Slashdot Mirror
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..."
"Blame it on piracy! Piracy, robble robble robble..." - Hillary Rosen
Todays rock bands don't even get the supermodel girlfriends, they get goth chicks with piercing in 7 different places. And Heroine, Cocain and LSD aren't even socially acceptable among rock stars anymore! Bah!
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.
Really, who's to blame here? Is the lack of income by the individual the result of the large share the recording label takes?
No one said the music business was easy either, and we all know the success stories are certainly the far and away cases.
I wonder when they'll get it all fine tuned to the point where successful bands actually go bankrupt from attempting to make and sell an album :-P
Daniel
Carpe Diem
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?
Is making music really that much harder than, say, being an ER technician? Why should musicians feel automatically entitled to millions of dollars for a year's work? "I played a guitar for a few hours in the studio, travelled around being treated like a god for a month, had sex with a few groupies, and I only earned $40,000." Cry me a river.
Don't buy CD's from a record store. Don't pirate music - it only increases the popularity of the people you shouldn't be buying CD's from.
Go see live music. If you live in a city larger than 50,000 people, there should be a few bars that get live music. Go see them. If you like them, buy their music. No record company required. No inernet piracy required. Just good music.
If they wanna post stuff for free on the internet, more power to 'em. I'll download that. But I don't expect them to.
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??
Get the hell out of the way.
And don't forget the artists. Attend local shows, support Independent acts. Buy merchandise, hell, mail a check, but find other ways to support your favorite musicians without giving a tithe to the RIAA. It can happen.
You can read her manifesto about this at http://www.holemusic.com/speech/
It's more in depth than this article and comes from someone who has been there, a good read..
=-=-=-=-=-=-=-=-=
Oh bother.
I guess I'm puzzled by the attitude displayed here on /.
On the one hand I'm told as a software developer it's not about the money. I should code just for the love of it!
On the other hand I'm supposed to be outraged because a rock star only makes $40k off a record deal?
And the rock star get's groupies, whereas the programmer just has pr0n.
In this case, each band member got 0.476% of the total gross of the sales of the album they worked on.
At my job, I get approximately 0.307% of the total gross of the sales of the software I work on.
I spent 21 years in school working to get my job (which wasn't cheap), and I've been working in my industry for 8 years.
I also work well over 40 hours a week, and I'm never, ever going to get a product endorsement deal. (They probably won't either, but if they do, it's extremely lucrative.)
I'm not saying they're not getting screwed, but I do want to try to keep things in perspective.
Education is the silver bullet.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
In a 2000 speech to the Digital Hollywood online entertainment conference. It shows how a million dollar advance and a million copies sold can equal zero dollars.
People who disagree with you are not automatically evil, greedy, or stupid.
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.
Rockstars are just underground punk-rockers that became popular. It seems to me that there are people who prefer bands that are underground (read: "not popular"). The moment those bands become popular (even though if their music didn't change and/or become more mainstream), the fans reject them because they have "sold out to the mainstream" or some other crap like that. I guess it's more l337 to like some unknown bands even if their music is no different from the more mainstream bands
Lesbian Nazi Hookers Abducted by UFOs and Forced Into Weight Loss Programs - -all next week on Town Talk.
I think all the bands should get together once their contracts end to formulate a joint force against the greed of the music companies.
The artists deserve a bigger cut. The music companies spend a great deal to promote a band and get their music played on the radio but ultimately they end up taking most of the profits and force the band into debt! They thrive on chewing up bands and spitting them out afterwards! There's a lot of talent out there but all they look for are the handful of one hit wonders they can exploit.
If the artists could bypass the music companies and create their own music company to promote the collective bands they would be much better off. Such a collective would have to be non-profit and funded by the musicians.
The collective would need to release music digitally for a reasonable fee. They could partner with large Internet players that can handle the bandwidth. CD's can indeed be produced rather cheaply. The need for studios to record the CD's is not as necessary as it once was. I've heard CD's produced in sound altered homes and accoustically sound structures that is as good as the professional studios. There is no need to pay thousands a day to record an album!
Unfortunately, most bands are currently under contract with the music companies and breaking their contract would open them up to legal attack.
The artists should not be put into debt when the music company makes 8 million in profits, spends 2 in promotion and keeps the remaining 6 million for themselves. Allowing only a piddly sum to the artists. No wonder the artists have to tour to make any money!
I was in bands. For many years. Some of my good friends were in bands with deals for many years.
95% of the time, you LOSE money on the road. Remember, you don't get to keep all that money. You have to pay for food, gas, roadies, hotels, the inevitable replacement gear (when yours breaks, is stolen, or left in Missouri by the drunk-ass drummer).
And that's assuming the venue owner decides to pay you at ALL, and not pull the ol' "how about we give you food and beer?" switcheroo.
Often you don't get to sell CDs at your shows (often due to contractual issues). In many cases, the merchandising company makes ALL the money on your T-shirts, buttons, etc. (the band gets about 5% of "profit").
If you're some huge band like Creed, yeah, you can make major cash. But even 1 or 2 levels down, you lose money. You have to have insurance, you have to pay the venue, you have to hire security guards...the list goes on and on.
SUCCESSFUL bands make money on the road. But most bands lose it. And lots of it. In the "old days" (pre-internet), everyone understood that you LOST money on the road, but it served to promote ALBUM sales.
Don't know where this myth got started about it being the other way around.
