Money in the Music Business

paulbd writes: "Electronic Musician has a good article on the economics of selling music on CDs. Its a sobering read that gives some of the hard numbers that do a little to counter the sense of record companies being vultures. Recommended for anyone who seriously imagines making a living from selling music."

Comments

Compare to Albini's "The Problem With Music"

[no_such_user]

Compare this to Steve Albini's somewhat infamous "The Problem With Music" article which appeared in print a few years ago. Here are links to it: (note that these are links to the same article -- pick one at random)

http://www.mp3.com/news/222.html
http://www.musicalevolution.8k.com/albini.htm
http://www.negativland.com/albini.html
http://www.ram.org/ramblings/philosophy/fmp/albini .html
http://www.musicianassist.com/archive/article/ART/ a-1098-1.htm

Reduce costs with technology

[Sloppy]

A typical recording budget for an artist's first album is between $250,000 and $1 million. The record company will also spend approximately $250,000 to $500,000 to market a new artist to the public. A typical recording budget for an artist's first album is between $250,000 and $1 million. The record company will also spend approximately $250,000 to $500,000 to market a new artist to the public.

These are the numbers that need to be reduced to make music more profitable, and technology can help.

It's time to get rid of CDs. Vorbis (or, *sigh*, MP3) or even wav/aiff, combined with HTTP or FTP can do that. And by getting rid of the middlemen, You can either reduce the price (thereby increasing units sold) or make a greater profit per unit.

As for marketing, some music (e.g. heavy metal) is already getting by with virtually no marketing at all, so spending $0 here has become a proven strategy (though some of the musicians are unhappy about it ;-). Granted, that won't get you Big Bucks in sales, but it does work. One nice thing about the Internet is that messageboards, usenet, etc. allows word-of-mouth to travel a lot further and faster, so marketing gets replaced by just having better-informed and connected customers.

That leaves the production itself, and of course the musicians' time/labor. Personal computers can replace some of the once-expensive capital (my brother just mixed a friend's recording on his Mac). There's still some equipment and expense left here that can't be eliminated, I think. But it's a start...