That's not the phenomenon I'm talking about: I'm talking about separation of classes. The wealthy musicians like Bono, Pharrell, and Lady Gaga are raking in millions of dollars every year, but their careers cost millions to maintain. The noob musicians or "small time" acts of the Internet and small cities have never made much money, so they're not really missing much, and neither are consumers - these are the artists that aren't very good anyway. But what about everyone else? What about the guys in the middle that are making okay money, maybe they're even doing music full time. These guys might be regional acts or even just the "busy locals" that play a good amount of gigs, have talent, and are right on the line of "doing okay" and "can't pay my bills." What is happening to them?
Unfortunately, the ladder of success that these musicians are climbing is slowly turning into a slide...backwards. They are being pushed out of the industry by the hard truths of our music economy. What are these truths? If you're not familiar with what's actually going on in the world of music, allow me to educate you.
1. Streaming is rapidly overtaking album sales, and most streaming services pay $0.008 per stream or less. Yes, that's correct, 8/10ths of a penny per play or less. For some perspective, 1 million plays would make an average 5 piece band just $1400 per person (before tax, of course). That's not enough to cover most people's bills for a month, let alone a touring band's expenses.
2. Many venues are caring less about live bands because it doesn't get as many bodies at the bar. Many want DJs because they can pack the house playing the commercial musicians' music instead. (I will hereafter refer to DJs as "organ grinders.") Even the venues that DO want live bands are hardly paying at all. Can't tell you how many gigs I've played for free. I had to stop eventually.
3. Many venues want covers because they want people to know the songs so that they can stick around. Covers do not advance the industry, original music does. The venue owners often think, "Those organ grinders play songs people know...and they work for less. Let's hire them instead." This one really gets me frustrated.
4. The musicians that are making money are working so many hours and playing so many gigs, they don't even have time to work on original music, record new material, promote their own endeavors, or focus on growing as an artist and as a person. All they do is dance for peanuts to survive. Many of them have day jobs.
5. There are so many "musicians" now, the demand and perceived value is weakened. Anyone can pick up s guitar and make a YouTube video. As I've mentioned in other posts, the Average Joe often can't tell a difference between mediocre and terrible musicians. Sometimes they can't tell the difference between good and bad musicians. And since the entry fee into the public eye is now NOTHING, the value of a hard working-man musician is lumped in with the other YouTube Schmos that uploaded a video of them epically failing trying to cover "Wonderwall." (I'll give you a hint- it's an incredibly easy song...) They both have the same outlets, the same places to market, the same digital distributors, and the same CD duplicators, so to the public, the Perceived value of the Joe schmo and the good working-man is smeared into being identical. It isn't.
6. Big acts aren't making money from records either, which forces concert ticket prices up, or at least increases their frequency, which consequently shifts local venue concert prices down. Nobody wants to pay $20 to see a local band. The venue owners have to keep the bulk of the money to keep the doors open. They're running a business too, they gotta do what they gotta do, and we need them around! The bands can't draw a big enough crowd (see #5) and they can't pay bills with $20 a person. They often just go get food, fill up the van, and call it... "A success?"
7. Labels are short on money as well, and have been ever since digital pirating was a more prominent thing. Budgets are getting lower, which means artists aren't cultivated, and albums are made like a patchwork quilt of cheap fabrics. So They sign "360 deals" with their artists so that they can take a portion of basically any income they make from music. They focus on regurgitating music that sounds identical to what sold a little last week, rather than what people really want. When's the last time you turned on pop radio and said "that song was great?" Maybe once in your car this month. Maybe once this year? Maybe once in the last few years? They aren't taking risks on the underground kids with energy - the 19 year old kids in their garages - the Nirvanas and the U2s, the Pixies' and the Wilcos and Foo Fighters' and the Shins back when they were high-school dropout twenty-something fast-food-chain-working nobodies. And most of those now WIDELY popular bands got that way because of labels taking that risk on them. It takes a lot of money to make a band that widely known. No no, that doesn't happen often anymore. They can't take the risk. They know that half-naked jail-bait ass is what makes them money, guaranteed, so they go for it. Even though, if they took a chance on the garage bands, they may end up to be historical later down the road. They may develop huge followings and become the next Dave Matthews or Foo Fighters or U2.