I think these figures are pretty conservative as to the amount of money that bands can make from online sales. I would much rather do business in this way than to do it the RIAA's way. And yes, this does nothing to touch the piracy issue, but we all know that whole Linux distros are freely available for download on the Internet; and this hasn't ruined Linux, has it?
Always look on the briight side of life! (whistle, whistle)
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.
And I bet you wanted to be a rock star when you were a kid.
Rock Star? I always dreamed of working for the RIAA. I started young, charging my first royalty at the age of six. One day I hope to have a global surcharge named after me. That would be the ultimate bragging right.
I had an idea a while back for a sort of 'aggregated patronage' for new
music: create a nonprofit org that runs a 'community' website. Interested
'patrons' would pay a small fee (say $5/month) to be a member. Bands upload
their MP3's for free, and members get to download, comment on, and rate the
songs. At the end of every month, the band that had the highest rated song
would be given the month's kitty: i.e. all the membership fees for that
month, minus a small amount for hosting costs, so the whole thing is
self-sufficient. With only a little over 1000 members at $5 a head, such a
site would be giving out a $5000 cash prize to a band every month, and I can
tell you as someone who's been there that this is usually more than even a
really decent local band would otherwise make every month. Of course this
also helps those artists like the techno types who don't get concert sales
because they don't really play out 'live'.
Of course, bands/musicians would love such a thing, why not upload your
stuff and get it in the running - you'll get exposure and feedback in any
case and you may just make some nice cash. The question is whether or not
you could get enough 'patrons' interested. There are some incentives tho -
like only members can download the music that's been put up there. Also,
while the critiques and ratings could be open to the nonpaying public, you
would of course have to be a member to actually write reviews and rate the
music. This might appeal immensely to all those armchair music critics out
there. Another source of members would of course be those bands who have
entered telling all their friends to sign up so they can vote them up. While
there's some potential for abuse there, it would be nice if every band had
around the same number of supporters signing up, meaning the kitty gets
bigger but the ultimate winner for the month is actually decided by a large
number (hopefully) of 'undecided' members, i.e. those who have signed up to
listen to and patronize new music rather than to support a particular band.
Another incentive could be to mandate that the winner release the winning
song under some sort of 'open-source' music license in exchange for the
cash. This would be an incentive insofar as the Slashdot types (myself
included) would like the idea of supporting the increase in the overall
supply of 'free' music, while also helping out those bands that are
open-minded enough to consider releasing their tunes that way.
Of course, if there is interest on the 'patron' side, and enough people sign
up, the kitty could eventually get large enough to be split into seperate
'genre' prizes, which makes more sense: Your underground hiphop head may
want to listen to, rate and award the latest dope offerings without having
much interest in doing the same for the latest country-rock ditties. Ditto
for death-metal heads vs. bubblegum pop, etc. Having a general 'all takers'
kitty only makes sense in the beginning when there's fewer patrons and thus
less patronage to go around. Of course, since the site software would be OSS
(GPL'd, ideally), there would be no reason that those who aren't happy with
the way the group votes couldn't start their own site, targeted to people
who are closer to their own musical tastes.
Actually, I wanted to be Liberace. I never made it.
Best Buy can have you arrested
Being I spend my first lifetime in the music business this isn't telling the whole story. They are not factoring in money from playing live. Also you know getting into the music business that you don't make a much of money in the early years of band. It take years for a band of gigging and recording to become the "hot new band".
Also there aren't "bands" these days mainly due to economics, everything is "projects" these days. A player will be juggling schedules rehearsing and playing multiple projects and doing side gigs to pay bills, hoping one of these projects gets signed, records, and tours. It's sad that players today don't know what it was like to be a band. To grow together musically, the family of band members and supporters. I still have a lot of friends in the business and it is way to commericial these days.
Some one forgot along the way that it's really about the music. Musicians don't make music so that they can become famous.. they make music because they love to make music. Sure we strive to "make it" but even though most don't make it.. it's still rewarding. True music is an art.. prefab music is a business. I have been writing songs since I learned guitar when I was 12. 8 years later I have a band... I could care less if we "make it". I just love to get together with my band and play music and give that music out to people who want to hear it. Remember, there are a lot of rock stars and wanna be rock stars out there.. but a lot of them aren't musicians.
"The moment those bands become popular (even though if their music didn't change and/or become more mainstream), the fans reject them because they have "sold out to the mainstream" or some other crap like that."
Totally untrue. Most of the time these bands produce one record that fits their old style then fall to the hype from the record companies. The record companies will say, "hey, change this and you'll sell a couple hundred thousand more albums", or "Let's sound more like band X so that we can reach a wider audience."
When a band changes just to sell more records, forgetting the fans that got them to the point they are at is, when the band sells out. Sometimes the bands just change as the members get older. But any fan can tell the difference when a band starts "selling out".
Environmentalists are their own worst enemy. ~tricklenews.com
It cost money to tour. No one NEW gets $200 a ticket. How many Paul McCartney's do YOU know??? Horrible argument.
A well managed and promoted tour can make a band a lot more money than records these days. I think our focus on recordings rather than showmanship and musicianship in our culture is what causes talentless hacks with lotsa money and technology to make it big. More and more musicians I know are glad to embrace their lives as part of the "minstrel class" and give up on selling obscene quantities of records.
Works for me.
_nfotxn
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.
If you do not like the way a business conducts itself, then don't patronize the business.
That means if the entertainment industry cheeses you off, then you quit buying CDs, DVDs and stop listening to music radio. You then tell your friends why they should be doing the same thing.
Consumers in this country hold the purse strings. Stop complaining and vote with your dollars.
