It's misleading to compare a single track download on iTunes with an entire album bought on CD. If you assume that a CD comes with about 10 songs, the iTunes payout is actually better than a Retail Album CD (low end royalty deal).
Of course we all know that record labels loved making users buy an entire album for one or two songs -- but that's their own fault.
The numbers they display for iTunes and Amazon are completely incorrect. Having listed albums on both through Tunecore, I can tell you you get closer to 70% of the sale price through Amazon or iTunes than 9% - and when we sell MP3s/albums on Bandcamp.com, we get 100% of the sale. Good riddance to the compact disc.
That said, they're pretty much on the money as far as Rhapsody, Spotify and the like are. It's amusing that these companies even bother reporting the pennies we "earn" through them.
Once again, musicians don't really earn anything on record sales. Theoretically they receive about 30% of the profit made on album sales but that's normally deducted by the record label as payments for the loan they have given them for recording their tracks, shooting the videos etc. so unless you're a very very famous musician it's unlikely that you'll ever pay back this "loan" or earn anything on record sales.
The two main sources of income for musicians are:
* Performing rights. They receive royalties for public performances of the works they composed. Which means not everyone in the band gets paid, only the ones who are registered as composers of that particular work. This is paid for public performances, e.g. radio and television broadcasts. If your work gets broadcasted (or played in chains such as McDonald's as background music) you can earn an awful lot of money.
* Live performances. Even for moderately well-known musicians, it's not unusual to get paid around $1500 per gig per person.
Why is there so much interest among web developers and entrepreneurs with the business of music?
I really can't figure out it.
Why are you all trying to "solve" an industry that you have no interaction with and seemingly know little about?
How many gigs do you go to a month? How many new albums do you listen to?
Where do bands in your city practice? Who does booking, and for what nights, at what clubs? Who are the promoters? Do you know any music publishers? Tour managers? Record labels? Recording studios?
Do you know any online and radio promotion companies? Do you know any band managers? Do you even know a single musician who makes more than $1000 a month from music?
Do you know where to get a tube amp repaired? Do you know anyone who does live sound? Do you know any good drummers with room for another project on their plate?
Should I go on, or is it painfully obvious that you are all commenting on things you can see very little of?
Why are you so compelled to enter in to the conversation at all?
There's a fairly diverse crowd of musicians and web developers. The two sets of people aren't entirely separate.
I probably go to 5 or so gigs per month. I can't tell you how many new albums I listen to per month. It varies considerably.
Usually, bands practice in any space they have available. A few have dedicated practice space; most practice in a garage of one of the members. Most booking is done by knowing someone who knows someone. A lot of shows are set up by some random band, and they find a few other bands that want to play. Very, very few bands actually get paid here to play shows. There are a handful of promoters. My organization (http://elpasoera.com) happens to be one of them. We've also helped organize a few tours. I can think of two recording studios I have connections at off the top of my head, Sonic Ranch being one of them. The other is the recording studio Jim Ward (of Sleepercar and Sparta) recently opened up.
We do all the web work for a somewhat successful musician. I'd imagine he, along with his band, makes well over $1000/month. Some people are making a fair bit of money. Most aren't. I find it's rude to ask.
I actually repair tube amps from time to time. I also know a guy that's been repairing them for 20+ years. I know people who do live sound professionally. I know drummers, but I'll admit, it is hard to find a decent drummer in this town.
So, no, not everyone here is commenting on things they know very little about. Some of us are actually deeply connected to the music industry and web development/entrepreneurial topics.
Um, I'm a musician and web developer, I do both professionally.
The web is a massive avenue for selling music, and is what most independent musicians use most frequently to promote themselves.
I couldn't agree less with what you're saying here. It's absolutely ESSENTIAL that web developers take an interest in the Music Industry, especially since so much of it has moved to the web.
'Why is there so much interest among web developers and entrepreneurs with the business of music?'/'Why are you so compelled to enter in to the conversation at all?'
