The State of The Music Industry & the Delegitimization of Artists

- a Six Part Series 

by Jeff Price


Part I: Music Purchases and Net Revenue For Artists Are Up, Gross Revenue for Labels is Down

Upcoming chapters:
Part II: The Impact of DMCA Streams and why they should be considered
Part III: How a skewed perspective delegitimizes artists
Part IV: The Growth Phase is Over? Improved Label Margins.
Part V: When Good Laws Turn Bad
Part VI: The Hills are alive…..


Did you hear? The success artists are having doesn't count. The music industry is over. Fewer albums are selling; revenue is down; the music being released is “crap”; everyone just steals music; the subscription services didn't take off; the RIAA is suing music fans; there are huge layoffs at the major labels; artists sell no music and make no money….it's a broken record.

The problem is, most of this is simply not true. Even worse, this perspective delegitimizes and hurts artists and the music industry. There is a lot “right” going on.



Based on what we have been hearing, most have no idea that music purchases are up over 50% from 2006 to 2009.

Take a look at the Nielsen numbers below:

(For brevity sake I will just provide their own headline and a few bullet points with a link back to the actual Nielsen reports for more details.)


Nielsen Music 2006 Year-End Music Industry Report
2006 U.S. Music Purchases Exceed 1 Billion Sales

  • Growth In Overall Music Sales Exceeds 19% over 2005
  • Digital Track Sales Increase 65% from 2005

The full 2006 report can be found here


Nielsen Music 2007 Year-End Music Industry Report
2007 U.S. Music Purchases Exceed 1.4 Billion

  • Growth In Overall Music Purchases Exceeds 14% over 2006
  • Digital Music Accounts for 23% of Music Purchases

Full 2007 report can be found here


The Nielsen Company 2008 Year-End Music Industry Report
2008 U.S. Music Purchases Exceed 1.5 Billion

  • Growth in Overall Music Purchases Exceeds 10% over 2007
  • Overall Music Sales, Digital Track Sales, Vinyl LP Sales, Set New Sales Plateaus in 2008
  • Digital Music Accounts for 32% of Music Purchases

Full 2008 report can be found here


The Nielsen Company 2009 Year-End Music Industry Report
2009 U.S. Music Purchases up 2.1% over 2008

  • 2009 Overall Music Sales, Digital Track Sales, Vinyl LP Sales, Set New Plateaus
  • 2009 Digital Music Accounts for 40% of Total U.S. Music Purchases
  • More than 10 Billion Music Purchases in the U.S. for the Decade

The full 2009 report can be found here


To summarize: In the four years of 2006 to 2009, music purchases increased from a record starting point of 1 billion purchases to the new record point of 1.5 billion music purchases. These specific figures do not include the sales and other income streams Nielsen does not track or disregards.

Specifically, any “purchases” generated via subscription based streaming services like Rhapsody and Mog are not included. Neither is revenue generated from Digital Millennium Copyright Act compliant streams (non-terrestrial based plays via satellite radio, Pandora, LastFM, Jango, 8Tracks, Slacker etc.). Nor do they include most band selling direct-to-fan sales, bundling of music with merchandise (i.e buy the t-shirt, get a free album, buy Guitar Hero and get the Soundgarden album), on-line drop card redemption, sales of tracks for game play in Rock Band, ad revenue generated via YouTube and other streaming video sites, traditional public performance royalties, gig income, “pay what you want” donations to the band for music, stem sales, synchronization licenses, ringtone sales (these are listed separately by Nielsen), publishing royalties, fan club subscriptions and a lot more.

All of these uses, plays, licenses and purchases generate revenue, just like a paid download. When you include these additional uses/purchases, the numbers go off the chart.

The reality is:

  • More musicians are making money off their music now then at any point in history.
  • The cost of buying music has gotten lower but the amount of money going into the artist's pocket has increased.
  • There are more people listening, sharing, buying, monetizing, stealing and engaging with music than at any other point in history.
  • There are more ways for an artist to get heard, become famous and make a living off their music now than at any point in the history of this planet.
  • Technology has made it possible for any artist to get distribution, to get discovered, to pursue his/her dreams with no company or person out there making the editorial decision that they are not allowed “in”.
  • The majority of music now being created and distributed is happening outside of the “traditional” system.

And to reiterate, sales are up…

Seeing that the Nielsen stats are readily accessible and accepted as legitimate, why then are we left with the impression that music sales and revenue are down? The simple answer is album sales and overall gross revenue from music sales (CD and downloads) are down. The increase in music purchases comes from the people buying individual songs. The decrease in revenue comes from a $0.99 song costing less than a $16.98 physical album as well as fewer purchases of physical CDs.

The impact of this is fascinating.

  • First, music fans are buying more music from a wider spectrum of artists.
  • Second, despite the cost going down to purchase music, the net revenue for a self-distributing artist is up as compared to what an artist traditionally earned via a label.
  • Third, the entire financial model of the labels (well, at least post 1960) was built around selling a full-length physical album. Due to this, it is the record label (and those artists signed to them) that net less money off the sale of the music.

Let me provide context. The financial food chain of the music industry used to be as follows. A distributor sells a CD to a retail store for a wholesale price (let's say $10). The retail store marks the CD up to $16.98 and make $6.98. The distributor takes a “distribution fee” of 20% of the wholesale price (in this case $2) and passes the remaining $8 back to the label.

A band signed to a major label could expect to earn a band royalty rate of $1.40 – $1.70 per full length CD sold. This band royalty was paid through to the artist if they had “recouped” the band royalty fronted to them by the label (i.e. an “advance”) – most do not recoup.

Compare this to self-distribution to iTunes though TuneCore: an artist makes $7 for each album sold at $9.99 and $0.70 for each song sold at $0.99. By selling just two songs on iTunes for $1.98, the artist makes the same amount of money as if a $16.98 full length CD was bought. An artist sells one digital album for $9.99 and makes 500% more than a signed band. The price may have dropped for the music consumer but with self-distribution the artist makes more money.

 

Part II of this series will discuss "The Impact of DMCA Streams and why they should be considered."

 

For a video response from Jeff to the questions below, click here

  • http://www.jasonmilesmusic.com producer57

    This is all smoke and mirrors-After being in the music business for over 30 years I have never seen revenue decrease like this ever. There are no platinum artists (a few -very few) This premise has holes all over it
    Talk to any “professional musician,engineer,producer,and see if they are making more money than ever off of their music
    Peace, jason

  • http://www.coldrockinrecords.co.uk rob

    splendid report.
    check us out for your nu-disco grooves at
    http://www.coldrockinrecords.co.uk
    we are always looking to sign trax

  • Pete

    This also doesn’t take into account that bands – however how small – have to fork out all the money themselves for recordings, graphic art and promotion. A few lucky ones that make it big will be able to recoup their money, the large majority won’t. If things really were that easy, there wouldn’t have been a “record industry” ages ago already.

  • Aly Ray Hoxy

    Let the public decide via buying single songs off Itunes or elsewhere Most record execs wouldn’t know a good song if it hit them in the ass. and a lot of albumns have lousy songs called ‘fillers’ Many great songwriters have been ignored because a Label wouldn’t sign them because of lack of connections etc. It’s good to see Major labels sweating.