This also works for those of you upset over the outsourcing of employment to other countries. TELL those companies why you refuse to do business with them each and every time they approach you for your hard earned dollar.
Remember, you hold the purse strings. Of course, it's easier to moan about it on Slashdot and exchange goatse trolls rather than taking a stand on an issue in which you believe. I mean, you *can't* possibly live without your tunes, right?
Bands do not make big money touring.
Bands do not make big money touring.
Sure, they make a living sometimes, but most of the time they don't.
Band's tour for two reasons: They love to play music, and they want to promote the sales of their albums.
Tickets cost $200 sometimes because people are willing to pay it. If you can sellout a show at $20/ticket, then why not charge $30 (etc. etc.) and it grows from their. The money just gets spent making the show bigger, brighter, and louder.
The costs for putting on a concert are staggering. Just the local labor alone can be as much as $10,000 (or more) for an event. It costs $2/mile/truck to send the show down the road. Each truck. Each bus.
Why do you think some bands accept corporate sponsorship for their tours? Many (well-known) bands would lose money trying to tour if they didn't have the sponsorship money.
Merchandising? By the time the venue gets their 20%; the sales company gets their cut; the designers, manufacturers, etc. get their cut, there isn't much left for the band.
NetInfo connection failed for server 127.0.0.1/local
I think that any band that signs up for a recording contract is committing suicide. How come so many bands won't think outside of the limited, furmula-based, corrupt BOX of expensive studio time, expensive post production, expensive MTV videos, expensive kickbacks to radio stations, expensive lame coreography, on-stage fireworks, etc. etc?
Compared to publishing your own books, quality recording, mastering and pressing 1,000 CDs or so to start is extremely cheap. Literally chicken feed. We've been enabled by computer tech which should have put the big studios out of business by now. Distribution is widely available compared to what the struggling self-publishing author faces in the book industry.
Maybe it is simply a question of aesthetics, but I'd rather listen to a straight-on live/studio without stupid 'major label' sound effects and extreme overdub overlayed. A good band can make good money selling their CDs at concerts, websites and through the many distributors. Musicians must think outside the box and drop the MTV videos and fake-sounding, expensive post production.
Out of the box means a band sells a high-quality recording of them performing their music. No record company is needed for something so simple. Courtney Love finally got free from her record contract, didn't she?
"Only in their dreams can men truly be free 'twas always thus, and always thus will be."
--Tom Schulman
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
They actually got paid $1.2 million. If they could find a cheaper way to operate (get rid of the manager, produce the record themselves, not spend $200K on studio time, pay their lawyer a flat fee instead of a percentage, etc.) they could keep the $1.2 million. Their lawyer should also have negotiated that the royalty was on the retail gross, rather than any sort of net. The royalty should reflect the popularity of the music directly, and not any machinations of the production process.
And if I wasn't hungry, I'd show you how the newspaper managed to double-count for some of the money, and lose some elsewhere, but it'd take a spreadsheet.
Bottom line, rock stars are dumb for thinking they're only making $40K on a gold record.
What do you recommend for those people who aren't 21 yet?
A fake id.
And how much do those live bands have to pay their songwriters?
A lot of them write their own music.
The hottest cats in New York can't get gigs anymore. It doesn't help that Broadway producers are trying to reduce the number of music jobs by replacing live musicians with "virtual bands." Visit Save Live Broadway.
It doesn't matter if you play in night clubs or Carnegie hall -- this is a tough time for musicians.
I'm trying to think of another industry where the employees are given loans or are required to make initial investments and usually end up screwed. Hmmm... where else does this happen... In what other industry are the guys on the bottom so braindead they participate even though it's common knowlege they'll get the shaft?
Amway? Herbal Life? Yeah.
This nation is capitalist and if you are too stupid to ensure you are properly compensated for your efforts, you are giving work away for free. In this case the fools are giving it to record labels, and that's fine with me. When I buy something it's because I'm paying what it's worth too me. If the wrong people profit, too fricken bad... I still get what I want.
And you can't say "well people buy crappy music, thereby supporting an artificial economy perpetuated by marketing!!!" IF PEOPLE BUY SOMETHING THERE IS A MARKET FOR IT GOD DAMN IT! And if under the current system no music is produced that anyone wants, the system wont continue existing, now will it? Theres a reason labels continue to profit and it has nothing to do with them being bastards. Nearly everyone acts selfishly. The industry produces a product people apparently want and the competition to be an employee is so intense they aren't obligated to pay fairly.
Labels are trying some legislative things to prop themselves up (and they have the right to do so), but democracy has a solution for that: dont vote for the industry's lackies. And if they still win then the people seem to want the industry supported by laws. If you dont like it, too bad.
What's wrong with the music companies taking the cost of touring, recording, distribution and advertising from the revenue earned by an act? How else are they supposed to pay for it? It's a business, not a donation to the arts
The problem is that the companies take their profits first before costs are taken out. If the system were truly fair, record companies would take their profits with the artist at the end of the day when all costs have been calculated. Yes, it is a business and the record companies deserve the right to make a profit on investment, but would you want your investment company taking their profits before costs were calculated? The folks that manage my portfolio take 1.5% of the portfolio value at the end of each quarter, not at the beginning of the quarter, therefore their income is dependant upon the performance and my costs to them are based upon mutual growth. Not bleeding the portfolio dry.
Visit Jonesblog and say hello.
