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A Music Industry Case Study
spmkk writes "The NY Daily News has an uplifting look at the fate of a (hypothetical) 4-piece band "making it big" in today's RIAA-driven music industry. The condensed version: A band that sells 500,000 records for $8,490,000 gross ends up (after a few iterations of the new math) with $161,909 in their pocket. Split four ways, that's a whopping $40,477.25 each for a record that probably took close to a year to produce. And this is for a record that goes gold (as per the article, only 128 of some 30,000 records released in 2002 were so privileged). And I bet you wanted to be a rock star when you were a kid..."
To the problem with music, an insightful insider's look on this exact same subject with more analysis and perhaps less solid figures.
It is written by Steve Albini, who produced (besides a few bands you maybe might have heard of) a little no-name act called Nirvana. Everyone should read it. Of course, most people have, which is why i predict it will be linked at least three more times somewhere in this story discussion.
Disclaimer, I don't really understand the pop industry so this is probably obvious, but...
Why is the negotiating position of these bands so weak that they end up with such a shitty deal?
No, I haven't read the story yet :)
:)
I came across this the other week, it's a long but very good read. I honestly don't know how true it is, but I read it all anyway
It's the story of a guy who's mixing a band for a big label, and his trials and tribulations.
The Daily Adventures of Mixerman.
--- There isn't any problem that can't be solved by a small, low yield nuclear device, is there??
1) Radio monopolies. As has previously been discussed on /., this means that few bands ever get play time on the radio. In fact, radio today pretty much sucks unless you really like "Top 40" music. Now, there's a reason that Top 40 music used to be Top 40 -- it was popular (and usually fairly good) music. But that's not really the case anymore.
2) Paying artists. The Music Industry can whine all it wants about "artists getting money" this and "artists getting money that" but the truth of the matter is, Item No. 1 makes the music industry so competitive that, after all the marketing is finished, they can't really afford to give any money back to the artists. Artists in today's music industry are somewhat like the sweatshop girls who make Abercrombie and Fitch cargo pants (or Nike shoes, or you name it): they produce a product sold for an extreme premium but are poorly paid. Incidentally, the premium goes not directly into the pockets of the responsible corporation, but instead into marketing and promotion -- but only of the artists which the record company likes.
I firmly believe that we're about to experience a paradigm shift in entertainment delivery. The era of free music -- as it was in the 16, 17, and 1800s -- will once more be upon us. Recorded music will be free, and niche internet radio/community music sites will be responsible for the creation of new hits and pop sensatia (remember Michelle Branch? MP3.com, not the radio, was instrumental in her stardom). Artists will instead earn their money as they did 100 years ago: in concert. Ticket prices will skyrocket (and fans will pay), and probably move to an auction-dominated system -- which will equilibrize ticket prices. Some artists might be forced to get day jobs. But art, music, etc., they will all move onward...
Statistically speaking, there's a 99.998% chance that my IQ is higher than yours. Get over it.
You guys are ignorant. The same thing happens in the live music industry. Only a tiny miniscule ammount of people make money touring. And there are probably only a handful of people in the world (mostly actors, not musicians btw) who get paid to appear on magazines.
I am a professional musician who recently put out a record on a major label. I did a west coast tour last month where every show was sold out. Wanna know how much money I made?
$80 a day. And that's with the shows selling out.
The live music industry is the same as the record industry. They've worked it out so that the musicians get nothing.
A major record label has a lot of resources that a musician needs to "make it big". They have the capital that is needed to produce albums.
Each album can cost hundreds of thousands of dollars to record. Each music video also costs tens or hundreds of thousands of dollars. Radio stations must be paid off to get a band's singles in the rotation. And the album has to be manufactured, which costs money as well. Then the album must be distributed, which costs money and requires a business relationship that labels have and most musicians do not.
There are dozens of bands in every city around the world that want to make it, but only a handful of major labels. This is why bands get the short end of the stick.
I put out a record on a major label recently. Just finished a sold out tour of the west coast a week or two ago.
I have these thoughts:
1. The article is totally accurate.
2. Anybody who thinks successful musicians make it back in touring or merchandise is A COMPLETE IGNORANT IDIOT. Once you get close to going gold this might be true, but as the article pointed out, this happens to 138 of 30,0000 records.
3. My sold out tour of the west coast was the first profitable tour in almost a decade of touring. I made $80 a day once the profits were tabulated.
4. Merchandise sales are not major sources of revenue, but they help stem the bleeding. Less then half of that $80/day was from merchandise.
5. One word: EXPENSES. It's not just the money you get. It's also the money you pay out. And touring is expensive. Don't be one of those assholes who says "ah but the bands make it back from tours and merchandise"
6. A shitty sys-admin can do $30-40k a year.
7. A top notch musician who has practiced most of their life and given countless sacrifices for their job and has gone gold will do about the same.
8. A top notch musician who hasn't gone gold will be broke.
9. A shitty musician will be in debt.
10. Mama don't let your baby's grow up to be musicinas.
A lot of people don't like anything that gets radio play, because that's the crap that people listen to. I think a lot of people don't like anything that's on the radio, because then they get to act like experts, and play along like they understand the something about music other people don't. For the most part, most people don't have an inner genius that conveys more information about high quality music then the rest of the general public. I stopped listening to the 5 years ago, and I have about 20 CD's that I can happily listen to for extended periods of time. I'm not big into music, but I laugh at the pretensious people who act like they know more about music then the general public, because they've decided they know more.... *grin*
Kirby
I was in the music biz for many years. The most money does not come from artist royalties (discussed in the posting) but from merchandising, songwriting royalties, etc. Some artists also make money from live performances; for some it's just a loss leader. Remember, it's the music business, not the record business.
Heather Meeker, software lawyer
But of course, that's the point. If they didn't take their profits when they do, then many, many more acts would be profitable... but the recording companies wouldn't make quite as much money, and (heaven forbid) would actually have to take on some amount of risk along with the band.
As things stand, the recording companies structure deals so that they always make a profit, no matter what. To the recording companies, an "unprofitable" band is one that they do not have to pay any money. See the small problem here?
"Great men are not always wise: neither do the aged understand judgement." Job 32:9
If Pantera is charging $500 a pop for tickets, they need to re-evaluate where their money is going.
There are dozens of punk rock and smaller alternative bands that tour every year, with or without a big budget. Greedy whores like Bikini Kill won't leave home without a guaranteed $10k payout, but bands like Armchair Martians or Scared of Chaka will roll out for a few hundred bucks TOTAL. Sometimes things get fucked up and they have to play to a small crowd and get paid with beer and food, but that goes with the territory.
In the final analysis, bands don't really need enormous touring busses, 5 star hotels and new guitars for every show. They don't need their promoter taking 10% of their cut. If you cut down your overhead and subscribe to the DIY philosophy, you can make it on your own without a major label rolling out a magic carpet for you.
Remember, most bands you know and love probably started out in someone's basement or garage, and probably borrowed the minivan on the weekend to go to shows. Then again, bands these days are basically born from corporate labels and aren't as homegrown as they used to be.