  • http://www.idbassmusic.com id

    this is a confused, or confusing, article. Where are the sales figures, the revenue figures?
    You can’t say, in almost consecutive sentences
    “to reiterate, sales are up”
    and then “album sales and gross revenue are down”
    without providing any figures. Otherwise, its meaningless and can be taken any which way. If someone in 2005 would have bought an album for 12 dollars, but in 2010 bought two singles, direct from the artist at 0.99, then sales are up, album sales are down, gross revenue is down, but the artist has made ‘more’ money (as a percentage) but ‘less’ money (as dollars). You can spin it whichever way you want, depending on your vested interest.
    I am willing to accept that perhaps artists are doing better these days than they were in 2005; if you provide figures to back it up. But this is a politician’s article, full of impressive sounding, but empty waffle.
    NOTE FROM JEFF – a video reply to this comment can be viewed here http://www.youtube.com/watch?v=Sm1YCFP_6xA

  • http://www.charleshammell.com Charlie

    What’s missing in the new model: marketing. Labels used to be so discriminating because they had to commit a large $$$ to the artist for marketing. Taking out the middle man (label, distribution) also takes out marketing. Artists aren’t necessarily any good at figuring out how to market. Thus, we’re left with a purely discovery-based model. Throw stuff out there and hope buyers discover it. Not very intentional or predictable.

  • Pete

    Your figures are bogus. You’re comparing album sales with individual track sales.

  • http://www.a-lyric.com/ Michael Leahy

    I’m encouraged in principle, but also see more hard times for performers (and labels) than ever before. There is pressure on fees for concerts, notably, and a lot of fear amongst venues and promoters. Non-performing songwriters have yet to see any sort of upside in the new situation whatsoever, as their income is based on album sales and radio plays. Albums are dying and radios are stitched up.
    But well-organised bands really are coming into their own with social media. Lot of work though!
    As I also work in movies, I see similar things happening. It seems that to make money from content, you have to monetise anything except the content (T-shirts, events or whatever).
    But whatever about the situation, it is what it is and we must adapt accordingly.

  • http://www.chrisswicegood.com Chris Swicegood

    Good and bad things here- someone made a good point about the flip side of getting $7 off a $99.9 sale- you see on ones own we still have to sell enough units to cover our own investment ie- paying recording costs, graphic design, self touring, promotion ect. – I’m in the mist of this myself right now in NY. Labels may take a lot from artists, but if they don’t sit on you, they have the ability to get you on the itune homepage, and get your music distributed internationally- something people like me simply can’t do on our own. The Internet is great just so long that music doesn’t become free to all, streaming makes me nervous.
    A NOTE FROM JEFF – a video reply to this comment can be viewed here http://www.youtube.com/watch?v=xatjXz7Eq0I

  • http://www.kelleemaize.com Kellee Maize

    Yes, very true. It’s all about marketing. I am a female rapper and singer but I am fortunate enough to own a marketing firm as well. Without my marketing expertise, I would not be #1 on google if you search for “female rapper” or in the top 10 on Amazon free albums for the past 6 months.
    Artists don’t need to learn marketing, they need to partner with someone that does. Lots of college kids out there that would love to be part of something like this.
    An Entrepreneurial venture where the artist and marketer work hand in hand to develop a sustainable business.
    That’s where the music industry is going.

  • http://www.patcoastband.com PLC

    It’s true artists are making money via direct sales. It’s also true that the filter of the record label is gone and virtually everyone with a guitar is now in the market. So while sales may be up, you forgot to mention that the number of people in the game has increased probably a hundredfold. So instead of a few making millions of dollars, you have millions making a few dollars. We have a saying here that goes something like “Go into the music biz…you’ll make tens of dollars!”
    NOTE FROM JEFF – a video response to this comment can be viewed here http://www.youtube.com/watch?v=xatjXz7Eq0I

  • Dean C.

    Not sure what the writer’s agenda is other than to be contrarian. I don’t see the figures to back up his contention that “More musicians are making money off their music now then [sic] at any point in history.” Others comments above have deconstructed his arguments to show he seems to be spinning a rosy picture out of air. Nothing wrong with being optimistic but his scenarios have a strangely aggressive Polyanna tone that sounds more like his personal agenda talking than a realistic analysis.
    NOTE FROM JEFF – a video reply to this comment can be viewed here http://www.youtube.com/watch?v=katiua43To0

  • http://www.gmo3.com G-MO

    Very very interesting

  • holden

    This is a manipulative article that serves TuneCore poorly by insulting the intelligence of its clients. The only thing more degrading for musicians than having their fans steal from them is being told that they are doing well “in the aggregate”. Despite the incantations of suggestive numbers there is nothing here that tracks what the average individual musician, producer, engineer, is earning.
    There is plenty of evidence in the article to suggest that TuneCore is doing well for its owners. Good for TuneCore. TuneCore provides a truly valuable service to its clients. But don’t treat your clients like idiots by telling them that they should be optimistic because you just bought yourself a new car.
    Want to give your artists some much needed dignity? Then tell us the average client income from TuneCore. Even if it is heartbreakingly low we will at least feel that we are dealing with an honest, forthright, and non-manipulative partner. We don’t need another Taxi.
    NOTE FROM JEFF – a video response to this comment can be viewed here http://www.youtube.com/watch?v=katiua43To0

  • The Jet

    I don’t think this argument is founded on solid grounds. I have only read the very first part but I already take issue. The figures you are representing, if I understand them correctly, are misleading and don’t arrive at the ends you say they do. If this statistic is representing total purchases, it becomes important to constitute what these ‘purchases’ are. If they represent everything from singles, to ring-tones, etc. then your ends are false.
    Total Revenue is down that is precisely why they are laying people off. It is a result of these offices growing unnecessarily large in the hayday of music sales when cd’s were $18. If your statistic represents what I have mentioned above, than the issue is that the sale of these singles and ringtone are mediums that sell at 99 cents. Total Revenue is down because these singles sales are cannibalizing the sales which were previously locked in at $18, CD sales.
    So, yes, more individual purchases are taking place, but they don’t generate the revenue they used to. Therefor what I have read of this article is misleading, which isn’t fair to your customers and clients who use this service.
    NOTE FROM JEFF – a video response to this comment can be found here http://www.youtube.com/watch?v=2r0VvpNLQAY

  • http://www.bluethumbproductions.com MT Studios

    1000 units is the new Platinum Record Award.
    Where is the dream? When is it a hobby?

  • http://www.brytespot.com robert

    The labels are just setting up computer systems to sell the music. Once they are in place they no longer need actual people to market their product…thus the reason for most of the layoffs. I’m sure it is great for Tunecore and unsigned artists who use this platform. I have made money off of their service and like how it works for the most part. But the music industry as a whole is nothing now compared to say…computer gaming. Kids will buy a Wii game before buying music.

  • http://www.azoz.com George Ziemann

    By these metrics (and using small numbers to keep it simple), if you sold 500 albums on iTunes last year (approx. $5000 total revenue) and this year you sold 2000 songs ($2000), that’s a 400% increase in “music purchases,” but it’s still a 60% DECREASE in total revenue.
    Musicians definitely can get bigger slice of the revenue now than they used to under the traditional system, but if you figured that out five years ago, the party is over.
    The reality is that year-over-year revenue from record sales keeps dropping and has been for almost a decade. Using a skewed perspective to pretend otherwise does no one any good.
    NOTE FROM JEFF – A video reply to George’s comment can be found here – http://www.youtube.com/watch?v=-QHIVI5t6nI

  • http://www.PingMyFaceTunes.com iTunes 10 Ping Artist Steven

    There’s also the general economy dip that affects everyone.
    Also, along with some of the points Jeff mentioned in this article, I would add that many artists can save on costs of recording with all the home studio recording technology and more affordable software available. This kind of savings could count as earnings depending on how each individual views their own finances.
    Artists can build a more valuable direct relationship with the fans now with social media, especially the Ping artist profile.

  • http://www.reverbnation.com/beanka Tre’

    hey guys i agree with a lot of the prespectives on here.. i am an indie lable with very talented artist and i can’t see where sales are up for indidviduals..i agree that has a whole sales are up because more artist are online trying to make it but what is definately down is revenue and individual revenue..however, if any artist are very talented and really make good music there is a way to make mass amounts of money, once again if you are lucky, but i think ths synchronization is a much better way to drive your revenue i you can get a licensing deal and in return it will drive your mechanical revenue which comes from record sales…i think if you as an artist can make this happen you can actually make a great amount of cash..just a thought..please check out my artist BIANKA at http://www.reverbnation.com/beanka she is simply awsome!!!