Artists never make money from the album. Nothing has changed. It's their merch, their ads, and their concerts
I know one barely platinum band that got paid $80,000 to play one concert. After payouts and taxes they each left with about $6,000 for ONE NIGHT.
also, when a band sells a lot of albums (500k, 1m etc), they get more money from the label and publishing (where most of the money is)
On the other side of the coin.. how many artists actually do a lot of commercials?? I am sure there is a rather large majority who do not get the lucrative sponorship deals.
Because a few companys control distribution and collude with each other to keep these deals so unfairly slanted towards them. The also conspire with each other to fix prices artifically high. If the consumer, who has a complete choice of buy the music or not, can't deal with the RIAA cartel, why would you expect a band that has to choose between take their deal, starve, or get out of the industry, can?
I'm an American. I love this country and the freedoms that we used to have.
Go see live music. If you live in a city larger than 50,000 people, there should be a few bars that get live music. Go see them. If you like them, buy their music. No record company required. No inernet piracy required. Just good music.
Thanks to the joys of deregulated radio...
Clear Channel owns the air time.
Clear Channel owns the play lists.
Clear Channel owns the concert venues.
Clear Channel owns the concert promotion.
Clear Channel owns the ticketing companies.
So, unless you want to play in a bus shelter, unadvertised, playing songs that no one has ever heard of, guess who makes all the money?
Why do you think all those radio stations that sound exactly the same as each other have exactly the same bland "Front Row Seats!" competitions, the same bland "Sold Out Seats!" competitions and the same bland DJs who're supposedly on "Hard Rock" stations giving out tickets to go and see Britney Spears with them at the same three venues as every other gig you ever hear about? Clear Channel owns the entire chain from start to finish, nationwide. Even when there is a chink in their defence, the artists all know damn well that if they dodge Clear Channel in one city, they'll be blacklisted from every other one across the nation.
Everyone criticises the RIAA on slashdot. After all, they're the evil monopolies, making all the money at the artists' expense. The problem is, to get their product out, they have to deal with a monopoly. I'm not defending them but they're also not making money hand over fist either - not because of piracy but because Clear Channel squeezes every last penny out of music, shoe-horning it in to an easy to sell, nationwide generic sludge. Bad as the RIAA are, perhaps it's worth going after the real culprits.
In the 21st century, no successful business model will be constructed based on the sale of recorded music for any price -- without the widespread implementation of DRM technologies which will surely be rejected by the body politic. If DRM isn't rejected, well then, it's a whole new ball game...
Statistically speaking, there's a 99.998% chance that my IQ is higher than yours. Get over it.
This is NEW? Chicago producer Steve Albini and Front person for Hole, Courtney Love both did this analysis years ago! To quote Steve: "What each band member made is about what they would have made working at Dunkin Donuts".
Sales from an album: $3 Million
Amount given to entire band: $100,000
Amount given to band member: $40,000
Ability to have sex with tons of hot chicks whenever you want: Priceless!
So what is the problem?
Writing royalties: the 15% deal doesn't include writing royalties. If you are a musician then you probably know that the big money comes from royalties (radio play, selling rights for advertising, etc.). That is why copyrights are important to artists. In this hypothetical deal I doubt the band would sign away their ownership; if they did then they are probably idiots. There are plenty of previous examples to learn this lesson from (Bruce Springsteen, the Beatles). In a few cases it is worthwhile - to get a song recorded by Celine Dion the writer must give up 50% of the royalties, but there is almost a guarantee of sales, so it can be a winning concession. Just ask Dan Hill, writer of "sometimes when we touch"
"The record company keeps the packaging and "free goods" funds. After collecting a $9.99 wholesale price, it also reaps an additional $829,900." The article gives the impression that the record company is keeping all this money, but it is going to pay for manufacturing, distribution, advertising, rent and salaries, all the same costs a computer company has, or a software company, or a fast-food company. If a group of musicians wants to take on all these responsibilites and release their product themselves, they can do it, and many have, successfully. (Barenaked Ladies - who moved on to working with a major record company)
Live Performances: for an up and coming band, performing is simply advertising, so touring is not a typically big a money-maker, but if well managed then it can bring in some money. The bigger the band is then the more likely they are making money performing.
The Benefits of Being Self-Employed: If these hypothetical guys are smart then they have an accountant writing off everything under the sun as an expense and they aren't paying much tax.
I've already read a huge number of replies ranting about the greedy music industry. While I agree that there are plenty of creeps and dick-wads involved, that goes for the musicians too, and as I mentioned we are talking about a business, which exists to make money. Yes, they have made and do make bad business decisions, but all areas of business do. Anyways, calling the companies greedy for charging too much for music is really calling the kettle black. They are not witholding air, water or food. It is just pop music, and insisting that you have some sort of basic human right to those recordings regardless of any investment made by anyone else, that is greedy. You don't need it; you want it.
RTFM; please, I beg you.
pyrotechnics!!!!
*ducks*
I don't know that I have ever seen a 'rock star' driving a really nice car. You know who I see with lots of money? Rap artists. Anyone care to venture a guess why there are rap artists that make a shit load of money?
They have their own labels! Death row, murder inc, I could go on and on. These guys were smarter then whitey from the get-go. They produced their own music, and sold it themselves. New artists get picked up by these labels and make ridiculous amounts of money because these labels know how easy it is to market these albums. All you need to do is have a video filled with hot chicks and some Bling, have music that doesnt suck(Doesn't have to be good, Ja Rule sucks heavy fucking ass and is really rich), and the white MTV watching yuppie kids will go out and buy that album in droves.
