rightly) complain that the illegally downloading is bad for them are correct – but the less popular they are the less likely they are to have their music downloaded at all, purchased or illegal. The proportionate effect is the same. I conclude that artists can live with it. After all 50% of their money usually comes from concerts and I’m fairly sure that at least half the people who attend would have at some point downloaded one of their albums for free. It’s all relative.
Despite this, we should remain vigilant. Illegal downloading, whilst at the moment not a large threat to the music industry, has the potential to become one if it spreads too fast.
Overall I think that it SHOULD be made punishable by law, but there should be a lot more leniency in terms of the sentencing. Feel free to contribute anything I’ve missed.
50% comes from concerts is totally bogus. Touring is incredibly expensive is loss leading until you get big enough to make money. Why are there many “experts” with no knowledge of what they are talking about. It’s more like golf or tennis – if you are a top 10 ranked and successful you make plenty of money if you are on the way up it’s a massive struggle to even get to the competition and pay your expenses and even more so because there is no money!
It may be 50% for Beyonce but not most bands on the planet.
This is the kind of infographic that makes me want to give up my dreams forever and become a sales person at the foot locker. Everyone needs shoes. I think the way to be “successful” in music is to put absolutely NO reliance on sales and just take pleasure in the art form itself. Find something else to do to make money. . .unless you are already famous or your parents were you’re not going anywhere.
Two things i’d be interested to get peoples thoughts on are….
1. Why are labels viewed as ‘the enemy’ by so many. Is that a fair statement?
2. Do people think policing of the internet is completely unacceptable?
Major labels are big international businesses and act in the same way as other big corporations. Oil companies, banks etc. Their bottom line and profit to shareholders is the only thing that matters. That means they will crush anyone to make a profit and that includes their own artists. Spotify is also exactly the same and owned by the same major labels and other dubious businesses but they’ve made people somehow believe it’s something else.
Downloading music for free became so easy everyone did it but it is actually illegal and there are laws against it. It feels different but the result is the same. If everyone just takes what they want from the corner shop it won’t last long.
No, it’s not the same. I’m agreeing with a lot of your views and points, but please stop comparing physical goods and digital goods, and read up on the economy of non-scarce goods. Old-world rules can’t simply be applied 1:1 to the new media.
Excellent post and some interesting comments here.
Unfortunately a lot of very naive views the reality of being a musician.
The modern artist has to invest a fantastic amount of time and money in order to be any good in the first place. Years of practise, thousands spent on equipment, rehearsal costs etc. You could have any degree in less time than it takes to be a really good musician.
What the latest figures actually show is that even if you manage to be reasonably successful (4,000,000+ plays on Spotify/1600 downloads a month) you can’t make even enough money to live never mind continue with your career. Technology has made it cheaper to make records but still costs time and money to create, record and market.
“Just go out and do more gigs.” If there is no money you can’t – it costs money to drive around the country doing shows as a solo act and if you add musicians, hotels and food, venue costs, parking it costs even more. It’s not rocket science.
Yes U2 and the like make millions touring because millions of people pay £100+ a ticket to watch them but that is the exception. Phone up your local decent small venue and see how much it costs to put a gig on. You’ll get a shock. Multiply that by 20 cities and add the other costs. Your bankrupt!
As for the bizarre maths showing download and streaming are closer than the table suggests. Obviously they are not and that is misleading. It doesn’t matter whether you listen once or a million times to music you have bought. With a stream you are renting and paying a royalty. The point is it is an extraordinarily low amount and is not enough so undermines sales in the same way as illegal downloads.
Streaming services like Spotify are ripping off musicians by claiming it’s radio. It’s not radio it’s a jukebox but because it’s owned by Sony BMG Music, Universal Music, Warner Music, EMI and Merlin (how many people know that?) they are planning on earning money in other ways so they don’t care as much as they should about the artists. In fact it works better for them if they can keep the artist payment as low as possible. Just a slight conflict of interests….