  • doug

    I agree that the article tries to paint too rosy a picture. The bottom line (which may be overlooked) is aimed at independent artists: even if “sales” are up and they are heavily skewed toward singles vs albums, the artists could be making the same money. The problem in that line of thought is that, yes it’s great for independent artists who sell through these markets via Tunecore. But for the signed artists who have their music placed online via their labels, they are making single digit (or even fractional) percentages of those digital sales, earning them even less than before. Hence, not such a rosy picture for many others.
    The article really could use some balance and qualification.
    And I agree with all the comments about marketing: marketing really is key. Labels can often do it well, but you’re risking a lot (of your rights) to sign with one for them to possibly not do it well, which is also common.
    NOTE FROM JEFF – a video response to this comment can be found here http://www.youtube.com/watch?v=phA3HrZZfqI

  • Ruben adame

    The only chance you get as a musician is to partner with an independent record label that can put you on the map let the bussines people do their work and you keep writing music but make no mistake you have to be a great artist so tunecore we like you but we are not stupid

  • Justin

    I’m very educated on this matter and work for a privately owned record label that gives it’s artists 75% of their revenue(thus our artists make good money). I also work with the highest level executives and agencies in the independent metal/indie rock circuit. This is true but it’s a very biased theology. The reason is this. There is to much supply and demand is still not even worth considering it a market. The dollars are being spread to thin because everyone is buying their own or their best friends material. In this surplus all we have are a bunch of half assed recordings being bought by people for the sake of the buyer “being nice” or cool. It has turned into legitimate success for bands like Alesana or Drake. On the other hand so much unartistic and copy cat music is being put out this whole industry is filling full of unappreciative people trying to make a buck or be famous. There is very little inspiring music coming out these days and it’s due to giving the market EXACTLY what the market can control, demand through unorganized provate production. In theory it makes great sense but in reality it has just oversaturated the market. The housing crisis due to oversaturation is no different than music. Except the people with real dreams will be forgotten because Joe blots over here wants to be accepted in his clique of friends.
    NOTE FROM JEFF – a video response to this comment can be found here http://www.youtube.com/watch?v=xmQOG73pZpY

  • Ben

    It depends too on what your goals are. If your goal is to get as many people as possible to hear your music, signing with a decent label (given the opportunity) may not be a bad option.
    You could think of it in terms of business. Signing with a label could be thought of as working for someone else in an ‘entry-level job’ for a period of time until you have enough of a fan-base to venture out on your own. Same in any other industry. A lot of professionals – graphic design, sales, whatever – work for another firm/company before trying to start their own. They learn the industry, build networks, create clientele, then apply it to their own venture.
    Trying to handle the marketing, social media outlets, admin, etc. is a TON even for artists who are privy to the technology, as nice as it all sounds. This labels can do for you.
    Maybe not a perfect analogy, but at least something to think about.

  • EM

    This article is about overall sales- tunecore and cdbaby deal with the long tail almost exclusively, so there is a reason why many artists are not seeing more money-or a lot less than they did years ago! more of that “crap” music out there!:-)
    Really, I wish people who write this kind of stuff would spend some time actually discussing reality- there is more competition for sales than ever, and overall music is the the first of many industries to be hit by the coming world communism- whether you think that’s good or bad is up to you, but it is a fact that is pretty squarely in the face of anyone wanting to make a living, or at least be solvent with their art.
    -EM

  • http://www.rhapsody.com/kr K.R

    K.R – StreetSmartz Album Available On iTunes

  • http://twitter.com/slainson Suzanne Lainson

    “The cost of buying music has gotten lower but the amount of money going into the artist’s pocket has increased.”
    We don’t have industry statistics to support this that I know of. If you are comparing what signed artists used to get per album to what those same artists are now getting per album as unsigned artists, they may be getting more money.
    But if you look at artists who have always been unsigned, who were selling cassettes and then CDs directly to fans at shows, then they are making less per sale because competitive prices are driving down the price fans are willing to pay for CDs and how many CDs they are willing to buy. The glory days for being an unsigned artist were when you could record your own album and then sell the CD for $15 a piece. Once you recovered recording costs (which tended to relatively low even if you were using a studio because most local studios never charged as much as the big name studios), you’d pay about $1.50 per CD and then sell it for $15. Those were great margins and supplied the money that allowed the artist or band to tour.

  • prove it

    Congrats Tunecore for making life easier, but seriously these kinds of articles are -propaganda- unless you present the other facts which you are to afraid to publish such as the yearly, quarterly, and monthly trend values for
    . Average Sales per artist in the following sales segment categories
    . New Artists (less than 1 year on tunecore)
    . Artists (greater than 1 year on tunecore)
    . Artists with less than 20 songs
    . Artists with 21-50 songs
    . Artists with greater than 50 songs
    Then break out the results by
    . Independent Labels (less than 1m in revenue)
    . Independent Labels (greater than 1m in revenue)
    . Major Labels
    . Artists (less than 10k net)
    . Artists (10k-100k net)
    . Artists (greater than 100k net)
    And further slice it by lifetime, last 5 years, last 1 year.
    NOTE FROM JEFF – A video reply to this comment can be found here http://www.youtube.com/watch?v=lVYOKJNgtps

  • http://www.myspace.com/emmettnorthjr3 Emmett North Jr.

    I’m happier than ever now with the state of big record labels and more happier for the independent artist and writers that we are finally getting heard and getting a piece of the pie.I’m happy to have joined companies like cdbaby,tunecore,itunes,rhapsody and others giving us an outlet,voice,choice and chance to be heard and marketed without the majors,i agree with most of what’s happening to the music industry sincerely & musically,Emmett North Jr.

  • owen

    the problem is that you have to do all the marketing yourself and what are the chances of getting a full page ad in a music mag ?

  • http://www.kdencemusic.com Kdence

    I must give Tunecore and Jeff Price major props! This is probably the only Newsletter I actually read in full. You guys always know how to know how to keep the spirits lifted. Tunecore 4 life!

  • http://scout66.com Janet Hansen

    Why is Nielsen still in the equation when most music sold is from indies who don’t report to that service? If we had real numbers that included all music sold, a whole different perspective would take hold.