There is no shortage of smaller record labels that will sign interesting groups. If not, create your own label! Swollen Members did it with Battle Ax records, and the beastie boys eventually came out with Grand Royal as a record company. Hello Nasty sold a shitload of albums, and wasn't promoted by RIAA tools.
If more people followed this business scheme (Basically invented by Puff Daddy and Russel Simmons) when they went for a recording contract, they'd be rich. (See Bow Wow, but it helps that Snoop Dogg was in his corner.)
I don't feel sorry for Idiot Band A when they sign with Mega Asshole Company B, without taking into account whats going on. That's just stupid business practice.
If you want to take the risks, produce your own album. Borrowing someone else's money without providing them with collateral in case you fail is expensive. Go figure.
If the average rock star only made $40,000 per album, MTV's "Cribs" wouldn't exist. Most bands get their money from booking sold out tours. Think about Phish. Out of like 15 albums, not a single one has gone gold, but they're still filthy rich because they put on a damned good show.
To make any real money, you gotta tour. That's where the actual money gets made for an average band. I remember reading an interview with CC Deville of Poison where he says he only got 20K out of their first major album.
This space for rent.
"as per the article, only 128 of some 30,000 records released in 2002 were so privileged"
How much money did the record companies actually make when they probably lost money on 29,872 albums? Record labels take all the risks on new bands. They deserve the money. Once you have a gold record, you are in a better position to negotiate a better contract for your second album. What's the complaint anyway? The band accepted the contract voluntarily? No one forced them.
Vote for Pedro
Things like "deal memos" are sketchy though...
The band gets seen by a A&R rep, the rep talks to them, has a meeting without lawyers present, since "it's not a contract meeting, just a get to know you meeting", then gets them to sign a deal memo that says they intend to sign a contract with the label. It's legally binding, though the A&R rep implies that it's an informal thing.
At this point the band can't sign with anyone else, so they are almost guaranteed to get a bad contract - they have no leverage anymore.
And, yes, they could probably get out of the deal memo, since it's a sketchy business practice - but the label can keep it in the courts for quite awhile, and they have lawyers on salary, while the band has to be paying a lawyer hourly, and probably doesn't have much money since they aren't signed...
what happened to being in the stupio for a week, or a month?
out of all of that money, what percent of it is totally wasted on the lifestyle of being a pop star?
I don't see what the issue is, they still make a profit in that model - if they aren't making "enough" profit, then that is a sign that one of the variables in the mix is off.
They are assuming that the variable that is off is the sales - the easiest one to point the blame on - but as in all business, perhaps the easier way is to be introspective - look inward and see where to cut costs.
There are a crapload of bands out there that make albums faster and cheaper than that.
There are some odd things afoot now, in the Villa Straylight.
I am one of the original operators/founders for a free music site on the web in 1994. The second largest music archive of the time (next to IUMA). And a technological trend setter with the use of incredible MP2 (yes two) technology. My view of the current state of the music industry is this: Bands/Artists who continue to rely on industry to make money and not MUSIC will always get fucked and deserve to be fucked. They place their value in their relationship with the record companies and the RC's assests and not their fans. It's common business sense to make your CUSTOMER happy (fans), focus on your product(MUSIC, PERFORMING) and your relationship with your customers (FANS). SO WHY would a band give away control of their most important assests for PENNIES? Because they are stupid and they are greedy. Which is funny since in return for their greed they get the opposite of what they lust for. It's not very different than a small software company selling out completely to investors who steer the company first into disaster and then recover large amounts of money at the expense of the original upstart. The alternative is CLEAR. Why bands don't see this i really don't know and no longer care. The alternative is to PLAY fucking music. PLAY ALOT. PLAY in front of crowds. That's how a band gets paid. That's how a band develops a "customer" base. Don't waste ALL of your time and effort copywriting songs that suck.. MAKE MORE SONGS. LOTS OF SONGS. And play them. Make copies of your music. Let people listen to them and use them and make copies of them. This will widen your customer base. This will open more opportunity to PLAY more and make more music. THEN and ONLY then will people MAYBE be willing to pay for your Music. The REAL drive of buying art is the support of the expression in the hopes that the expression will continue to grow. Two examples of bands that have made this incredibly SIMPLE process work are the Grateful Dead and PHISH. Not to mention hundreds of DJ's and electronic acts who are driven by their love of PLAYING and PERFORMING music. If a band or artist does not love music and performing enough to do it everyday they will be pushed out of the market by ones that are. Just like in ANY business. Bands should look at performing and making music as their job. Not something they do as part of their Music career and inbetween being famous and broke. I'm not as big fan of those bands i mentioned. I do like them but it is funny how their lifestyles and business plans resemble eachother. Do you think bands that tour 325 days out of the year make money? Fucking A right they do. And if they love doing it they are fucking lucky individuals. As for the RIAA, why sit around and whine at them? Why should they give away all their assests? Why should they let people steal their money? They won't. And people won't stop stealing it. The whole fight is a stupid waste of time for people who want to make music. Placing SO much emphasis on the RIAA is admitting they hold some supreme power over artists and art in general. And if you think that is the case then you don't understand anything about real music or art.
Secondly, it's a matter of how you like to enjoy music. Yesterday I got to talk to the amazing, self-made Cody ChesnuTT for a little while, then see him play his soul/pop/rock/etc. from a distance of 10 feet. He asked people what they wanted to hear, and really made a connection with the audience. Amazing. But I'd have little interest in seeing him play in a basketball stadium with an array of security/lighting technicians/so forth, all around him. I wouldn't hold it against him, it's just not as interesting.
