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July 06, 2007

Fact for the Day -- Music-Biz Income

Michael Blowhard writes:

Dear Blowhards --

A mere seven years ago, musicians derived 2/3 of their income from pre-recorded music, with the rest of their money coming from touring, merchandise, and endorsements. Today, according to The Economist, those proportions have completely reversed. Musicians now receive the majority of their income from touring, merchandise, etc., while recordings largely function as marketing tools for T-shirts and concert tickets.

Writes The Economist:

The logical conclusion is for artists to give away their music as a promotional tool. Some are doing just that. This week Prince announced that his new album, "Planet Earth," will be given away in Britain for free with the Mail on Sunday, a national newspaper, on July 15th. (For years Prince has made far more money from live performances than from album sales; he was the industry's top earner in 2004.)




posted by Michael at July 6, 2007


Well, with free downloads, how long it could take? If ya can't beat 'em, join 'em. The Beatles couldn't have quit touring in 1966 and kept making millions selling albums in today's market, huh? (And notoriously stage-frightened singers, like Carly Simon, would have had to just get over it, huh?). Although I think touring has always boosted album sales. Musicians are back to being travelling minstrels, albeit highly paid and perked ones. Who woulda guessed that Prince was the highest earning musician as recently as 2004? Record label execs must be throwing up. However, this might mean their stranglehold on who gets recorded and who doesn't, etc., is going gradually out the window.

Posted by: annette on July 6, 2007 2:12 PM

But, this also shows how dire is the state of new music these days. People aren't paying to hear Prince play his new stuff, they are paying to hear him play "Purple Rain."

Posted by: Steve Sailer on July 6, 2007 2:43 PM

In the beginning, God created the Grateful Dead and God said, "Let your concerts be taped." And so the Grateful Dead opened certain sections of seating for Deadheads' recording devices, and lo and behold, the tapes increased and multiplied, and more and more people came to love the Grateful Dead, and more and more people attended shows and bought merchandise, and God looked upon this giving away of their music,
and said, "It is good."

Posted by: raymond pert on July 6, 2007 3:02 PM

Remember that much early recording of popular music was looked on as advertising for the sheet music, which is where the real profits were made.

Posted by: dearieme on July 6, 2007 3:48 PM

But, this also shows how dire is the state of new music these days. People aren't paying to hear Prince play his new stuff, they are paying to hear him play "Purple Rain."

That's a bit of old-fogeyism. All dinosaur acts play their old hits because their audience is comprised of dinosaurs looking to hear some songs from their youth. Prince was one of the biggest selling acts on the planet in the 80s, so why wouldn't his concerts rake in the bucks? His recent financial success has nothing to do with the lack of quality in today's music.

However, there is something more interesting going on in that there aren't really any new acts that can sell out stadiums. I don't believe this is due to the quality of the music, but due to the extreme fragmentation of the music marketplace, which is something fairly new. With so many sub-genres and sub-cultures, it's basically impossible for a new act to reach the mass audiences that big acts in the past could reach.

Downloadable music is both a cause and a symptom of this fragmentation. Suddenly, people are able to record and distribute their music worldwide without the need of a big label, and the listeners are responding to this by listening to exactly what they want from a wide variety of choices not dictated to them by record executives. I look at this as a positive thing.

Posted by: the patriarch on July 6, 2007 4:17 PM

Yes, there isn't anyone comparable to Elvis or the Beatles or Sinatra around today, and as the Patriarch points out, this may be a good thing. There wasn't really anything "normal" about the 1920's - 1970's "monoculture" - it was more of an artefact of technology than anything else. We'll see what the "multiculture" serves up in the next few years. Personally, I think that music has gone downhill since I was in my twenties, but then again, so did my Dad (1914 - 1988)...

Posted by: tschafer on July 6, 2007 5:07 PM

What an astonishing turn of events. I'm just an old fogey, and the incredible pace of change has become something between stupifying and terrifying.

And the future looks even worse... or better... depending on your point of view. Ray Kurzweil predicts that computers will take over just about all human work by 2020. I can see clearly that programming is going to go the way of the hand printing press.

I guess it might be better in the long run that record companies don't control music. Lord knows, that was as close to a criminal enterprise as you could get.

But, all I can say about this post is that the world that I used to know is disappearing, and it is disappearing so fast that I really don't know how to respond.

The pace of technological and culture change will only increase in the future. I think that humans are about to undergo the most complete assault on everything that forms their identity since the Industrial Revolution. It will be equally bad and good. The good part is almost universal freedom and material wealth. And that's the bad part, too, now that I think of it.

Posted by: Shouting Thomas on July 6, 2007 6:28 PM

The internet has been a godsend for the independent musician. I personally know at least two individuals who have gotten into the six figure income range and are quite delighted with their business model of internet downloads and live performances. During a performance several years ago I heard Otmar Liebert urging the audience to go to his website to download whatever was available there. Naturally his entire line of CDs was available out front. He figured out how to get rid of the suits...and so are thousands of other musicians.

Posted by: Charlton Griffin on July 6, 2007 6:58 PM

Might be worth noting that Prince got 1 million from the newspaper for that giveaway. It's arguable, but given marketing costs and the standard record industry splits, he's making more money out of that than if he had sold 500,000 copies (which would be very good sales for Prince in the UK).

Posted by: Tim Worstall on July 7, 2007 4:15 AM

annette says "Musicians are back to being travelling minstrels, albeit highly paid and perked ones."