  • http://www.myspace.com/dcrglobal LAMAR E. HAYDEN

    I love everything I’m reading. It’s wonderful to have a source of real music business discussions other then whats the norm. My eyes and ears have been opened to a lost point of view. Artist development done by the majors, from their coffers. Once this piece of the puzzle was all but abandoned, and left up to the A&R’s and their network/connections, the soul of the industry vanished. New and undescovered artist became filtered through a system which destroyed art, and created a financial choke hold and burden upon the major labels and independent artist alike. Music became more of a wealth driven machine, instead of the great and unique talent machine which is driven by new wealth. The ear for great new music died. It’s rebirth came from the internet. As stated and known by so many, the internet is a great place for artist and their music. Period. But a major artist has major backing. Left up to the indie artist/label/band, is a task which actually helps you learn the music business but can also(more times then not) cause the indie music to suffer. Majors have the pennies(compared to an indie’s budget) it would take to run a successful single/album campain for any artist digitally if chose to. Indie artist are forced to supply their own budget and conduct their own business dealings in a very minimal way and impact. That actually takes away from the over all impact of their music. Indie artist do make money and do get placements,tours, etc, but they cannot expose themselves to a GLOBAL AUDIENCE past the internet. If filtered correctly and digitally, like any normal major artist, that cost would not be missed by the majors. But the impact would be GLOBAL. New independent artist can become discovered GLOBALLY WITH MAJOR BACKING. That opens up a new digital and physical music market. It also allows for the indie artist to build a global following from start to peek in the correct format. Thats a more dependable fan base and one who could carry a new hit song to unheard of acheivements. The way is digital. And it’s new. So should the mindset become. This gives the industry a legit “farm system” and every new artist a real shot at major success. If The energy behind the music is greater, so shall the music thats created and developed become. The world needs to hear that song which no one knows about or that act/artist who could sing a nation to PEACE, but their music is far from “run of the meal” or industry standard. Where’s the “seekers” and “discoverers” of new music gone? Major lables were all but founded on this principle. The risk takers have closed their ears and built sound prof walls around their musical souls. Small case in point. I’ve just proposed to “MYSPACE.COM” a unique system which would open new doors for the indie artist/music they have in their servers and social network . Since myspace seems to enter into numerous deals with the major record labels but never includes the indie artist, it’s time for a change. Direct music sells through myspace.com for all indie artist is their best bet. If you sign up and own your music, you should be paid!(streaming, ringtones, downloads, placements, etc). Right there in your myspace.com music player. Why would they not allow you to get paid? Even if the normal indie artist on myspace only averages 500-1000 friends! Why should they get paid, you may ask? Well because they are working artist like everyone else. And they own their music so they are “copyright holders/owners”. Plus, if you do the math, 500 friends(the low) that may buy 500 digital files/purchases/merchendise ranging anywhere between .99 cent to a $100 can add up! Considering MYSPACE.COM is one of the biggest indie artist destinations to post their music(in the millions) online, the numbers are staggering. Something so small, could change the way we know music. But for that to work, there needs to be “tweeks” to their format. So now indie artist are offered new page formats for artist on MYSPACE.COM and can also upload a 100 songs! And have 25 displayed on their new artist pages! Hopefully soon, they’ll be a (buy now from myspace.com!) tab next to each song. But i think you get my point. If not, please visit: http://www.myspace.com/dcrglobal to get a better understanding. PEACE. “LAMAR”(KING COOL’P.) founder/CEO/artist of D.C.R GLOBAL.

  • http://www.fff-fighters.com Top Fighter

    If it’s all OK then:
    Why are all real great/famous musicians OLD these days? If you’re 16, your heroes are 40-60+ What happens when they die? Why is a BEATLES album the No.1 best selling album in the US within the last decade? What happened to passing the greatness torch (from the one to the next generation)? Where are the new guys? Where is the excitement that allows space for new guys?
    If the industry is doing alright then why do indie labels post messages like “The Murder of Music” on their sites explaining why they can’t send out their artists on tour (Lion Music)? And finally: The labels: Tell me who made it happen that bands such as Van Halen, Motley Crue, U2, Metallica, Linkin Park reached the state of fame that they have? Through their labels. Like it or not.
    How did the kid in Sweden know about those bands? Because the label told them, and the kid had to save money or beg it’s parents to buy the music. Hence it was WORTH something, HENCE there was APPRECIATION and space for greatness. What’s free has no value.
    And how did those bands play in Sweden? With the money from the label.
    Some artists trash talk their label, but why do you think bands such as Linkin Park are STILL with Warner Brothers after 10 years?
    Linkin Park were one of the last bands that reached the BIG status.
    Now though, for which new band has the principle of “music is free” worked so far?
    MUSIC IS FREE NOW (Is it really?)
    I teach a lot of guitar students and every single one, that I EXPLAINED to how important it is to support music, now buys music. Ages: 13-52. Most were combat downloaders before I converted them. Why, ’cause they’re mean? NO! Because nobody explained the consequences of NOT paying for art to them. Most people “threaten”, when they should “explain”.
    NOTE:
    I have a song that is charting at #57 in the Indie Music Charts (and a pretty certificate by IAIRA), but I have NO sales, hence no budget, booking agent or manager, hence NO TOUR to sell stuff you can’t download:)
    My conclusion:
    Music does not have to be dirt cheap or free. But people overwhelmed with technology need to be told why it is crucial to support the art they like. And the funny thing is, I think that if people would get explanations rather than threats, they happily WOULD pay for it. And if people would buy their art, and the money WOULD go directly to the artist, well then the internet and the digitalized Indie- DIY thing would suddenly make a lot sense!
    “The internet makes it easy to get heard these days, but it’s easy for everyone, so I don’t know if it’s that easy .” (Joe Satriani)

  • http://www.mLthetruth.ning.com ML the Truth

    I am an independent hoping to release my album on a shoe string budget. I have been blessed with a contest win that netted me enough to produce physical copies and pay fees to digitally release the project. Maybe my sales will be the whole shoe i need to go with my shoe string budget to be successful and have a testimony to share of this article that inspired me to keep after my dream. Thanks! ML the Truth of 100 Drums Productions

  • http://www.tunecore.com/electronicsausage paulproudlove@rogers.com

    whats it all about alfie ? send in the clowns.

  • Don Carnevale

    Even though the industry has changed radically, there is something about the album format that elevates the craft. Like scenes in a movie. Abbey Road, Brothers and sisters, Dark side of the moon. Many others come to mind like the Cars album side with Moving in stereo. Smoke a J put on the headphones. That’s what the music business was built on

  • http://www.j-roland-kelly.com J Roland Kelly

    Jeff Price,
    Thank you for Tunecore. It was worth doing. The world is a better place because of your work.
    Sincerely,
    J Roland Kelly

  • qcfunk

    To make a long story short, I love being a music producer, In the 90si got paid 10,000 dollars upfront even before a record was placed on an album i would get 3500,.,.,now with technology,and software etc the production game has become oversturated, everybody with a social networking site is an artist or producer.The laws of diminishing returns has taken effect, guess what am in law school now,.., do i love my art yes.,,.what the future has in store , i dont know????but i dont want to be the 100 millionth person on line selling my music or giving it away for free,..,,.

  • http://pulse.yahoo.com JAMES BEDU GRAHAM.

    WHAT A GREAT RELIEF THE ARTICLES I HAVE READ POINT TO AN INSIGHT AND TRUE UNDERSTANDING OF THE DYNAMICS OF THE INDUSTRY WORLWIDE.
    FROM EUROPE TO ASIA PASSING BY AFRICA,IT IS QUITE CLEAR THE INTERNET HAS DISTURBED THE OLD MODEL OF BUSINESS GIVING PEOPLE LIKE JAMES BEDU GRAHAM AN AMAZING CHANCE TO BE HEARD AND DISCOVERED.
    IN ESSENCE IT IS BETTER TO GRAB A
    IN ACTUAL FACT THE MAJOR LABELS ARE STILL IMPORTANT FOR THEY ENABLE ARTISTES AND BANDS TO BE ADVERTISED AND EXPOSED TO A WIDER PUBLIC.
    TALENT SHOWS LIKE BRITAIN HAS GOT TALENT,MENTOR AND STARS OF THE FUTURE ARE OTHER AVENUES FOR SOME ARTISTES.
    STILL IT IS VERY HARD FOR UP AND COMING ARTISTS TO GET THE LIMELIGHT.
    BUT ONCE YOU GET THE OPPORTUNITY MUSIC COMES TO BE A GREAT MEDIUM FOR COMMERCE AND ENTERTAINEMENT.
    FROM MY PERSONAL POINT OF VIEW MUSIC MUST BE NEUTRAL AND OBJECTIVE TO ACHIEVE A JINGLE MESSAGE.
    WEB LOG:PULSE.YAHOO.COM
    USERNAME:BEDUGH
    PASSWORD:COX.
    IN ESSENCE PEOPLE SHOULD JUST GRAB SOME BRITISH POUNDS PONY UP 200 UNITS LISTEN TO THE ADVICE OF THE ENGINEER AND BE AMAZED BY THE FEEDBACK OF YOUR VOCAL AND ENGINNEERING BUSINESS.