U2 is a bad example, unless you're from Ireland and saw them in the clubs before they became an international band.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
Seriously, when you make music, typically you want it to be your life, not just a hobby. If you want to make money doing it, and you're good, you should be able to. Which do you value more? The music musicians make? Or the papers lawyers shuffle around endlessly?
One could say Lawyers put more effort into it. However, I don't think anyone can say that making good music is easy. It's just one of those things that are subjective. Music is something that only a few can make a living doing.
No hypocracy here... Go PAY to see them live. They get paid for the work they do that way... Download the music for free, and if they are any good, they'll draw large crowds when they come to town.
They won't get royalty checks for 20 years on the recording session they spent a few months on, but what's so bad about that? I don't get paid for 20 years for the network I spent 6 months perfecting.
The recurring theme around here seems to be 'update the business model'... How about a business model that doesn't include money for recordings anymore?
No hypocracy involved...
The Steve Albini article is of course, spot on. The fact that it is almost 10 years old is remarkable, and it's a shame that things haven't changed much since then. The flagship punkrock fanzine Maximum Rock 'N' Roll devoted an entire issue to this topic back in 1994, in a groundbreaking (at the time) issue entitled, "Major Labels: Some of your friends are already this fucked", and it should be required reading for anyone who wants to resist the corporatization of music.
No, the problem is that the success of the music industry is based on everyone believing it in its success.
Its obvious, but everyone buys the albums everyone else buys, so only ~128 bands get to make *good* money, and only a few of them get to make a *lot* of money. So the profits of the recording companies and their superstars comes at the expense of everyone else in the industry making a *living*.
Of course, it isn't the fault of the recording industry that we're all so damn stupid.
So you want us to reward artists for making bad decisions. That money is how much an artist makes for an album that goes GOLD, piracy or no piracy.
But then, I'm not cashing a fat IT paycheck, either.
How about a business model that doesn't include money for recordings anymore?
Begs the question. I don't really want to see any but a few bands live. I don't want them to reshingle my roof. I don't want them to wash my car. What I want are recordings of their music. There's a lot of money in sales of recordings; surely more of it could find its way to artists.
The music business is is undeniably a horrible uber-competitive backstabbing industry. Why? Because a) playing music is fun b) people will pay some amount of money to hear music. What results is a bunch of people going to increasingly ridiculous lengths in order to make it in the music industry. A lucky few will make generous amounts of money, while the rest will scramble to survive.
Such is the case in any industry where the work is a lot of fun, and I say this as a warning because the same thing can easily happen to computer programmers. Why? Because programming is a fun and rewarding job, and as soon as the general public figures this out you will have a situation where a) a lucky few get to be paid as programmers b) a lot of programming work gets done for free by the many trying to "make it" in the business. "Oh, but programming is hard", you say. So is being a top-flight musician, and there are plenty of those who have to hump day jobs because there just aren't enough paying positions to support them at what they would like(and are highly qualified) to do.
So while you sit there posting to slashdot, saying "oh well, they can make their money through concerts and selling t-shirts", just remember, the same thing could happen to you one day. Hope you're good at self-promotion. Or that enough people never figure out that programming is fun in a similar way that music is fun. I wouldn't bet on the latter. It doesn't take a genius to coorelate the fact that people already produce a ton of code for free to the speculation that they could get programmers to do their bidding at very generous rates.
No, Thursday's out. How about never - is never good for you?
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*
I know what your saying but I think i'm actually one of those people who act like they know more than most people about music. I've been a musician for some time now, and am studing Music Production and Engineering at Berklee College Music.
But hey, who needs to know what a Tritone Substitution or Modal Modulation is?
Tibbon
tibbon.com
500,000 albums sell at $16.98 = $8,490,000 Okay, so that says: Total Earnings = $8,490,000. Now let's work out who gets what out of this.
... reaps ... $829,900
B = Band, R = Retail, S = Studio, Packaging, production costs, A = Advertising, L = Lawyers, T = Total Left to record company, M = Manager
The Grunts' royalty is 15% of retail. Now, if we take this at face value that means.
B(OfRetail) = 15% * 8,490,000 ~= 1.3 Mil. But since we know this is wrong, let us continue.
"packaging deductions" of 25% So, this translates into, or means that
S = $2,122,500, T = $6,367,500
now we also have, That's a "free goods" charge of 15% So that gives us (since this is advertising)
S = $2,122,500, A = $1,273,500, T = $5,094,000
Okay, now we are getting somewhere. Now the band gets from this. So, the band's royalty is actually: $764,100
B = T*.15 = $764,100 - Yep!, S = $2,122,500, A = $1,273,500, T = $5,094,000 - B = $4,329,900
Now, The $3,500,000 balance goes to retailers So, we have
R = $3,500,000, B = $764,100, S = $2,122,500
A = $1,273,500, T = $829,900
The record company
R = $3,500,000, B = $764,100, S = $2,122,500, A = $1,273,500, T = $829,900
Okay, our numbers all make sense thus far... now things get weird. Because the band was hot, they got an advance from the record company of $300,000. They spent $200,000 of that recording the album, which included a $50,000 advance to the producer. They pocketed the remaining $100,000.