8. There are only three major labels. Sony, Universal, and Warner. They control somewhere between 70-90% of the music industry in the United States and somewhere between 60-80% of the music worldwide. These 3 Huge corporations own or have acquired hundreds of smaller labels over the last 30 years. If bands are not on one of these three labels, or on a label owned and operated under their umbrellas, they fall into two categories: independent artists, or artists signed to independent labels. Listen, not all labels are evil or corrupt, but at some point in the chain, there is a corporation that owns your music. You don't own it. They own it, and they make way more than you will ever dream to make... Because you let them.
9. Most of the major labels now are shareholders in the streaming markets. Which means when they technically make money from all artists, even the ones they don't do anything for, and they have control over who gets paid what. So they say "alright let's give St. Vincent 15% of her streaming royalties." That $0.008 just dropped to $0.0012. They hold way too much power. Ever wonder why labels aren't doing anything about streaming? The average wage for musicians is declining further and further, meanwhile Daniel Ek (CEO of Spotify) pulls in $120M a year. By contrast, Stephen Cooper, The CEO of Warner Music Group makes $2.7M a year. So the labels are desperately trying to jump on the train of steaming because it makes "them" money, not because it makes artists money. Because it doesn't make artists money, unless they're a huge established artist like Jay Z. But that does no good for the next generation.
10. The bigger a company gets, the more money it takes to run that company. Think about how huge those three labels are. Imagine someone walked in, bought the place, and said "I run the industry now and you need to drop all of these lame artists and sign these amazing indie artists." The brainwashed consumers wouldn't adjust well, and since they don't understand music, they haven't been taught its importance, they don't get it. Why is it good? Where's the beat? I can't dance to this. Spotify wouldn't be cutting them deals to get their albums or to pay them more than the average person. The bands aren't quite popular enough to play big tours, and they certainly aren't selling records (thanks to streaming and prior to that, pirating), so they can't pay back their advances, which means the label has lost money. Do that enough times, and the label fails. So some bigwig swoops in and buys it back, and only signs the simple mindless stuff that will play on pop radio and in the background of Kia commercials and the trailers of B- Romantic comedies. There's no winning with the system they've created. It's designed to push mindless music. It's designed to fail, over and over again. Good, creative, thoughtful music rarely bodes well on the Top 40 charts.
11. A lot of laymen think that artists are just whining about the industry - that it's the uber rich artists complaining "oh no, I only made $50M this year!" But in fact, they don't care nearly as much as the indie artists do. They make most of their money from their 20 other avenues - gigs, clothing, perfume and cologne, advertisements, endorsements, etc etc. but the indie guys-- the real diamonds in the rough, take no prisoners, nitty gritty songwriters making amazing music on their own dime - they're the ones getting shoved out of the industry by this. They're the ones who were barely surviving on their less than minimum wage musicians salary, and now it's even less than that. Don't believe me? In denial about what artists actually make?
12. Average minimum wage in the US is $8.25 for workers with no health insurance. Let's ignore the thousands of hours it takes to write, arrange, and record a song, and let's ignore the hundreds to thousands of dollars it can cost to have it recorded, mixed, and mastered. Ignore all of those hours. Let's look only at the time it takes for the song to be streamed - the "performance" of that song. If somebody streams a song that is (on average) 4 minutes long, that means the band is getting paid $0.10 per hour when streaming their music. A dime per hour, folks. To make an average day's wage for one minimum wage worker, a song would have to be streamed 660 times. For the equivalent of one day's work as a Walmart door greeter or a McDonalds burger flipper. That would mean 3,300 streams every day for each band member to make minimum wage. Let that sink in.