  • http://awakeawake.bandcamp.com Awake! Awake! Band

    Do they want to be told?
    My friend and I had a long discussion one night about this very thing. We agreed that as the industry has changed and there are more choices and ways of listening, listeners must change and learn to discover music for themselves. That’s the beauty of it you get to decide what you want to listen to now. We also agreed that certain groups of people like to be told what to listen to. They for one may be older and that’s just the way it’s been their entire life. They might be too busy working and raising kids. Maybe they are still scared of the ipod and some people are just plain lazy. I think that these ridiculous comments about there being a lot of bad music etc, just stem from that group that wants to be told. I agree there is a lot of bad music being made as well, but whenever I hear bad music I just click on something else. A total loss of about 30 secs. New filters are always being invented as well they to should be discovered by the listeners. The major labels will always have some kind of place, because a percentage of the population wants to be told what to listen to and what group they fit in to labels are great at control. As for everyone else, we as artists should be trying to find ways to reach those people.
    Here are some great ways to Discover new music:
    – iTunes :Every week they have around 2-3 Free songs for download and a music video. The styles and quality vary, but the neat thing is that these are picked by the iTunes staff and often times are indie artist that have never seen a major label. I discovered The xx and Laura Veirs through this. Check every tuesday for a brand new free download.
    – La Blogotheque’s Vimeo Channel (A Take Away Show) http://vimeo.com/channels/takeawayshows
    They film artists around the world playing in nontraditional settings. Whatever happens happen applies. If a bus drives by and honks the horn they don’t edit it or do the shot over, they keep going. They update often and have featured artists such as Phoenix, Josh Rousse, Margot and the Nuclear So and Sos and of course tons of great artist of I’ve never heard of.
    http://www.TheSixtyOne.com
    It’s a site based around a musical game aimed at encouraging you to listen to new music. It’s a different spin on Pandora. I found The Depreciation Guild there. It’s a great replacement for traditional radio in work settings etc. Unlike traditional charts, songs are not ranked by the total number of plays. Songs are given “hearts” by listeners instead. Listeners earn hearts only by completing quests. Basically if your an artists or a label trying to jump to the front on the site you’d have to spend so much time that it definitely wouldn’t be worth it. So you have to leave it up to the listeners.
    http://www.Noisetrade.com
    Noisetrade is a free download site where you can post a facebook or twitter message or put in 5 friends emails in exchange for music. It was started in Nashville Tn by artist Derek Webb, but has since spread everywhere. It’s free for artist to upload their music and fans are also encourage, but not required to tip the artists. It’s a great place to discover new music, because if you like or aren’t sure if you like an artist, you can simply download it and check it out when you have time. Lovedrug for one has a free EP on there. There are a lot of Contemporary Christian artists on the site, but there are also a lot of great indie artists as well.(Don’t want the Lazies complaining).
    -Andrew

  • Clutter

    Tunecore is a cool site and tool for artists making it easy to get your music released. However, the one thing that still remains to evade the majority of artists that are releasing music via Tunecore is how to cut through the clutter and actually sell downloads. Sales maybe up but where are the stats showing how many artists that have released a song or album through tunecore have actually sold more that a handful?
    The next great tool needs to be one that allows DIY bands and artists to cut through the clutter effectively and inexpensively.

  • http://www.cannonind.co.uk Cannon

    The way people access music has changed completely. The power of the label to dictate where, when and how their product is consumed has been massively undermined.
    I agree with the distinction that you make between the way people used to buy a whole album, and how now people purchase ‘a la carte’. This has provided many problems for major labels, and is, in my opinion, the single biggest reason for the falling profit margins. It is also a major argument against pirates destroying the industry. I am a great believer in ‘the album’ as a body of work, however, if the label releases an album with 3 good singles and 10 tracks of filler, it’s no wonder the consumer is leaving the bad tracks on the e-shelf.
    To read more about these ideas check out the article, ‘Piracy, The Digital Economy Bill & The Price of Music’, on my website.
    [ http://www.cannonind.co.uk ]
    I agree that the changing state of the industry provides more opportunities to artists, this does have its own problems. There are so many outlets for music, and such a vast amount of music, it is hard to get your own voice heard, above the ‘noise’. Indeed, even if more songs are sold now, if they’re being split up by a much bigger number of people the real profits for the artist might not change at all.
    Music will always need ‘taste-makers’. The favourite radio station, indie record shop, or trusted label. In the internet age the vast ways of communicating with people provide many ways of contact, with blogs, review websites, internet radio stations, message boards. You could argue that the amount of ‘noise’ from rival sites makes it as difficult for fledgling commentators as it is for new artists, however, my feeling toward both groups is the same:
    If what you produce is quality, if you believe in what you do, if you have the nous to make contacts and links, and you have a little bit of luck then you will make progress and be rewarded.
    Thank-you for the article, information, debate and inspiration Tunecore. I think the present is one of the most exciting times in the history of music, and it is people like you, me and the other people reading and contributing that will shape the future.

  • http://www.myspace.com/rauschofficial Doug Rausch

    All perspectives of this [seemingly eternal] argument have their validity, but there is one element always left out of the equation: TIME.
    7 vs. 2, a factor of 3.5, may seem like a significant benefit to some, and what good sir Jeff says is certainly true….
    But to make 100K with a major – by selling [a little more than] 50,000 albums – is STILL a little more realistic than many DIY-ers getting to the necessary 14,000+ to achieve the same [feel free to adjust the math to be talking in terms of single songs].
    Impossible? No. But even with an extremely diversified revenue stream strategy, the investment required to market/promote one’s self alone requires an exponentially greater amount of time – and thus patience – than ever before, to financially break even… let alone turn a little profit.
    Those of us who have committed ourselves to music for music’s sake aren’t necessarily greedy people, but we do have a realistic side – if only by necessity. To be successful long-term does require a little help from our friends :)

  • Kevin Pineau

    The internet is proven to be one of the most powerful tools for marketing in history. I think this article is a good read.
    Kevin Pineau

  • http://harrybroker.net/crystalclear/ Harry Broker/aquablauw, Google search me!

    Statistics are nice, guys. Nielsen ratings, etc. Numbers are great, etc. Bottom line is what we see in the stores is as the public sees. Whatever stores we go to, that are still record stores, are pushed to sell many CD’s on a large discount. Like $19.99, now for $9.99? Why? They can’t get rid of it. Many boxes are filled with
    The Doors, ELO..well let’s put some used CD’s for $ 3.95 into it too, etc. That shows a number 1 problem. Walmart used to have 4 isles of double racks of CD sections, now only one double side, as the other open isles are filled with Xbox games software, Phone cards and some mp3 players, etc. Those are facts and no Nielsen ratings. Tunecore helps me with selling my songs, instead of worrying about me hitting the billboard. Without Tunecore, I would have been nothing. My http://myspace.com/harrybroker adds 30 to 100 new friends daily, from all over the world. Why? Because of Tunecore. No Nielsen ratings needed, here. People download it from the net, burn a CD and plays it in their car. Bottom line? Major labels better watch..cause we low classed indie/unsigned, no good indie label artists will pass these major labels, earning 100% royalties instead. Self managed and totally in control. I have no band, no radio play, no management and no recording contract. Why am I selling the hell out of my songs all over the world? Yep, Tunecore is the answer! Proof? Sure, just Google search aquablauw in each country, mainly, Japan and Germany and you’ll see. http://google.jp or http://google.de…. Just a small sample. Also read my response on my unprofessional demo version, from people all over the world. they buy my songs, not the major, so called label… (Ahum, enough said!)

