As Labels Struggle, Is Artist Income On The Rise?
(UPDATED)Yesterday, I published a chart from the the Times UK showing that while record labels are suffering, artists were making more money than ever from live performance. (see chart) Some Hypebot rea
ders, as well as, Glenn Peoples from Billboard countered that the chart's "interpretation ignores the realities of superstar-driven ticket prices…Live music is a winner-take-all market. The value is concentrated at the top. Once an artist becomes a huge success on the road, he/she can command ticket prices well above the rates charged by sub-superstar artists. In the middle of the pack, ticket prices do not have the same flexibility."
Same as it ever was?
They are right of course, but only to a point. Are live earnings really any different than the rest of the industry? Isn't the same earnings concentration at the top also true in the recording industry – a few artists get rich while most don't see a dime.
The new music industry is not reflected in either the Times chart or any chart published in Glenn's Billboard. Most of it happens beyond the reach of Nielson and Ticketmaster.
I see mid-level artist income growing – perhaps not dramatically, but significantly. The growth is coming from increased direct to fan sales with fewer middlemen taking a piece of the pie. In many cases, the pie may be smaller than it was, but the artist is retaining more.
For a growing group of mid-level artists, increased income also extends to their live performances. The additional income comes not from higher ticket prices, but rather from their ability to perform over a wider region or even globally without the help of expensive and unreliable label promotion machines or radio airplay.
It's a brave new world out there and and it may have been misleading to publish that chart yesterday. No one has created a chart to measure the growth I'm seeing. But that doesn't mean its not there.
- As Music Industry Struggles, Artist Income Grows
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In my experience there are fewer people going out to shows, there are more bands than ever trying to play shows, and people don’t buy merch like they used to. If artist income is on the rise (in general), I’m not seeing it.
And Bruce, I don’t buy your idea that all labels, managers, and agents are worthless, dying “middlemen” and that artists can do it all themselves. I started my label because I was friends with a few bands who were making amazing music but they didn’t really know how to do anything other than that. The flip side is that I’m not much of a musician myself but I’m not so bad at the other stuff, and it’s worked out really well. The artist friends I work with are as dedicated to me as I am to them and they love me as much as I love them. Of course I take my cut of the pie, but without either of us, there would be no pie. It’s almost like a marriage – would you refer to a spouse as a worthless middleman?
There is a lot that indie artists can do to get things going but I think managers, labels, and agents are as vital as ever. There are plenty of folks playing these roles who are thriving and working very hard for their artists. It’s unfair to characterize them negatively just because some of the slimy majors are suffering and making headlines.
Jason, et al, I’m sorry if I leave the impression that all labels, managers, and agents are worthless, dying middlemen and that artists can do it all themselves”. Perhaps the headline should have read As Labels “Struggle”…
While artists at the beginning of their careers can do it all themselves as things escalate I believe (and have written many times) they need a team and that can include a label.
My apologies to all the great indie labels out there for lumping you all into the same category as the big boys. And for some kind of acts, even they are a solution.
My point is (or should have been) that it’s great that artists are no longer dependent on a single path.
PS: I just changed the title of the post from “As Label Fail…” to As Labels Struggle…” to reflect the great point that Jason made (above).
Well, you also state: “The growth is coming from increased direct to fan sales with fewer middlemen taking a piece of the pie” and “without the help of expensive and unreliable label promotion machines or radio airplay.”
Not to have an ongoing debate, I’ll stand by that statement particularly as it relates to the cost vs. benefit to artist as has been delivered by too many labels. It may be starting to change, but…
Decline in CD sales is hurting DIY artists, too. If you were always selling directly to fans, then if fans aren’t buying as many CDs, you are selling less to them.
If you were on a major label, and now you are not and instead are selling directly to fans, then you may be seeing your sales income rise. But if you have always been unsigned, then your income goes down when CD sales go down. It’s hard to make up the difference in live shows and other kinds of merchandise.
Also, I should add that those figures I got from Billboard about concert revenue indicate that the concert market has grown more concentrated in the top acts over time.
So the trend in live music is away from smaller and middle acts. Even if the live music market is expanding, they are getting a smaller percentage of it. So I don’t see how we can assume it’s getting better for them.
As much as everyone would like to believe that radio has less of an impact on sales as Lefsetz and others proclaim, I could make the contradictory argument. Radio has as much impact on those that are listening as it ever. There seems to be a direct correlation between the loss of cume and the loss of sales. Those millions that listen to radio and watch television are possibly the most influenced by the media they listen to or watch versus those who use other ways to discover music. To simply dismiss radio and television as marketing tools is more than premature. Susan Boyle sold roughly 1.1 million records this last week between the U.S. and the U.K. and you could say the fire around her started from a television show. Granted that she did become a youtube sensation but you could also argue that without the TV thing happening in the U.K.,I am not typing her name now. It seems very easy to crap all over the old gatekeepers of music and mass media, but they still have sizable impact.