And the worst part? The artist makes even less than that if they're on a label. So forget those dreams of signing to a label to make the big bucks... Because you actually can make more as an independent artist. A dime per hour is slave labor. Slave labor to whom? The streaming companies! Who make MILLIONS OFF OF YOU. They use YOUR MUSIC to entice advertisers to pay them millions to advertise Coca Cola and Taco Bell to YOUR FANS and then they POCKET THE MONEY.
If the artist sold a CD (industry average of 50 minutes of music and average $7 profit per $10 CD), they'd be making... You guessed it: $8.40 per hour of music - just over minimum wage.
These truths are hard to talk about. But there they are. How many apply to you? Did you have any idea? Have you done the math for yourself? Are you a consumer kept in the dark, or a musician crying in the corner? Can you handle the truth? It sucks, that's for sure.
Remember before when I mentioned how a five piece band would only walk away with $1400 per person after a million streams? If they actually sold a million digital downloads (a system that actually works and people enjoyed) they'd make $140,000 per person. That is no small difference. These guys that used to survive on "mailbox money" as we call it from royalties and record sales are no longer making what they used to make. Not even close. If these musicians want to continue their careers with the same quality of workmanship, quality, and consistency, they need money. They need money for instruments, tour busses, roadies, gas, cartage, insurance, hotels, rentals, live sound engineers, recording costs, album pressing costs, promotional costs, Merch costs... Do I really need to go on? Oh yeah, and FOOD, CLOTHING, and BILLS.
If you expect to see your favorite indie bands continue down this path, you may be mistaken. Labels aren't looking at them nearly as adoringly. They think rock music is dead, and they aren't looking to fund it. Streaming services don't care about music being furthered - they're in it to make money, and they have found odd loopholes to make themselves millions.
Let's be honest - we don't desperstely need help with "promotion" or "exposure" anymore. We all have the same Internet. We have an uncountable number avenues on which we can promote, so the idea that Spotify or any of these other streaming networks are getting you exposure is weak at best. Sure, you can find new artists, but you can do that on YouTube too, or any social media site. You can just ask your Facebook friends via status update for suggestions and you'll get hundreds. Most of us find new music from our friends, not from these services. All it takes is your friend saying "hey have you heard the new album from..." And you go look it up. The problem is that people are becoming apathetic - since everyone's music is now on the same plane value wise-- from the crappy YouTube artist all the way up to Springsteen-- people are overrun with music and they're tired of hearing about your band.
But streaming is likely here to stay. So this raises another big question: who deserves to get paid in music? Does everyone? Only the talented people? Who decides if they're talented or not?
To me, anyone that is good at what they do, anyone that is doing a job or service that requires skill, or providing a product that took time and energy to create deserves to be paid for it. What I don't understand is, I'm an independent artist with no label affiliation, yet Spotify and other streaming and digital distribution outlets define the price of my music. When they do that, they're defining my music's worth, which isn't right. If I'm truly independent, I should get to decide that, right?
It's almost as if someone thought "oh, if we make all songs cost $1, or all songs pay the same for streaming, the indie artists will be on the same plane as the majors, and we will be heroes!"
No. You just devalued everybody. When I was a kid, I once stood in line for an hour to buy an $20 Smash Mouth CD on its release date. Smash Mouth, guys.
I paid almost $2 per song in the nineties, and yet even though $2 in 90s is actually worth about $2.92 today (due to inflation), music is now worth less than it has been in the history of the industry. Did you know that an Early 1900s gramaphone recording (4 minutes of music) would cost consumers about $0.50 each? That's almost $14 in today's money... For one song. Yet I don't even make a penny for one play, or a dollar for one purchase. Yes it was new back then, but come on...a penny is nearly worthless today. You'd make more money playing a song on the side of the road, literally. You'd probably get a buck, or even a quarter. Heck - someone can toss you a quarter for singing a song on the side of the road and you've just made 35 times what you make from a streamed song. Think about that for a second. It has become a dangerous war between the continually lowering costs of technology and the intrinsic worth of music.