Always astonished by some of the negative and frankly creepy comments some people make as if the artist deserves to be ripped off. Most artists i know would be happy to just make enough to live and continue making music. The point being it’s almost impossible at the moment and if it doesn’t change all we will be left with is reality show garbage and novelty records.
It’s very tough being a musician these days but the world would be a worse place without any.
Maximillion, thank you for your informative comments and posts. I have read through all of the comments and yours are the only ones that consistently make sense, and I totally agree with you that it is quite unsettling to see peoples mis-guided opinions but I am seeing reflections in other sections of society, politics, banking etc… it seems the big corporations hide behind these deliberately set-up smoke screens of confusion all the while trying to make as much money and hold onto as much control as possible, all the while, leaving the general public to argue over the points that they THINK are the real issues when really many of us have no clue! Your examples of everybody beleiving music should be free is a good example of how people have been brainwashed by popular culture into thinking, every musician is a Jay Z or Beyonce or Bruno Mars capable of arrogantly commanding millions in revenue when that is clearly not the case.
I am a producer and songwriter and have had a little success with sync deals and hope to someday quit my day job, but I am under no illusion that that day will actually happen with “more gigs and more hardwork” that is way too naive. The one way to increase my chances, along with making sure I am the best musician I can be, is to make sure I understand as much as I possibly can, the inner workings of the BUSINESS of music and what motivates the corporations, what goes on behind the scenes, what new trends are and staying flexible enough to be able to move with changes in the market. I know its sad, that as a musician, that is what I feel I must do, but I am not greedy, as are not most musicians, but there is no-one else out there that is going to look out for my interests, so if I dont, who am I expecting to do it for me…..?
Maximillion, if there is anyway I could stay in touch with you I would greatly appreciate access to your incites, please let me know if you have a blog or twitter account? my email ad is jbalze_the1@yahoo.com
Many thanks
Jon
i see alot of comments saying record companies take a big percentage. but what about indie bands that make deals with spotify from sites like cdbaby, how much do they get?
Spotify now pay much more per stream as the revenue is growing with ads and subscribers.
So almost 30 times higher as in the chart.
http://www.spotidj.com/blog/?p=264
http://trustmeimascientist.com/2011/09/05/how-much-does-spotify-pay/
Great post, wonder if it could be re-done sometime soon with up-to-date data and maybe comparing this with radio plays instead/as well as. Currently I hear Spotify is paying as much as 4x more per play as stated here.
It is great that the conversation continues. The Cynical Musician has just added another interesting post about Spotify revenue streams. http://thecynicalmusician.com/category/cat-blog/music_business/. Faza posted it 2 days after the Forbes article on Spotify’s Daniel Ek – http://www.forbes.com/sites/stevenbertoni/2012/01/04/spotifys-daniel-ek-the-most-important-man-in-music/
I’m a musician and I say steal it. fucking steal it away.
Money = Touring.
Where can I listen to your brilliant music? You musician you. I can’t wait to be blown away!
If an artist thinks the system is exploitive, then they should find another line of work. Why would anyone pay for something they can get for free? This is an especially pertinent question when the free acquisition of the product is absolutely legal! Whose fault is it that it’s legal? The artist’s! If the artist is agreeing to the terms set out by the label, then whose fault is it when those terms come to call?
When musicians leave the field en masse, maybe there will be a change. Until then, market forces simply will not support full-time musician as a career. It does no good to prop up a market with laws or regulations. Markets will do what they will do.
And if one musician says “I won’t work for this,” it won’t be enough – not if there are 50 other “full-time” musicians who are ready and eager to sign whatever contract the label puts under their noses. It will take a full-scale exodus. Things won’t change until that happens.
Two words for you, my fine friend: victim blaming.
the system is evil. but what’s worse is when people use it as an excuse to disrespect an artist’s release terms. you enjoy art yet you think artists should find a new job since you’re too cheap, or daft to understand why one should fund it.
well then go watch someone drive a bus the next time you want to be entertained. hypocrite.