You assume entirely too much. At the web development company I work with, at least 3/4 of our company are or were gigging musicians at some point, and go to shows, and could all likely rattle off answers to your questions. Our main product is an eCommerce system, so it's not like I'm working at CDbaby or something.
Programmers and musicians both do a lot of pattern recognition, and I've found a lot of crossover between the two.
The same type of people that destroyed this industry with p2p and bit torrent technology is trying to figure out how the creators can piece it together. I guess it's out of pity, schadenfreude, whatever, but don't pretend to be some oracle of the industry without acknowledging that hackers took that golden goose and strangled the hell out of it just because they could. That reality cruise sailed long ways back.
So the industry is essentially neutered and we're doing an autopsy. What's so upsetting?
The Moderators have the ability to change links in a submission.. So when blogspam like this is posted - it can be changed to the original source. (Get confusing for those of us late to the party though)
Hmmm... and why wasn't the "pay a gig in front of x number of people each who pay $5" included as how I understand things, that's how most artists make their money.
What of music that is impractically hard to perform live?
The Beatles' decision to become a studio-only band (that eventually churned out the Sgt. Peppers album) would have earned them a rather paltry amount of money for their efforts today by your model (well, ok, to be fair, maybe not -- Sgt. Peppers went on to become a platinum certified album, they would have made a sizable income by your model, but what of bands of lesser prominence?)
And further yet, how would you deal with someone like me -- I have zero interest in ever attending a live concert. But I do enjoy listening to music casually all the time on my computer.
As a fan of Nine Inch Nails, I'm often surprised at how well they pull off translating the least performance-friendly music into a five-person show. In a way, the best example is the track "Starfuckers" from The Fragile, which on the album, is a very studio'd/produced track, but when they play it live, they do it without any backing tracks, and it kind of destroys.
Having grown up on Warp Records, Nine Inch Nails, and Nintendo music, I've actually come to really appreciate a good live performance. I've seen the unlikeliest of artists doing live shows, and I've also gone to dozens of festivals which turned me on to music that I'd never appreciate if not for having seen the groups that played the music live.
Aside from that - it's too bad you have zero interest in ever attending a live concert. To me, that's like saying you have zero interest in tasting delicious food, or zero interest in having sex. You've got at least five senses, and only so long to live - make the most of what you have!
More to the point: would The Beatles ever have bothered to make Sgt Peppers given its preclusive relationship with live performance (which in this 'model' would be how they made most of their money)?
(incidentally, I too have zero interest in attending concerts for most types of music I listen to. I'm not interested in buying T-shirts either)
As a musician with a startup in this space, so I know first had these numbers are skewed.
First, a musician's online product isn't just their music -- merch sales like t-shirts make up a big part of their revenue stream. For our members it is 70/30 split in terms of music/merch, but the profitability of merch is a lot higher. And as others have mentioned, royalties are not in the picture.
Second, the data seems to favor CDbaby. I guess it was easier to just look at one source, but these days there are a lot more compelling options for musicians that have no fees (through sites like Bandcamp). Even the physical CD pricing with CDbaby is incorrect -- on a physical disc an artist selling an album for $10 would only make $4 with CDbaby, not $7.50.
> The sort of artist who survives at the long tail is the sort who would be happy doing nothing else, who willingly sacrifices security and comfort for the chance to communicate something meaningful, hoping to catch the attention of those few in the world who seek what they also find meaningful. It’s a somewhat solitary existence, a bit like a lighthouse keeper throwing a beam out into the darkness, in faith that this action might help someone unseen.
How much would a musician pay to advertise their song to 4 million interested listeners? Negative 0.000017 cents sounds like a pretty good price -- better than Adwords anyway.
Care to provide some evidence that it is being done, ie. that artists are happy with the payment arrangement negotiated on their behalf with Spotify et al on the basis that it constitutes cheap advertising?
Of course we all know that record labels loved making users buy an entire album for one or two songs -- but that's their own fault.