  • 2SMART

    I’m 2smart, i have almost completed my Debut Album. I will like to sell some sungles online.

  • http://MYSPACE.COM/DEC4YA DA TRUF

    CHECK ME OUT MYSPACE.COM/DEC4YA
    OR CDBABY.COM/NAUTi
    ALSO iM ON TUNERCORE

  • http://www.DurhamJazz.com Topsy

    Deregulation is always scattered at first. The Record Companies, Publishers and Managers of old ABUSED their authority and a LOT of very famous and GREAT talent (who suffered through breaking down barriers) – DIED BROKE, some without a tombstone! Not to say these Artists didn’t LIVE better in comparison – but with additional people (Managers & Lawyers) appearing as “CO-AUTHORS” on their copyrights, &/or the “WORK FOR HIRE” loophole being slipped in Contracts or forced on desperate starving artists so they lost their Publishing in the long run, and “RACE RECORDS” halting the careers of musicians of entire American genres – to the advantage of foreigners – can you blame the new generation for wanting NOTHING to do with it all? If one can successfully hurdle all the steps in COPYRIGHT TERM EXTENSION, then POSSIBLY a small profit margin is reached for many Composers in their later years, or for their heirs. Now, the heirs of that generation have been given a chance at DEREGULATION and are exploring it to the fullest. COMMENDABLE. But one has to realize that beyond sales, the exposure comes from performing well attended FESTIVALS, WINNING & PERFORMING at major MUSIC AWARDS. If you think either of these happen without a Record Label, you’re still in the dark ages.

  • http://spreeblick.com johnny

    Thanks for a great article. There’s one point though that I can’t find any numbers to. You say that “More musicians are making money off their music now then at any point in history.” – How do you know?
    REPLY TO JOHNNY
    I recorded and posted a video reply to this question – it can be found here

    Jeff

  • http://www.changeagentgroup.com Greg

    One shift the industry has made is to invest in less unproven talent and to have fewer writers on contract. That definitely shifts the risk to the writer, who is chasing a smaller potential revenue pool.
    However, those who can make the shift to a different business model will indeed thrive. The blacksmiths may have had it tough as autos displaced horsedrawn carriages!

  • Anonymous

    “But to make 100K with a major – by selling [a little more than] 50,000 albums – is STILL a little more realistic than many DIY-ers getting to the necessary 14,000+ to achieve the same”
    But nowadays there’s far more chance of (say) ten people making 10k each than there was before.
    Problem? I don’t think so. Surely that’s a better way of going about things than the previous model?
    I, for one, would much rather have more choice and lower prices than have a few major labels pushing fewer things. Especially when said labels were doing it simply to generate more revenue for themselves, and providing exposure for fewer artists.

  • http://thecynicalmusician.com Krzysztof Wiszniewski

    This is a bit of a spin Mr. Price, so why don’t you come out and say it.
    The gross number of sales is meaningless in itself. The second necessary element of the equation is the price. Only through multiplying one by the other we arrive at the revenue figures which is what really matters.
    Since you bring up the Nielsen figures to support your claims, I call BS, as the 2009 SoundScan report shows a continuing trend of declining revenues – that’s all revenues, not just from albums as you suggest. In other words more musicians are earning less money.
    That’s on aggregate, mind. Given the fact that more sales are generating less revenue, the average revenue per musician is declining even more than the total.
    Furthermore, your comparison of per-unit revenues conveniently ignores issues such as marketing or personal advances paid out to artists under the label system.
    Thus, when signed with a label the artist will:
    a. receive the cash for a number of sales upfront (the advance),
    b. have the benefit of marketing expenditure that should assure at least some sales.
    Given recoupment provisions, it is possible that the artist won’t sell enough units to make any money over and above the advance, but the advance is still cash in the pocket (often considerable cash, though less than it used to be).
    Unlike DIY where all the costs come out of the artist’s pocket.
    Do not misunderstand my position. I think TuneCore is providing a valuable service. However, I think aspiring artists need to understand their position fully and posts such as these are misinformation at its worst.

  • http://www.tunecore.com Jeff Price

    @ Krzysztof
    Although I respect your opinion, factually you are incorrect.
    YOU STATE:
    “The gross number of sales is meaningless in itself. ”
    REPLY:
    This is nor accurate – gross numbers are important as they represent more units of music being “consumed”. with every purchase of a song (via paid stream or download) an artist that goes direct makes money. The amount of money they make is greater despite it being sold for less.
    ALSO – with every legitimate stream (or radio play) of music in Asia, the EU, North America, South America there are public performance royalties and digital transmission royalties being earned.
    And that’s just focusing only on those two income streams
    YOU STATE:
    “The second necessary element of the equation is the price. Only through multiplying one by the other we arrive at the revenue figures which is what really matters.”
    REPLY:
    This is not accurate – as an example, you can sell no music, but make a large amount of money from Derivatives, Reproduction, Merchandise, Gig Income, Public Performances, Public Display, Studio Musician, Digital Transmission and a lot more.
    These are individual “buckets” of income that can be made – each not relying on the other.
    YOU STATE:
    “Since you bring up the Nielsen figures to support your claims, I call BS, as the 2009 SoundScan report shows a continuing trend of declining revenues – that’s all revenues, not just from albums as you suggest. In other words more musicians are earning less money.”
    REPLY:
    Soundscan does not provide data regarding revenue, they provide data regarding unit sales. The RIAA supplies information on revenue for its members – that report is linked to in this article.
    As my article suggests, despite declining revenue for the labels, there are new income streams – in particular, the increase in digital transmission revenue as collected and reported by SoundExchange
    But more importantly, you are correct, revenue for LABELS is down – not artists
    YOU STATE
    “Given the fact that more sales are generating less revenue, the average revenue per musician is declining even more than the total.”
    REPLY:
    You comment applies to the traditional model of the less than 1% of bands getting distribution by getting signed to a label. It ignores the hundreds of thousands of artists going direct who previously did not have access and therefore sold nothing. They now make money off the sale and use of their music.
    YOU STATE:
    “Furthermore, your comparison of per-unit revenues conveniently ignores issues such as marketing or personal advances paid out to artists under the label system.”
    Thus, when signed with a label the artist will:
    a. receive the cash for a number of sales upfront (the advance),
    b. have the benefit of marketing expenditure that should assure at least some sales.
    Given recoupment provisions, it is possible that the artist won’t sell enough units to make any money over and above the advance, but the advance is still cash in the pocket (often considerable cash, though less than it used to be).”
    REPLY:
    I disagree. First of all, you conveniently ignore that in this exchange between the artist and label, the artist has transferred its rights to the label. In other words, the copyrights that were once theirs are no longer theirs but have been assigned to another entity.
    But even with that point aside, 98% of what the majors release fail so the marketing they provide by no means provides the results you suggest. The cost to record has dropped to incredibly low levels and the cost to “market” has dropped to almost nothing as we all now have direct access to the media outlets (i.e. YouTube, FaceBook Twitter) that cost nothing to use.
    Yes it takes time and work, and as an artist you might choose to give up rights or revenue to hire others to put in that time and work, but to suggest that an artist needs to drop $250,000 for a video and/or a promotional CD single is the way it used to be, its not how it works today.
    Finally, advances have dropped significantly – they hardly leave a huge cash cow in anyone’s pocket. As an artist you must ask yourself:
    is it worth giving up ownership of my copyrights and masters in return for a small amount of money in my pocket (i.e. $5,000 to $10,000 after management takes it cut, a % of it is used to record and the rest is split between band members). In addition, the entities that I am assigning these rights to have a 98% failure ratio and no longer provide me the suite of services they once did – in particular distribution and access to media outlets