Would love to see broadcast radio (I’ve no clue on that pricing model), resale (assumed $0/$0) and loan programs (library – also assume $0/$0).
Think back to WHERE you saw the download links for limewire ,Kazaa,bit torrent ect..That would be Cnet or Znet owned by CBS-Viacom with partnerships and of course download links to ALL of the big boys behind SOPA,PIPA & now OPEN the next incarnation of this rather nasty set-up. Who was it that gave step by step instructions on how to use this software using COPY WRITTEN music and movies/tv shows as examples ? Who was it that demonstrated the effectiveness of these very programs in side to side comparisons once again using COPY WRITTEN music and movies/tv shows as examples ? And last but no means least Who was it that hosted reviews & blogs extolling the comparative virtues of all of these EEEvillle file sharing programs ? Why that would be our usual suspects Cnet,CBS-Viacom,Disney,and all of the rest of the SOPARISTS. Just a thought but by distributing and providing step by step instructions on effective use of the file sharing software according to the very laws being used to arrest every one from teenagers to Mega-upload wouldn’t that make the SOPARISTS as guilty if not MUCH more so ?
Also wouldn’t providing the tools necessary, step by step instruction, comparisons and ongoing encouragement be legally regarded as IMPLIED CONSENT or at the VERY least entrapment? Just askin. It would seem to me that the first stop of call for artists to receive (much deserved ) compensation would be the media companies that worked so hard to create, distribute,and encourage the very file-sharing tools they now decry
So to sum up The very groups that originally provided the tools necessary, step by step instruction, comparisons and ongoing encouragement for citizens to download media from the internet (with their APPARENT blessing) are now pushing punishing the leaders of any countries that will listen for not handing over defacto control of the net and arranging to incarcerate ANY citizens using the VERY tools they worked so very hard to get into use…Am I missing anything ?
or you could just pay the artist for their work and not use some tired old evil record industry as an excuse. artists don’t care about how much you hate the system. they also hate the system, and they hate when you use the system as an excuse to rip them off.
Funny, how much is a CD in your country ?
In mine it’s about 15 €, not dollars… About 20 USD…
How can we buy something so expensive ? That’s a good question ? To me mp3 sound like s..t, and I can’t find .wav or .cda to download too… That’s a big problem… Again…
I saw a piece of this infographic (the first 4 scenarios) on facebook and did the math myself. The numbers are quite wrong on three out of four of those instances, and it’s unfortunate that the original “mathematician” who came up with this ludicrous spreadsheet has had the ability to metastasize this misinformation.
Assuming the difference between the $9.99 and the total revenue figure (artist revenue + label revenue) is the total expenses, the only math that checks out is the cdbaby scenario (must sell 155 units per month). “Unit” equals 1 CD.
In order for the artist to receive $1160 per month:
For a self-pressed, if costs are $1.99 per unit (the difference between $9.99 and the $8.00 the artist receives), the artist has to sell 145 units.
For the retail album, if costs are $2.49 per unit, the artist has to sell 580 units, not 1161.
For the album download, if costs are $3.70 per unit, the artist has to sell only 184 units, not 1229.
It would be time-consuming to continue on this road, but please go back and check your math before spreading misinformation in an infographic.
I think you’ve missed the point completely there Lauren. You seem to be adding the label’s share and the artist’s share, and then dividing 1,160 by that number to get the required units. But the artist doesn’t get the label’s share, so that really doesn’t make any sense.
Not sure where you’re getting “cost” from either. I mean, obviously you’re adding the artist and label shares, then subtracting that number from the retail price paid, but that isn’t really anybody’s cost in the normal sense of the word. That number is just whatever the artist and the label don’t get from the sale.
Let’s try again, except use the artist’s share only this time, since that’s what they would actually be able to use to buy bread, milk and Ernie Ball’s finest.
Album download: 1160 (target price) / 0.94 (artist’s earnings from one sale) = 1,234
But wait! The graphic says 1,229. Indeed. I think we can assume that the revenue shares were rounded for ease of presentation. Let’s say that the actual number was 0.944.
