A Pointless Debate

Recently David Touve, an Assistant Professor of Business at Washing & Lee University posted a blog asking “Is a stream on Spotify (or any music service) really worth less than an iTune sale?”

His attempt to show that an iTune sale or a Spotify stream are basically worth the same, in terms of payment to the artist, is arrived at by fuzzy math that assumes a listener will play a song purchased from iTunes 250 times. (Where he gets this number is anyone's guess. A quick look at your iTunes app will show that most songs get played far less.) By prorating the cost of the song by 250 plays, he would have us believe that the price per play is $0.0028, which he believes compares favorably to the urban myth of Spotify's $0.0033 per stream payments.

The Takedown-Why the DMCA has failed

A few weeks ago I received an email from a friend letting me know that my music was being used on a website as background music. On the site there was no mention of my name, the titles of the song or my record company. My friend, being smart, figured that I would never have allowed my music to be used by the site, much less without any link back to me or my record label.

Since I had found other sites in the past using my music, or my writing, without my permission, I took this seriously. Sure enough, when I checked out the website in question, they had illegally embeded the song of mine. As I continued to poke around the site I discovered that they were using two additional songs of mine, all without permission, and the first song was used on two pages. So four cases of blatant copyright infringement.

Suddenly all of my work plans for that day came to a grinding halt as I now had to spend time searching online for who owned the website and who they used to host it. Then I had to start writing the email letter to notify the owner of the website that they were illegally using copyrighted material.

Coldplay sets a Digital Record without Streaming

-This post has been updated-

A few weeks ago Coldplay announced that it was not going to post its new album Mylo Xyloto on streaming sites like Spotify. To date they are one of the larger acts to publicly not allow their music to be streamed. At the time Coldplay's decision reportedly embarrassed their record label, EMI, who has a licensing deal with Spotify. But EMI may be singing a different tune now after Coldplay's new album Mylo Xyloto hit a "one week digital sales record" in the UK. According to a report by Digital Music News of the 208,343 units sold in the UK over 40%, or 83,000 were digital. U.S. sales figures from Soundscan are pending. In terms of percentage, digital album sales are still growing rapidly and Coldplay seems to be benefiting from this.

Digital Royalties at Risk

Sirius/XM is considering doing direct licensing deals with the labels. In plain terms this means that royalties would no longer be paid through SoundExchange, the government PRO that currently pays royalties for digital music. Last quarter they paid $88 million to artists and publishers.

Under direct licensing deals that money would instead go to the labels, who would then pay the artists. And we all know how good labels are at paying artists...

Pete Townshend's Lecture to the BBC

Pete Townshend was asked to give a lecture in honor of the legendary radio DJ John Peel. Townshend touched on a lot of topics, most of them about the world of music as it exists today. He had some very provocative things to say, such as calling iTunes a Vampire, thoughts about fans "sharing" music and that artist should be paid when people listen to their work. Payments to artists was a constant thread in his talk. He also gave a glimpse of the "Inner" Pete Townshend.

Here are some of the take-away quotes:

"Music publishing has always been a form of banking in many ways, but – in cooperation with record labels – active artists have always received from the music industry banking system more than banking. They’ve gotten: 1. editorial guidance; 2. financial support; 3. creative nurture; 4. manufacturing; 5. publishing; 6. marketing; 7. distribution; 8. payment of royalties – the banking.

Today, if we look solely at iTunes, we see a publishing model that offers only the last two items as a guarantee – distribution and banking – with some marketing thrown in sometimes at the whim of the folks at Apple."

He asks why iTunes, like records labels, can't provide some of the the "services to the artists whose work it bleeds like a digital vampire Northern Rock for its enormous commission?"

Peer2Peer Pressure: How to Support Your Favorite Indie Artist

10 Simple Steps to Support your Favorite Artists

When The Musical Disconnect first started I had several readers ask me to provide some suggestions about what they could do to support their favorite DIY or Indie musicians. Now that we have looked at some of the challenges facing artists in today's music environment, this might be a good time to look at what you can do to help. Most of these suggestions will seem pretty obvious, because they are. As with many things, the best answers to a problem are the most obvious.

The following suggestions are not complete by any means, but they touch on the most important things you can do as a music fan to help your favorite artists.

The Serpent's Fruit

I posted a link to a news article in the TMD ITN page but thought that it deserved a closer look. It’s not about music per se, but it is about digital distribution, which is definitely something that musicians have to deal with nowadays.

However, this time it is books that are in the news, specifically e-books and how they are priced.

A class action antitrust lawsuit has been filed in a US District Court by the Hagens Berman litigation group alleging that five major publishers conspired to raise the price of e-books and force Amazon to drop its $9.99 e-book pricing.¹

According to the lawsuit they didn’t act alone. They conspired with Apple, Inc.

