Wednesday, December 07, 2011

Buy CDs: part 1 - the so-called business

Here's a little series about some things relating to the retail end of the music business, from the artist's perspective. First, a snapshot of the terrain- this is a little graphic from Information is Beautiful, which illustrates how many units- CDs, album downloads, mp3 downloads, streams- a musician has to sell per month to earn the equivalent of a full time minimum wage job- say, an entry-level position at Jack In The Box:

Keep in mind that even the "high end royalty deal" retail CD purchase (the sort of deal you can negotiate if you're Bono) is really egregious, and you don't expect to make your real money from album sales. By the level of the Amazon/iTunes track downloads, you're into the low end of migrant farmer level of renumeration, making per sale just over 1% of what you would for a CD.

With the streaming services, you are no longer dealing with a functional music business as far as content creation is concerned. These companies are strip mining operations, and the musicians are planet Earth. In the physical universe we inhabit, there are not enough people or hours in the day for all of the professional artists on Spotify to make a living wage. There one million sales will net you $290. I would really rather people stole the music by illegally downloading it than contribute to the success of a business based on that kind of slash-and-burn exploitation.

The retail music business has always been extremely unbalanced, with major labels offering artists egregiously unfavorable deals, and then using creative accounting to shave away as much of what's left of the artist's share as possible- now this dynamic has gone supernova, and can apply to independent artists as well- who get in return none of the benefits of being on a major.

One of the conclusions we can draw from all of this is that you just generally have to move a lot of product to make a living from the sales of recorded music. Even to make the starvation wages in the illustration- about $14,000/year- you would have to sell a very brisk (for most independent musicians) 1716 CDs every year at the "self-pressed CD" level.

At the other end of the spectrum, you would have to get 48,637,320 plays per year on Spotify to make your $14k. For perspective, Lady Gaga's recent hit "Poker Face" got 1,000,000 plays in five months, for which she earned a royalty of $167.

For a much more in-depth (and eloquent) discussion of this subject, read the post that inspired the graphic at the Cynical Musician.

1 comment:

Corey Gilmore said...

The subscription model is still in an interesting state. The way it works is that it isn't necessarily a pay per stream system—they don't pay Gaga based on how many times her songs are played. Companies like Spotify make agreements with labels to make payouts based on percentages of SUBSCRIPTIONS. Spotify gives this to the labels who then distribute it however their agreement with the artist states. So, it's the labels that pay per stream to the artists, which is a percentage of subscriptions, not streams. Theoretically, as their subscription numbers increase, so will the amounts paid to labels and thus to artists…

… theoretically. ;)

btw, I REALLY enjoy reading your blog!