Perhaps there are a handful like Prince, the Stones or Faith Hill who are "highly paid and perked" but this does not include the hundreds of thousands of acts that keep bills paid with day jobs and earn barely enough from their music to cover the costs of getting to and from the gigs. As in most artistic endeavors there are a tiny handful of super stars with lavish lifestyles and compensation but huge numbers who continue to make art despite the lack of fiscal rewards ... regardless of whether those rewards come from recordings, performances or t-shirt sales.

patriarch says "there aren't really any new acts that can sell out stadiums"

John Meyer, Dave Matthews, Trey Anastasio, Green Day, etc. would seem to belie this. Although one factor may be that more and more fans and bands are realizing that stadium shows are not the ideal setting for either making or listening to music. In the days of the dinosaurs (Jefferson Airplane, Cream et al) most major venues were in the 5000 range, not 50,000 and up.

Posted by: chris White on July 7, 2007 2:34 PM

Chris White--I guess I should have said star musicians, which is what MBlowhard's original post was about. It's the stars who are making more from touring than recording---the journeyman musicians never did. There have always been hundreds of thousands of workaday musicians who weren't getting rich---that's not new. I hardly need a lecture on the people who do it "for the love of art." MBlowhard was talking about what had changed.

Posted by: annette on July 9, 2007 9:41 AM

Chris, those acts sell out indoor arenas, like between 15 and 25 thousand seats, which is quite an accomplishment, but it's not the same as selling out the Oakland Stadium, which the Police just did. U2 is the closest thing to a contemporary act that can do that, and they've been around for over 20 years.

Posted by: the patriarch on July 9, 2007 10:14 AM

Hmmm, Annette, Michael BH's original post did not specify stars as opposed to "journeymen" musicians. I thought his observation was more about the way the new electronic media (specifically downloadable music files) have altered the economics for musicians who once sold LPs, then CDs, as their primary income source. This phenomena impacts stars and journeymen alike.

Interestingly enough, there is an argument to be made that a musician today can leverage You Tube, MySpace, the iStore and similar means to get themselves and their music out to the public without needing the marketing and distribution clout that the major labels once supplied. A recent Billboard article documented a 17 year old from the Netherlands whose You Tube clips of herself singing various cover material were done with a web cam and a karaoke machine and got such great response that she's being courted by Sony and other majors. She's not sure whether she sees any advantage to signing with a major given how well she's doing on her own.

patriarch - I think the point I was trying to make is that over the arc of forty years the scale of top venues grew and grew. Back in the day the Fillmores (East & West) along with similar sized concert halls were the "big gigs" then it moved to those 15-25,000 seat stadiums and finally on to the huge stadiums The quality of the huge stadium experience ... from both the audience's and the musicians' standpoint ... not to mention all of the financial and logistical issues, is today deemed less than optimal. The move among younger crowds and bands has been toward the Bonnaroo/Phish Phests model rather than stadium shows as the Big Gig. I don't think it is as much about CAN certain newer acts sell big stadium shows as much as do they WANT to do so.

Posted by: Chris White on July 9, 2007 3:44 PM

Personally I think pop music is much better - and teenagers much cooler - than when I was a kid in the godforsaken 'nineties. There's some genuinely new stuff going on.

We've always had garage rockers like The Black Lips and The Deadly Snakes, and Brit poppers like Boy Least Likely To and Lily Allen. (Though there's a new attitude behind the style, I think.)

But is there any precedent for unclassifiable Canadians like Rock Plaza Central and Sarah Mangle?

For anti-folkers like Herman Dune and Joanna Newsom?

For DIY one-man acts like Loney, Dear and Beirut, which were in fact technologically impossible until very recently? (The lead singers of both "groups" recorded their debut albums in their bedrooms, playing all parts themselves and combining them on their computers.)

And check out the instrumentation and variety of styles in those clips: trumpets, harps; everything from bass clarinets to the goddamned banjolele for chrissakes. To my mind that's a lot better than it was back when everyone was trying to sound like Eddie Vedder, or that worst of all possible musics, the boyband.

Of course these acts don't sell big, but then neither do microbrews.

Meanwhile old-timers like Cake and Beck - not to mention Dylan - are still at it and going strong. And with sites like Myspace, Hype Machine, Sonic X, iTunes, and the hundreds of mp3 blogs out there, it's easier to find good new work than ever before.

Could this be a golden age?

(Admittedly there's a dark side. Sometimes all these elements - whimsy, band instruments, cult-like devotion - combine into a synthesis which is, perhaps, just a little bit terrifying. To wit, I give you Polyphonic Spree.)

The only reason I can think of why current music isn't more bruited about is our boomer-run media, which only resonates with art that embodies the 'sixties trifecta of Relevance, Commitment, and Angst, 'cuz otherwise it just ain't "serious" - whatever the hell that means. They only ever mention Bono.

Posted by: Brian on July 9, 2007 4:07 PM

That's probably true, Chris, although I think young people have always thought stadium gigs sucked. I know we did in the 80s.

The Bonnaroo example is a festival experience, with many bands drawing from a number of audiences. I don't think one act could pull the same numbers. Same with Phish. They drew 100,000 for their last show in one place. They could never, even at the height of their popularity, have sold out outdoor stadiums across the country, a la the Stones, the Police or U2.

Posted by: the patriarch on July 9, 2007 4:07 PM

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