Land of the Free?

I was working on another post when two music news items caught my eye. Both about the same thing. Labels who are removing themselves from the streaming service Spotify because the streaming payments are so small it makes it not worthwhile having their catalog available.

One of the reasons that streaming services, and new music gurus, give to justify low payments, are that the labels and artists, due to piracy, now have to complete with free. And we are talking payments below 1/3 of a penny or lower with streaming services.

It is interesting to note that the labels in question couldn’t be farther apart in musical style.

Share, But Not All Sharing is Alike

I have put off writing this post for a long time. While this is a difficult and touchy subject, it is also one which I am very passionate about. I believe that most people want to do the right thing when it comes to sharing music, and would not willingly do things that might cause harm to an artist whose music they enjoy. I know this to be true about my fans and the fans of my peers.

I have the best fans any artist could ask for. Some of them travel hundreds of miles just to see me perform. They help me set up for gigs, sell CDs at shows, carry my gear, pack up my gear, and share my music with their friends and family by buying copies of my CDs as gifts for them.

In today’s world, however, it is easy to spread the word about one’s favorite artist, yet hurt them at the same time. Not everyone realizes the consequences regarding some types of sharing, and if no one tells them which types help and which hurt, how would they know? That is what this post is about. That spreading the word and sharing is great, but how a listener shares is as important too.

Music has always been a social glue. Wherever and whenever people gather to celebrate or commemorate an event, there is music. You hear music at events like parties, weddings, funerals, graduations, as well as in social locations like restaurants, night clubs, bars, concert halls, and jams on the beach.

Music gives people a sense of “Identity”, and people want to turn their friends and family on to their music, both to share their love of it, as well as to say something about themselves and their tastes.

The Dinosaur is Dead, Long Live the Dinosaur

It seems like every time I read an article about music and the music industry the topics seem to have the same underlying current. Whether it is about streaming, the cloud, owning verses access or the financial viability of subscription models, the media is constantly buzzing about the death of buying music. Even downloading is now considered passé as we are told daily that nobody wants to buy music any longer. It is now all about access and the cloud is king. Of all music industry articles, 90% are about some kind of digital services, ¹ and most of these seem to be about the latest services that the big boys like Apple, Amazon, and Google are pushing. These companies hope to make a lot of money from these new services and the media seems content to regurgitate their press releases. The truth, it turns out, is that most people aren’t buying it...

The dirty little secret that none of the these stories rarely discuss is that is the dinosaur of buying music is not dead, it is still alive and we, the music buyers are the dinosaurs. Recent studies have shown that despite the deluge of promotions and media blitz regarding music streaming, access and cloud services, people are still buying music.

Hit the Road Jack

One of the most common suggestions I hear as a way for musicians to combat declining sales and increasing piracy is, “You need to play live more!”. To be honest, I’m never sure what this will accomplish. If someone has no problem with getting music illegally then attending one of your concerts will not suddenly make them see the error of their ways and start throwing cash at your CD table. At best they’ll say, “Great band, I’ll download their stuff when I get home.” If they’re not buying music already, they’re just not buying music.

The truth is that, for a long time now, recording artists have already been touring as a way to make money, since they tend not to make any from royalties.

Who Are They Fooling?

So, after years of waiting, Spotify is here in the U.S. What does this mean for artists? Already the contradictions have started. Sean Parker, who is on Spotify’s board, is giddy over the fact that the service will enable “music to be shared freely across the world -- all the while empowering artists to reap the economic benefits of selling their music". ¹ Am I the only one that sees the contradiction in this statement? There is no income from shared music.

As we all know, when the milk is free, you don’t buy the cow. The idea that a Spotify user, especially one that is paying $9.99 to be on the top of Spoitfy’s three tiered system, will go out and buy music they already have access to is absurd on its face.

Omnia Vanitas: The New Gate Keepers

About a month ago I attended a music festival where several friends of mine were performing. The festival was one of hundreds that focuses on one type of instrument, for example: didgeridoo, shakuhachi, drum, flute, banjo, dulcimer, harmonica, kazoo, harp, piano and guitar. Piano and guitar festivals are very popular, held in cities throughout the country like Dallas, L.A., Seattle, Portland Washington, D.C., Long Island, Boston, Tennessee and more all over the world. These festivals usually consist of performances by name acts, competitions, workshops, private lessons and booths set up by vendors.

Another thing that I see a lot of at these festivals is DIY CDs made by people that want to break into the music business. At the latest festival I attended there were dozens of CDs for sale by people who had recorded one trying to get some exposure, or just for family and friends. So called vanity albums. With the rise of inexpensive home recording equipment it has become pretty easy to make one's own CD. And with the growing influence of the Internet, especially Facebook and Twitter, an artist can attempt to promote their recording directly to their audience.