So this means that the band got $200,000 of their royalties early, and spent $200,000 on recording costs, and the band kept the $100,000. So we have
R = $3,500,000, B = $764,100 - $200,000 = $564,100, S = $2,122,500 + $200,000 = $2,322,500, A = $1,273,500, T = $829,900
Now as well, we have more advertising (the video). So here we go. the label spent $100,000 making the band's first video Which was expected to be paid back
R = $3,500,000, B = $564,100 - $100,000 = $464,100, S = $2,322,500, A = $1,273,500 + $100,000 = $1,373,500, T = $829,900
Whoa, now our numbers aren't lining up as well. Where the problem? The article says: So the royalty drops to $364,100.
For some reason the writer of the article decided that the $100,000 that the artists kept wasn't really paid out to them. Even though they "pocketed the money" or kept it, or however you want to put it. They made $100,000. That's the deficiency. They do fix this later on. Now, let's finish.
But the band's producer also earned a 4% royalty of $203,760, of which he already received $50,000. So the band has to pay him an additional $153,760, reducing their royalty to $210,340. Let's put this as production costs. Since the producer must be paid as well.
R = $3,500,000, B = $464,100 - $153,760 = $310,340, S = $2,322,500 + 153,760 = $2,476,260, A = $1,373,500, T = $829,900
Good.. Good... After pocketing $310,340 (which includes the remaining $100,000 of the advance) All Fixed
the band has to pay their manager 15%, or $46,551, and give 2% of the total deal, or $101,880, to the power lawyer who got them the deal in the first place. That takes the band down to $161,909. Let's see now:
R = $3,500,000, B = $310,340 - $101,880 - $46,551 = $161,909, S = $2,476,260, A = $1,373,500, T = $829,900, L = $101,880, M = $46,551
Total = $8,490,000 - All is accounted for.
Okay, so now that we have all of the numbers worked out.. Whose coming out on top here.
Well, the Retail guys definitely make a pretty penny. ($3,500,000), but that has to be divided over all their stores, so it doesn't work as well.
Studio costs are really high. (Higher than they probably should be.) That would be something of note.. But most importantly... the record company gets T = $829,900
That's it... Sure they get "whatever's left over from packaging and advertising" but that's not going to be that much. So the record company is making very little off this deal.
Really, if this shows anything, it is that the current system is too cost intensive, and that if it were optimized, there may be a better way to save money, and make sure everyone gets paid. It's not a conspiracy people. It's just common sense. These fees have to paid somehow, sure they may be high, but they are still necessary costs.
Personally, I don't see a problem with the record companies persay. I see a problem with how the money is spent recklessly. If you like a song, buy the CD, sure the artist doesn't get much, but it will make sure that more music like it is made in the future. All of those other costs have to be covered as well. If the only people who pay for CDs are people who listen to Britney Spears or Enrique Iglesias (Not saying they aren't good singers), then the only CDs that will be made are those by B.S. and E.I. The artists people are willing to pay for, and make sure that the investments that these companies put into them are returned.
It's simple math, that's all it is, and that's all it will be. It's not a revolution, or a conspiracy.
~ kjrose
I think you're totally off. It's about the music, sure. But at the same time, it's a music industry or a music business, neither are music philanthropy.
I'm a student at Berklee College of Music, and a very serious musician. You do music because you enjoy it, but at the same time- by the time i'm outta here, I'll have over 60 Grand in college loans and i'll be damned if I just 'love music' and not try to pay that off, get a house, get a car, etc.
I really enjoy music, and so does everyone at Berklee. Who doesn't wanna be a rock star though? No, it's not all about money. But you can't live in a cardboard box and play in the subway forever, well some people do, but not me.
And have you considered that if you are a real musician out there doing it you better be making some money to pay the bills, even if you don't get any of the money for yourself.
Studio time is over $100/hour at anywhere decent. Guitars are $2000+ for ones of good quality. A drumset is gonna run at least 2000 also. Think about microphones, preamps, speakers, etc. Ok, that's just the items. But at the same time there's people that need payed. Your manager, booking agent, business manager, accountant, cover artist, web designer, producer, engineer, roadies, lighting designers, etc... They all need to live too, and if you are just playing at people's houseparties, you can't make the money to pay them, let alone you. And don't tell me that professional musicians do it all by themselves. Just open up any cd and look at all the credits. They need to get paid. Go to a concert, it makes money, but it costs money to start up. You need a lighting and sound system, tour busses, etc.
Yes, I love the music. But as a real professional, it's insulting to not try to get paid for your talent. Most programmers program because they enjoy it, but at the same time, program what the boss says, not whatever they are doodling away on randomly.
Tibbon
tibbon.com
Well, translating things to $AUD... here's my workings per 100CDs being completely independant:
100 good quality CDs with cases - $100
Ink Jet Ink + good Paper for cover - 100$
$4.20/disk postage Aust Wide for disks not sold at gigs.
Assume:
75% of disks posted (not sold in person)
Own web site for promotion
Owns PC/MAC w/ Burner + Printer
Owns instruments
Time Burning disks, printing & cutting covers etc is free*.
Time writing & recording music is free*.
The first 25 disks in each box that are sold at the door at gigs are going to cost me $2.00ea = $50.00.
The second 75 disks per box will have an extra $4.20 added - which is the cost of posting a CD anywhere in Australia via Aust Post. They will cost me $465.00 to produce.
Total cost $515, avg $5.15 per disk.
Charge $10 per disk at gig or over web, claim free postage for web customers.
For each box of 100 you sell, you get $1000 cash, $485 of this is profit.
So sure, I will need to sell 300 & 1/3 boxes of CDs to get the $161,909 that those guys got.