  • http://thecynicalmusician.com Krzysztof Wiszniewski

    Thanks for the reply Jeff. Permit me to tackle the matters in order:
    Ad.1
    No, gross consumption does not matter. Taken to its logical conclusion, an artist shouldn’t charge anything because the Law of Demand assures they’ll shift most units when the price is zero. Except that at price zero, all things being equal, it doesn’t matter how many units they shift – the result will be the same: nothing.
    Ad.2
    I am also told that there’s money to be made in plumbing. However, the links between record sales and the various “buckets” of income you suggest are tentative at best. Yes, purchases of recordings may lead to increased demand for live performance, but it isn’t exactly helpful if you live in Texas and are shifting oodles of songs in Uganda. Same goes for merchandise, while the rest is only tangentally relevant to recording sales.
    Ad.3
    My bad, I should’ve said “estimated revenue” which did in fact figure in the Nielsen presentation at NARM (http://www.narm.com/PDF/KYCNielsenMusic.pdf). The estimate is consistent with data from other sources.
    The important thing is that gross recording industry revenue – that is: the amount of money being spent on music has just about halved over the past 10 years. There are a damn sight more claimants for it now, so you could probably make the point that proportionately the labels have lost and the individual artists have gained, but:
    1. it’s likely that the loss to the labels is greater than the gain to the individual artists
    2. given the huge number of individual artists to enter the marketplace, the gain to each individual artist is likely to be miniscule
    Ad.4
    That’s the big question: the music business is a business and as such it involves difficult decisions and trade-offs. To that end, it is important to have a realistic assesment of one’s situation.
    The truth of the matter is that at present the music business is in a dump. People aren’t spending money on music (check consumption statistics if you don’t believe me) and media businesses of all stripes – from US broadcast radio to Google – are doing their best not to have to either.
    I understand why it is important for TuneCore to show the viability of a DIY music career, but your post (and subsequent reply) sound suspiciously like the kind of far-fetched logic that a number of “new music experts” use to justify while file-bartering is the best thing to happen to music since the bone flute.

  • http://www.tunecore.com Jeff Price

    @ Krzysztof
    I just absolutely disagree with you from an empirical and opinion basis.
    An artist makes money by monetizing fame. There are large numbers of way to do this if you control all the rights and can participate in ALL the revenue streams. Labels can only participate in revenue from the license or sale of music – not in any of the other income streams (this is why they are trying to do 360 deals). An artist that controls his/her own rights can give away their music to generate this fame and then monetize via all the other income streams – a label cannot. This is one of the reasons why label revenue is down and artists revenue is up.
    It is absolutely false to state that “gross consumption does not matter” – of course it does. With each “consumption” of music, money is made, fame is generated, pubic performances income is created, sales occur, ad revenue is created, music is heard, fans are created and DMCA compliant fees are paid for each and every stream of music in the US that comes via the internet, satellite radio and cable TV.
    This is absolutely a good thing and to suggest that this income is irrelevant or does not count is doing a disservice to musicians. There are federal laws in place that require the songwriter, “label” and/or public performer to be paid money whenever their music is streamed on-line, played in a retail stores, played on AM/FM radio (in most places on the planet), played on TV, streamed as part of a video on YouTube, played in a restaurant, played in a movie theater in the EU or UK, streamed on demand via Spotify, Mog or Napster. In addition, digital stores must negotiate and agree to pay royalties for music bought at their stores – this is on top of the mechanical royalty.
    Songwriters get paid if someone covers their song and reproduces it. Then there is the merch income, gig income, stem sales, RockBand game play track sales, studio musician sessions, jingle writing, monetization of lyrics (these cannot be reproduced with permission from the songwriter under copyright laws), synchronization licenses, ad revenue income, sponsorships and more…
    You will notice that the majority of the items listed above are NOT predicated on “sales” of “albums” or songs.
    You state that ” the links between record sales and the various “buckets” of income you suggest are tentative at best.:
    With all due respect, you are dead dead wrong. And that’s the important point. This is why the Billboard Top 100 albums no longer accurately represent the realities of the market place. Secondhand Serenade had millions of friends on MySpace and made huge amounts of money from gigs with no albums sales (he had not even released one at that time) or label. Boyce Avenue were flown around the world to headline gigs playing to 20,000 people with no album release or label. Nevershoutnever sold over 50,000 t-shirts via Hot Topic with no full length album out. Kelly sells out gigs and makes a tremendous amount of money via public performances. William Fitzsimmons gets a number of significant master use licenses with no releases. Unsigned bands with no releases sell over 30,000 copies of their song for game play in rock band and this list goes on and on.
    Using your plumbing analogy – laws around the world are set up so every single time the “Water” is turned on, the “plumber” automatically gets paid. This a great thing for artists, songwriters and bands and it generates some signifiant revenue.
    The mistake being made is to focus on how it used to be – not on how it is today. It used to be almost only about album sales, now its not. It used to be only those “signed” artists could get any real money out of public performances, now this is not the case. it used to be only “signed” artists could get synch placements into TV shows or commercials, this too is no longer the case. It used to be only “signed” artists could get major gigs, this has also changed.
    Music is plugged into a global network that can be tracked more accurately than ever before. Each and every play generates money.
    The “estimated” revenue you are referring to is estimated revenue from the SALE of the music – this is what NARM is about. This is what the labels are about. Making money from SELLING music – not making money from the use of music in all these different income streams, not from monetizing fame. This is the dilemma for them.
    You state:
    The important thing is that gross recording industry revenue – that is: the amount of money being spent on music has just about halved over the past 10 years.
    This is not accurate nor is it the “important thing” Money is being spent, more people are buying music now then every before. More artists are selling music now then ever before. More artists are making more money off the sale of their music now than ever before. And just as important, corporations are subsidizing the costs of allowing music fans to listen to music via advertising and/or paying the fees themselves out of pocket as the governments of the world have set up laws to allow this to happen.
    ASCAP’s 2009 financial results had royalty payments to ASCAP’s members total more than $863 million – an over 10.5% increase in revenue dispersed compared to 2007.
    BMI has the same growth with over $789 million paid out to the songwriters, composers and copyright owners it represents.
    SoundExchange has collected and paid out $500 million dollars in the past five years alone – and there are tens of millions still sitting there waiting to be collected (so register with SoundExchange!)
    None of these figures is included in the NARM figures. Either are synch license income, ad revenue, mechanical royalties, gig income, merch income or SoundExchange royalties (although the RIAA does list $155,000,000 in NEW income on their year end statements from DMCA compliant streams).
    Y(OU STATE:
    “it’s likely that the loss to the labels is greater than the gain to the individual artists”
    This is just not true. Artists have the same access to media outlets to be discovered, make more money off of each sale, get access to global distribution all while keeping their rights.
    YOU STATE:
    “given the huge number of individual artists to enter the marketplace, the gain to each individual artist is likely to be miniscule Ad”
    This not only makes no sense, but is also empirically false. Since the launch of TuneCore there were over 200 million songs bought via paid download or streams generating over $120 million dollars for TuneCore customers. And these are the artists that were previously not allowed “in” – this means previously they earned nothing.
    And as you pointed out, these sales are probably a proxy for other income being generated not counted.
    Not every artist is going to make millions, but there are tens of thousands that now make significant income that previously made nothing.
    YOU STATE:
    “The truth of the matter is that at present the music business is in a dump. ”
    Absolutely not, the music industry is exploding with new income steams, more people listening to it, more music selling by more artists, more music being created, more artists getting famous and more. The old music industry of getting signed to a label, transferring your rights to that label and generating money from selling an album is in “the dumps”.
    The “new” music companies are exploding – Apple, Google (guess what gets searched for a lot), Amazon, ASCAP, BMI, SoundExchange, YouTube, MySpace and on and on. The problem is you are focusing on what was – four “major labels” – as indicators of the music industry. Although they are still relevant, they are no longer the sole entities.
    And finally, I am getting sick and tired of people suggesting TuneCore is presenting “this position” to acquire customers.
    The truth is the truth, and whether TuneCore exists technology has changed the world. I feverently believe there should no longer be a gatekeeper deciding who gets “in”, everyone should have access. I also believe no artist should give up rights or revenue from the sale of their music in the digital world.
    And to suggest that artists that are succeeding, and selling, and getting famous and are able to pursue their dream are part of some inaccurate facade of a corporate agenda is not only wrong, but it does a huge disservice to them by suggesting they don’t count.
    I can understand your perspective and cynicism, but not everyone is willing to misrepresent the truth to make a buck.
    The artist is not the enemy and should not be treated as one.