I've used this analogy before: do you know how much the Mona Lisa is worth? Some experts say it is worth over $1B. Now if I were to email you a JPEG of the Mona Lisa, even a super high resolution version... How much is that worth? You got it-- zero. When you put something in the digital domain, it's worth almost automatically drops to zero because it can be shared effortlessly, cheaply, and it can be abused by the market.
These markets define the worth of your art for you, and that is ruining the industry, in so many ways. It's not just monetarily, it's psychosocially. Consumers have almost no choice to perceive art as worthless... Because it costs nothing. And the worst part is...it's absolutely amazing for consumers. They've tastes the forbidden fruit. They've found the Holy Grail. Why would they ever pay for music again? Why would they pay $10 to see you play at a venue when they could watch YouTube for free? Why would they donate to your album fund on Kickstarter when they aren't even going to buy the album anyway? On that note, Why would they pay $10 for your album or even $1 for your song when they can listen to Spotify's 20 million songs for free.
That raises the more important question: How, then, can they possibly even value music? The answer is: they can't. Like it or not, our brains thrive on making value-based assumptions. Will this food give me more nutritional benefit or not? Will this movie be worth $15? Will this house be a good investment? Is this $1 item really going to be good quality? What about a free item? What about 20 million free "items?" The current system does not support a market of fans. It supports a market of people who mindlessly put on music in the background of their life.
Good Musicians deserve fair pay. Period. If they want to give their music away for free, they should be able to. If they want to charge $1 per stream, they should be able to. These companies are controlling art, folks. They're controlling how it reaches the world. You think you have a choice... But I can assure you, nobody prefers your bandcamp page to their Spotify playlists.
Music deserves our money if we ever expect it to have value. It's a fundamental principle of economics - if you have a huge supply, price does down. When there is a limited supply, price goes up. Similarly, when demand is high, price is driven up. When demand is low, price is driven down. The equilibrium is where these things meet - and that's what we have to find. Right now we are experiencing a very strange market over-correction. The floodgates have now opened completely, and nearly every "artist" on the planet can now be streamed instantly, for free. Just like that. So the market needs to adjust. How? It's seriously so very simple - pay artists more and greedy CEOs less. If artists were paid just $0.10 (just ten cents! a dime!) per PLAY, the theoretical band we talked about earlier would be making $20,000 a piece from a million plays, rather than $1400 a piece. That's still not a lot of dough [well below minimum wage still], but if they were good enough to get a million plays in a year--which trust me, is a lot of plays for an indie band--that's actually a decent supplemental income to gigging, Merch, etc. Most musicians would KILL to make that much from album sales, as sad as it is.
If artists were paid fairly, and it actually cost consumers to stream, I would likely get behind the streaming thing 100%. It's a brilliant way to listen to music, but it's an absolutely impossible way to sustain a market. Name one industry that has survived and thrived on "free." You can't, because there are none. You might as well start labeling musicians as "non profit organizations" to receive all the tax breaks.
The solution? Give back power to the artists. The music economy is literally a communist system at this point--everyone makes the same wage, except those with special ties to those in power. No one is special, no one is better or worse, everyone is marketed as "equals." When we are marketed as equals, the true definitions of talent, skill, and creativity get more blurred than they already are. As the fabulous David Ramirez put it, "and Every guitarist / thinks he's artist / when we hand out medals for carrying a tune."
Let music be a free market, but never free of charge. Give them a fair chance, not a fixed price. Let them choose their own music's worth. Give them hope. Their art has meaning. It's not yours to exploit, all you streaming companies out there. It's not yours to change and mutilate, or make "relevant," all you labels out there.
All music is not created equal, so stop treating it like it's supposed to be. Music has worth, so stop pretending it should be free.
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