In part due to the rise of these social sites it is now considered possible to market your own recordings. The traditional Gate Keepers for the music industry: labels, managers and promoters are, supposedly, no longer needed. Once upon a time these gate keepers held the keys to a career in popular music. They had people that listened to acts, went to shows and gauged the strength of an artist's or a band’s appeal. This weeded out those artists that supposedly were not making good music and groomed the ones that were for success. Was this a perfect system? No. Would I be a working recording artist if I had to go through the filter of a record label? I’m thinking, “not so much”.

So who are the new Gate Keepers? And what, if any, stake do they have in your music career? And does this mean that every person that can make an album should?

An Average Album

In the post The Façade we looked at how in order to compete with major and indie labels and their artists, I set out to make my, artist owned, label look as professional as possible. This had some unintended consequences. People really thought that my label was a big deal and, along with that, I must be super rich.

The idea that musicians are all rich and famous has been around for decades. It’s part of the dream that the music industry pushes every year in their giant commercial, The Grammys.

Each spring the music industry puts on a star-studded spectacular award show featuring that year's most popular artists. The top acts in the world of Pop, Rock, R&B and County perform their hits and take home their awards, all in an effort to generate more interest and sales in their albums and songs. The Grammys want you to live vicariously through the lives of these stars, and give the impression that everything about music is glamorous, exciting and super-rich. (We also see this slight-of-hand at the Oscars. Glitz, glamor, fame and money.) They are selling the dream.

The Digital Domain: 1's and 0's or just zeros?

In the last several posts we've looked at how many recordings an Indie musician would have to sell to make a couple of economic target goals: the U.S. minimum wage, and rent, specifically mine, which is a little more than $1,300. Up till now we've only looked at physical product, CD's, comparing sales on an artist's website, at a gig, and through retail stores. We have seen that the farther away the artist got from the customer the more units they have to sell to make our target goals. For example, if an artist sold a CD at a gig for $15 they would be able to apply more of the income from that sale to their rent than if their recording was sold through a retail store via a distributor, both of whom would take their cut.

Below is what this looks like on a graph.


Click image to enlarge

Now we're going to enter the mysterious world of digital downloads. I use the word "mysterious" because some of the of the definitions of that word, such as "difficult or impossible to understand", "having an atmosphere of strangeness or secrecy" and "deliberately enigmatic" are perfectly suited to the digital download world.

The Tale of Retail

In the last post we saw how a recording artist needed to sell 85 CDs each month to make U.S. minimum wage, $1,160. Not every Indie musician can do that. We are competing for sales with a lot of very heavy hitters, the two biggest being iTunes and Amazon. And to make things worse, hopefully they are selling our stuff too, which means our own websites and performances are competing with two of the largest marketplaces in the world.

One of the ways that an Indie artist used to be able to do to get their music out in stores was get their recordings carried by independent distributors. This was especially true for New Age artists, or its off shoot genres, Celtic, Native, Flamenco, Chill... At one time there were a lot of little stores out there that mostly sold books, crystals, incense, wind chimes, and music. They had recordings that the big box music stores did not.

Let's Get Physical: The Real Price of CDs

For me, like many, if not most recording artists, my main source of income is selling my recordings. A lot of people look at a CD and question the price associated with it. They figure that since a blank CD-R they can buy at their local office supply store costs just pennies, so should an audio CD with an artist's music on it.

On it's face this thought is misguided. It is not the CD you are paying for, it is the music that is on it. So the cost of the CD does not reflect the price of an empty disc, but the months or years that go into the production of the music on the disc.

How can a price be put on that? The short answer is it can't. For me as a DIY artist I look at how much money I need to live on and what my competitors are charging. Then I make adjustments. Either to my price or my expenses.

So what goes into the price of a CD?

The Façade

When I first started my label one of the things that I wanted to do was to look as professional as possible. I knew I was competing with real labels and if it didn't have the same look then I would not be taken seriously.

This worked the way I hoped, but it also had consequences that I never expected. In trying to create the façade of a big record label many of my listeners figured that there was more to my little label than there is.

I can't tell you how many times people have confessed to me that they think that my label is located in a really big building---that I have a staff and of course am selling enough recordings to pay for all of this.

The truth is much different...

The Disconnect

This blog will, randomly, explore the disconnect between the music fan's perception of being a working musician and the reality. To look behind the façde at what it really takes to be a working, independent musician today in the new digital music age.

Some of this will be anecdotal, and subjective. Some will not.

The objective of this blog will be to inform music fans as to what is happening in the music industry today, the profound changes that are occurring, and how their actions can help, or hurt, the artists whose work they enjoy.