  • Dave d.

    Exactly. The numbers cited in the soundscan data are only units sold. If you look at the soundscan data for revenue over the same period, you’ll get a much clearer picture. Although the total units sold is going up (thanks to one digital download being one unit), the revenue tanked from $10.8 billion in 2006 to $6.6 billion in 2009. The slope of this decline correlates closely with the decline of the sales of physical sales.

  • Dave d.

    OK, I read Jeff’s video response and then went back and re-read the entire article. I think it might have been better if Jeff’s article acknowledged the SoundScan revenue figures for the same period to provide clearer context and to help us understand what it means.
    Thanks for the video reply Jeff, and for the service and education you provide.

  • Dave d.

    Owen, I like to look at it differently – the artist doesn’t have to do it all themselves, and signing with a label is not the only alternative.
    Look at it this way. Just like there are great artists out there who need a break, there are great marketeers, engineers, photographers, graphic designers, web designers, producers, etc. … who also need a break. Build a team of like minded people who have shared goals and complementary skills and great things can happen. It takes a village.

  • Hephaestus

    “This is all smoke and mirrors-After being in the music business for over 30 years I have never seen revenue decrease like this ever.”
    What you mean to say is you have been with the “record labels” for 30 years. The recording industry is far more than just the record labels. The record labels had three monopolies that made them the only game in town their catalogs, distribution, and promotion. The internet has removed the monopoly of distribution. Slowly the promotion piece is being worked out. With artists being able to reclaim their copyrighted material, the last of the monopolies will be removed and the labels will fail.
    “Talk to any “professional musician,engineer,producer,and see if they are making more money than ever off of their music”
    You fail to see what is happening with this side of the business. In the past access to a recording studio would cost hundreds of dollars an hour. Now anyone with a personal computer, a $400 USD microphone, and some free sound editting software can produce professional quality albums. Like new digital cameras have affected the photography industry, these new technologies are affecting your industry.
    All in all you have been made obsolete …

  • Hephaestus

    “Your figures are bogus. You’re comparing album sales with individual track sales.”
    I agree but, the market has changed from albums to singles, there really is no way to do a comparison with out charting singles and albums for the same quarterly or yearly time periods. One problem is the lack of data. The points of sale have changed and sales are just not being tracked or are being tracked using different methodologies.

  • Hephaestus

    Kellee
    “Artists don’t need to learn marketing, they need to partner with someone that does.”
    IMHO, Marketing-promotion is the final piece of the puzzle. Once figured out the record labels have nothing left to offer the artist.
    If you don’t already you should stop by and comment at techdirt.com blog.

  • http://harrybroker.net/crystalclear/ aquablauw

    Would you believe, what I just read? What I always wanted for the last 20 plus years. That the major label power control is finally over, including the music publishing King Pins of ASCAP, BMI and SESAC, is almost over.
    http://www.prlog.org/11177526-crystal-clear-records-usa-the-netherlands.html
    Would you guys believe, thanks to the computer age, mp3’s and all that goodies, I finally started my own record company, worldwide! Never dreamed of it, always wanted to send my music cassettes/CD’s in the, so called, major record companies, were I paid for each time I run to the USPS, to send out by expensive overnight mail, just to have it dumped in their trash cans. All that is over, thanks to Itunes, Amazon and all that great stuff, I am finally my own Boss, A&R and President of my own company. I o.k. my own material, plus signed up a Rock Group out of the Republic Of China. Just Google Search, aquablauw, and you guys see me all over the world. Never could have dreamed about it, that it could happen to me. No Physical CD’s needed anymore to distribute, promote and beg radio stations to play it? Thanks to the Digital World of Music online. Wanted to share with you guys how wonderful it is. Thanks TuneCore, for allowing us unknown 3rd rank artists to take up front seats to see the major labels fall apart! It is really time……

  • Carumbo

    “Now anyone with a personal computer, a $400 USD microphone, and some free sound editting software can produce professional quality albums”
    “Anyone”? Professional recording studios are a lot more about talented ears, good acoustics, quiet air-conditioning, and real estate than any computer software or microphone. The differences are not subtle and always audible.

  • W

    stop lying to people to try and make yourself money

  • mvmn

    “There are no platinum artists”
    That’s because there are more artists than ever. If you’d kill every musician on earth except for one, and leave the poor humanity to buying only his records, he’d get “platinum”-shmatinum, but would that be a good thing for music? Well, maybe for music _business_…

  • Andrew Correa

    I am from Colombia, I think the music and other media has changed dramatically, The new media such as internet, software, videogames, etc.. have disturbed the way in which we see the things. thats so confusing in a way we get blocked. For example in Colombia I never heard about in a period of 3 months have artist as Iron Maiden, Metallica, Black sabbath. but in the last years they visited Colombia several times. returning to the prior talk I think a good way to enhance the ill is to adapt the Music to the new technologies, excuse my english is not so good.
    Andrew Correa

  • Dave
  • http://skforussia.ru adam

    Very impressive stuff. Thanks for sharing

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  • Emmett North Jr

    I agree with all understanding now with the down fall of the big record labels for years shutting out the little guys/gals getting a break and a piece of the pie for their efforts and dreams of getting their music heard,i’m also disappointed in the fall of physical cd sells,i learned the hard way,in 2003′ i pressed up $8,000 worth in cds and three or four months later it’s been mostly down load sells and hard to sell cds unless i’m touring and performing somewhere.Everything is slow cd sells,gigs and money is tight when now we have such an abundance of all the new independent internet music services catering to indenpent writers and artist,yes! I agree theres more services but less cash flow to use them,in away it’s sad but good,you just have to stay focused and keep following your heart and dreams sincerely & musically,Emmett North Jr.

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  • Sudhakar Narra

    This is very good inforamation thank you for sharing

  • G9rocks64

    Just skimmed over your blog, but I just finished reading an article by Kembrew McLeod that many artists – mostly newer but also some more established “B” list bands – make more actual money now than they did before.  As you stated, most artists on the big labels make a pittance of the price for CDs, and often even less for legitimate online sales.  But with newer “indie” lables, many of which are run by artists who were burned by big labels, the split of royalties is much better. 

    The ONLY downfall is that indie music is often not receiving exposure on radio, but with the internet, as the article explains, even music originally pirated finds that this venue for “exposure” to an audience is providing an increase in smaller band’s sales.

    The article – titled “MP3s are Killing Home Taping: The Rise of Internet Distribution and Its Challenge to the Major Label Music Monopoly” – also explains why profits are down for big labels, and it doesn’t have as much to do with sales as it does with the huge overhead costs of marketing to big radio stations and also the vast amount of money invested in the burueacractic structure of big labels, hence the layoffs.

  • Opus

    There are more bands than fans

  • @WHYYOUNGN
  • Nathalie Buzaglo

    The links to the 2006,2007 and 2008 reports are broken.
    Where can I find them?
    Also, are there reports for previous years out there?

    • tunecore

      Hi Nathalie,

      Unfortunately we can’t provide those links anymore as they appear to have been removed from the original site. Sorry for the inconvenience!