1160 / 0.944 = 1,228.8
Near enough I think.
Interesting use of “metastasize” too. A bit dramatic maybe?
Interesting read and i see tons of interesting comments, its crazy how this conversation is still going on. #ClassicBlogPost and kudos to the author. I myself am an indie producer and artist and I own my own Indie Music Production/Marketing company I Am A Brand Media Group LLC.There are PROS and CONS with all of this
My opinion is that giving out my material for free is actually the only way I can compete w/ the majors. That is if I want to stay relevant so its a must for me to have a shot of being successful. I wouldn’t have the budget to get on major radio or distribution to the Wal Marts & the Best Buys nor would I have the budget to perform at arenas and shoot million dollar videos or get on the BETS or MTVS or VH1s. Another fact is that even though it pays little, it still pays, and if your an artist or a producer who is really trying to maximize his/her revenue you must take advantage of all avenues and not really on just one promotional or income source. If spotify is playing such small returns how about making up for the revenue by monetizing your youtube videos and your website or your blog w/ google ads? Thats what I do. Sell merch on your website. OR learn more trades and offer more services such as promo services and graphic designs, etc. As a matter of fact when somebody visits my website I make an average of $0.05 per visit due to PPC ads and Google adsense, so even though I’m not getting paid for the free download or stream that a fan/potential fan took advantage of, I’m still generating some form of revenue(even though it is little) just for the visit(on average).
Now the issue is with the payment model it self, & the payment model is 100% NOT FAIR to the artist and all of the contributors of any music project. It has nothing to do w/ the fact that a fan gets the music for free, that is irrelevant.
A cable tv customer gets to watch Jurassic Park for free whenever TNT plays the movie because they have paid the cable tv provider for the access. The difference is that THE CABLE PROVIDER PAYS THE NETWORK for their content so they can have a customer base in the 1st place. The difference is that THE NETWORK PAYS THE MOVIE COMPANY for the rights to show the movie. And the difference is that THE ADVERTISERS PAY THE NETWORK to display their commercial. So in this modern day of the internet and of free music, it really boils down to the royalties that are being payed by these sites/services and those royalties that are being received by the labels and the artist and contributors. The problem lies when sites like Spotify and Rdio pay such little to the artist. This is and is not radio. It is radio because it is free for the listener (not including satellite) and they generate their income by commercials/ads, at the same time it is not radio because fans control the playlist and not payola & that is the main reason why a fan is interested in a Spotify thus whya pay for play or web traffic makes sense, I just want a fair compensation!
I understand that if a million people are all streaming a million different artist at the same time then you have to pay a million artist that fee, as oppose to a million people listening to 1 song at the same time since radio controls the playlist BUT that is the service you offer and your advertisers and premium members will still cover the expenses for you, even if you automatically play ads or display pop up ads every 3 or 5 songs such as Pandora. If Youtube or Spotify or w/e website is generating money whether it is by ads or premium memberships or premium subscriptions, or one time fees, etc. then I should be given a certain percentage on top of that stream(similar to reverbnation even though it is minuscule) or simply just a better rate.
Artist are the reason why fans and customers are streaming or downloading music on the website in the 1st place. If it wasn’t for your favorite band on these websites then there would be no listeners or fans which means there would be no advertisers which then mean there would be no website. Also most people here are not calculating the cost of distribution(which is fee based or % of sales/revenue based therefore eating away at the revenue), yet alone other cost such as recording, mixing, promotion/marketing, etc, but this is the cost of the music business, has been and always will be.
At the end of the day its a double edge sword. It means us as INDEPENDENT artist and producers and song writers have to work harder AND smarter just to make decent money. We no longer have to depend on a major to get our music out to the world and in addition we get to control the type of music we release. However we no longer have a power house machine behind us if we were signed and promoted BUT on top of that and at the same time we get to keep the majority of whatever income we do make if we do make money since we own our own music and publishing.