Here's the big difference to me: I have a nine to five in a good profession, writing and performing is a weekend interest. I never intend for it to make a single red cent, if it does well good. I always assume that any costs I incur in my music making is money on a hobby.
This has a distinct advantage or two, 100% artistic control, 0% risk as I am not relying on the cash for rent etc. I can take my sweet time and it never has to mean anything to anyone but me.
-Idiot
* - By free I mean that I am a hobiest. This is the time I was going to dedicate to the project anyway.
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
This article admirably illustrates the difficulty of making money from record sales, but it fails to mention that making money from record sales is not the point of making records. At least not for musicians. For musicians the point of making records is to get Exposure. Working musicians make their money by performing, and exposure translates into gigs. With an album on the charts, the Grungenuts, or whatever the hypothetical band was called, should expect to rake in some respectable bucks playing large venues. That's what making records really buys musicians.
Really fun stuff, thanks for the link.
Even funnier, with some find-and-replace the piece looks strikingly similar to a software project diary. Same efficiency and same outcome. I guess.
It can also be that when something is played on the radio, it's saturated, and what you may like the first or second time, after hearing it on high rotation (and not just on your personal radio, but everywhere you go)for a few weeks, you're heartily sick of it.
Same for movie or TV previews and promos -- after seeing the same scenes a dozen times a day the idea of actually watching the whole thing is abhorrent. Though year later if you catch the rerun without fanfare, you may enjoy it.
Well, I guess you're going to have elitist in any field. But by definition, that would have to be a small number... and of the hordes of albums released in a given year, how many make it on the radio? Yeah, elitist.
Was schlepping around with my parents, listening to the radio, and much to my surprise, Slayer is played. I point out that same song would have NEVER been played when it was released (nevermind the fact my parents would be listening to Slayer, even if just sub-conciously). Is Slayer less cool now than then (or maybe cooler)? Hardly. It goes both ways.
Longing for the day when they play Therion on the radio so I can be cool and mainstream. Or maybe I just fail to care. But it would make it easier if a band with over a ten year history got played once, instead of it being my own newest discovery ("Oh wow. Like they've been around for how long, and I've never heard of them."). Maybe if I listen to Britany Spears for another ten years.
The radio still sucks.
I've heard so many real-life stories like this, where record company execs get rich off of someone else's talents, and the artists themselves get very little. Most signed artists that I know end up owing money to the record companies (unbelievable but true)
I'm not a signed musician, yet last year, I made about $12,000 from my music. Whilst this was by no means a good salary, it is certainly more than any non-gigging musician that I know. The vast majority of that money was from selling homemade CD's directly to the public.
You don't need the RIAA in this day and age. With the power of the internet/mp3's & (god forbid) paypal, who needs a coccaine addicted suit to take the food from your mouth?
-- 7 string electric violin + live loop samplers
One big reason that musicians get screwed on record deals is because there is no shortage of good bands out there. Pretty much everyone knows a killer guitar player or song writer and probably have more then one on their block. The distribution channel and mediums for discovery are so limited that only a select few are allowed to take advantage of them. Thanks to the monopoly of the airwaves much of the talent in the world goes unnoticed. Don't let your taste in music be dictated by corporate greed.
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.
Someone needs to moderate this up as Informative. It's so very true -- bands aren't supposed to expect to make money from selling their recorded music. The money is supposed to be in touring ticket sales, and maybe royalties for soundtracks, etc.
Dossy's Blog
Looks like an interesting reversal, if it can happen. After all, the music industry is intimately linked with mass media. This article wasn't signed and we don't know how much media-cred it can get but it's interesting nonetheless.
For a while, the Press has favored a "RIAA vs. Net" view of the situation. Actually doing the math is a step in another direction, raising a lot of old issues and a few new ones.
We all know the current model has a problem. Even RIAA members know this. There has to be a new model that will satisfy everyone in the food chain.
Alexandre http://enkerli.wordpress.com/
All this tuff is really nice and interesting. but i think to vaguely remember that artists do gain some pretty penny from airing their tunes too. I think this is also a good way to earn money for them. but excuse me if i digress. Recently my wife bought a CD reader by SONY. A Discman. It sported a nice, big, flashy write on it : "Also MP3 reader". Nice. Recently she bought the last Massive Attack album, nice music. Guess what? You put the disc on the reader and...silence! The reader made by SONY, is not able to read a CD protected with the same protection system invented by SONY. Funny stuff eh? My legit CD reader, is not able to read a legit store bought CD. Can u see a pattern here? For me this alone spells DOOM for the RIIA and all of his friends. THATS the real issue with the music today. If they do not solve this s**t with copy protection systems, some really bad 455 mojo is going to happen to them. If they do not get their acts together, soon there will be no more "record industry". My 2, off topic cents. P.S: Bye the way, the link to Albino's writing is really good. P.P.S: I phoned to a SONY representtative in my area talking to him about the reader/CD issue. He said he was aware of the story and that now SONY is looking into this. Many CD's do have this problem. He said that i was authorized to bring back the CD and eventually give his name if the store refused to take it back. He also suggested to me to (!) rip the CD, recording it in real-time with a recording software and encoding it in MP3. I found this really showing where this market is going. Down the toilet. KazaaLite for ever! Peace out.
Think about it, humans have been music makers forever. Only in the last 50-100 years has the technology for reproducing recorded music existed. Only in that tiny window has a musician been able to make a living from selling those recordings. Who's to say that this isn't a blip, an oddity, one whose time is rapidly passing. And that musicians will go back to making a living the way they always have, through live performance (not that ClearChannel makes that any easier these days).