Average Artist Income 1 Bajillion Dollars – Cure Cancer, Bring Peace To The Middle East And End World Hunger

By Jeff Price

In the words of President Obama,  ” … if we just make stuff up and pretend that facts are not facts, we are not going to be able to solve our problems if we get distracted by side shows and carnival barkers…”

This “average income” conversation is the strangest I think I have come across in quite some time.  We are sitting in the middle of a transformation of a sector and the conversation is about a silly useless statistic around dividing Lady Gaga’s income into other people’s bottom line?

Sorry to disappoint anyone, but the truth is just not that exciting, but here it is: some artists make a lot of money from the sale of their music, others make a moderate amount and many more make very little. This is just as it has always been (and will continue to be).  I’m not certain what the point is around this average income statistic – it would be the same as stating the average amount of money for a band on a major label is Lady Gaga + Eminem + Jay-Z’s income added into all the other bands and then divided. Huh?

(On a side note, artists signed to major labels typically did not make their money off the sale of their music but via other income streams.  Artists today can make revenue off of all income streams)

May we all agree that there will be fewer superstars than non-superstars and move on to the real story?  Despite the traditional music industry releasing less music now than at any point over the past 15 years there is actually more music being distributed, bought, sold, streamed, shared, discovered and generating revenue for more artists/songwriters than at any point in history.  Is it not more important or interesting that the gatekeepers are gone and that there are hundreds of thousands of artists who, for the first time, have: access to distribution, the opportunity to be discovered and are actually making at least some money off their art?

In addition, the revenue these artists are generating–no matter how little or much–is coming in from a variety of sources, some new and some old.

No, not everyone is a mega-superstar–to suggest as much is ridiculous (the major labels have a historical 98% failure rate). Yes, there are mega-superstars, but now also a larger strata of musicians and labels who are able to generate revenue, fame and notoriety through their craft and businesses.

Some of these artists will be signed to record labels, others will do it themselves, and some will have other types of deals.

Let’s not get distracted from the true changes and issues at hand by the side shows and carnival barkers who make up silly little numbers to be sensational in an attempt to drive web traffic .

(By the way, if you add up the ad dollars from the Huffington Post, TechCrunch and  all of AOL and Google’s blogs, and divide, you will end up with the average amount of ad dollar money a blog will generate.)

Adapting To The New Music Industry

They say one year on the Net is like five years in the “real world,” in regards to the music industry, one year sure feels like 15.

When we launched TuneCore half a decade ago (sounds more impressive than five years) we built a system to change the music industry and empower and serve artists.  Since then, the industry has changed and evolved: new stores have popped up, others have shut down; more music is being released, bought, streamed and shared as major labels downsize, release less music, consolidate, put themselves up for sale or get taken over by banks.  Music sales by unit are up another 1.5% in 2010 (around 1.6 billion units).  With the rumored forthcoming “cloud services from Google, Apple and Amazon and Spotify entering the US, the concept of over a trillion units being streamed or bought per year is no longer fantasy. Over the past 28 months alone, TuneCore Artists have sold over 300 million units generating over $150 million in gross music sales.  Most of these TuneCore Artists are also the songwriter, the publishing company, and the performer, earning them over $100 million more in additional revenue from each of these additional income streams (more on the six legal copyrights that drive the music business can be found here).


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Part 2: The Melting Iceberg Syndrome, The Music Business And The Change Under The Couch Cushions

By Jeff Price

On the other hand…perhaps, since the beginning of the music business, more artists are earning some money for the first time as opposed to a few earning less.

In the old school model, an artist got signed to a label.  The label would agree to pay the artist a negotiated royalty rate on each CD sold; usually around $1.40 to $1.70 per album. The label would then advance the artist band royalties from their “to-be-earned-in-the-future-CD-sales.”  The artist would  take this money (their own royalty money) and use most of it to record the album that the label would own and control.

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The Emergence of The New Music Industry – It's Global, Generates A Lot Of Money & Is Based On Six Copyrights

By Jeff Price

There have been six fundamental changes to the music industry that have revolutionized and transformed the business.  It is vital that artists are fully aware of these changes in order to make the most money and pursue their passion on their own terms.

These six changes are:

1)   Music fans now buy and listen to music from digital music stores and services.

2)   There is unlimited shelf space where everything can be in stock at no detriment to anything else.

3)   For no up front cost, there is unlimited inventory always available on demand as a perfect digital copy.

4)   With the launch of TuneCore, there is no gatekeeper to placing a song on Apple, Amazon’s etc store or hard drive.

5)   Distribution of a release is now global and not restricted to just one country.

6)   Artists can market directly to their fans.

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Arrested (Artist) Development

By Jeff Price

Sometime in the 90’s, “artist development” for rock and alternative bands, got turned on its head.  Gone were the days of a major label aspiring to propel an artist over many years to “rock legend” with multiple releases, tour dates, interviews and in-store appearances (Led Zep, Rolling Stones, Springsteen, The Byrds etc). Instead, new artists were given six weeks from the street date of their debut album to have a radio/MTV hit.  If the first single from the album failed, the artist would typically get dropped; their career effectively over before it even began.

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The State of The Music Industry and the Delegitimization of Artists: Pt. 6 – The Hills are Alive…

– a Six Part Series

by Jeff Price

Part VI: The Hills are Alive…

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

Now for the glass half full perspective. Music is special.  It speaks to us all.  We all want to hear a great song and share the ones we love with others.  We are fans of music and we value it.  We spend money and/or time hunting for and listening to music that moves us.

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