If you have any data to support your claims of growing income in the new music industry, Bruce, don’t hold out on us, please.
In the absence of specific figures, I suggest looking at the more general trends and trying to draw some logical conclusions:
– are people spending more on music these days, or less?
– is the gap between the top tier of artists and the rest increasing or decreasing?
I’ll be the first to admit that there are more options for earning money as an independent or even unsigned artists today than ten years ago, but I’d also argue that there is less money to be made, overall (if only because the fans’ propensity to pay for recordings has decreased).
One statement of yours that I suggest you re-think is:
“The additional income comes not from higher ticket prices, but rather from their ability to perform over a wider region or even globally without the help of expensive and unreliable label promotion machines or radio airplay.”
Seriously, the ability to perform over a wider region comes from a combination of audience size, ticket prices and financial support. The further you go, the higher your expenses and in the absence of record label support these can only be offset by higher attendance and higher ticket prices. I do not believe that the smaller artists are getting sufficient exposure from non-traditional channels to enable them to tour on a possibly global scale, as you would have us believe.
Of course, if you have any evidence that I’m unaware of, I’m all ears.
Formal data, no. But I work with artist every day at the booking agency I head Skyline Music (http://www.skylineonline.com) that tour national and to a lesser degree in other countries that have never been on even a large indie. Examples form my own roster: Scythian, Hot Buttered Rum, The Lee Boys, BLVD, Gaelic Storm.
I think your perspective is naive at best. But to extrapolate your position, aren’t booking agents middlemen too? Why don’t your bands just book themselves if they can do everything else themselves?
I see a major shift happening with artists expanding their view of creative endeavors to generate more sources of potential revenue. I see it this way:
1. Live performance (though I do live in Austin, TX!)
2. Merch
3. Collaborating on other creative projects like: website projects, video/indy film projects, selling samples, loops, tracks, training videos, templates, creative/training related self published books.
4. 3rd party sponsorship (often related to #3)
5. Licensing (websites, TV, corporate, specialty)
6. CD or song downloads.
I see #6 as mostly free to promote more opportunities with 1-5. And an emphasis on doing the right #1 to get 2-5 opportunities.
70% business 30% creative
1. Live performance (though I do live in Austin, TX!)
I have been told that it is hard (not impossible, but hard) for any local musicians to get paid more than tips in Austin, Nashville, LA, and NY because there are so many musicians in those locations.
How are gig opportunities in Austin?
New York is all business so we mostly have showcases not real concerts. People here are willing to pay up to $500 to perform (one song) at these events. We’re over saturated with artists and the promoters are taking advantage of that.
Paradox
http://www.getparadox.com
Suzanne, yep lots of local musicians. Talent level is high in Austin. You can certainly get paid to play in Austin. There are so many venues, bars, more bars, restaurants, clubs, festivals and corporate.
I feel a bigger challenge for artists is to not have a binary focus on live paid gigs. My opinion is that an artist will be more successful if they’re building their personal brand. The barriers are pretty much gone. We have some great example to borrow from. Kiss and Taylor Swift are good artists to study on the business side. Now that I’m thinking about, how about Silver, Wood and Ivory? I don’t know them personally, but I know they’re making money in various ways! http://www.silverwoodandivory.com/
My 2 cents for the day,
🙂 Art
http://blog.bitvibe.com/
This info I found on the Houston Chronicle and they were quoting a columnist from the NY Times which stated “of 13 million songs made available online last year, 10 million didn’t find a single buyer.”
Artists I know working out of NYC sure aren’t jumping up and down about how financially better off they are this year. Statistics can always be manipulated. i.e. If an artist made $15,000.00 last year but $15,500.00 last year – yeah, their income increased but it doesn’t alter the fact that you can’t make a living on this alone.
My band has been active for 23 years, playing live for the last 13. Even with 10 albums out (on our own indie label) I find we get paid LESS to play a show than we did 10 years ago. A variety of excuses come from the promoters, some of which you have hit upon above. Now, as far as INCOME RISING…….. CD “Sales” are about 15% of what they were a decade ago, but I see that across the board with all the indie artists I know (so I don’t take it personally). YES, I can see how a major label band going indie, and manufacturing their CDs and selling directly to their fans can see their income “rise.” but that is (a) because they can sell 15% as many CDs as they used to, and bring home marginally more money than they got with their crappy major label royalty. (b) they get 100% of the digital income, as opposed to whatever rip-off royalty rate the major gave them. and (c) they had years of major label money pumped into their promotion and their brand. Everyone talks as if – without any promotion – nevbies Poop Dumpster can play 6 shows in London, and suddenly be selling 10,000 units a year. It’s a magical fantasy; but it’s not the reality of the record industry.
You have drawn some interesting conclusions and many of the comments are focusing on the macro economics. For music to thrive you need somewhere to play it live. The growth in the live event economy will lead to more venues and more support and club night slots for unknown bands to gather a following. What happens after that is up to the recorded music consumers.