7 Things Making Musicians (and the Music Industry) Go Out of Business

The music industry - and musicians - are struggling.I recently stumbled across a really interesting documentary – “Unsound.” No, it’s not out yet. In fact, maybe it never will be. Right now, it’s in the funding stages on IndieGoGO and I beseech everyone to go help make it become a reality. Writers, artists, musicians – anyone who does creative stuff needs to donate to the campaign.

It’s not really a donation, anyway, since you get the movie out of the deal.

Unsound is about the increasingly harmful effects of “Free” on the economy – from journalism to music. That’s something I’ve been thinking about for a while, too. Mostly, I want to know why the creative economy is in such peril. So, today, let’s focus on music.

Here’s what’s happening to the industry, and why musicians everywhere are struggling:

1. Assumptions 

I have a friend who looked up an obscure DJ he found on Pandora. Said obscure DJ had about 2,000 Likes on Facebook, but no updates or even a cover photo (if you can believe it).

“Wow, he must have made so much money off his album that he doesn’t even have to do anything,” my friend concluded.

Did he buy the album? No. Did all of those people on Facebook? Maybe. But probably not.

The simple fact is that people aren’t buying albums. In July, the lowest-ever number of records were sold since the numbers were first recorded in 1991. And labels take the majority of money from album sales. Oh, and iTunes takes some money, too.

Musicians earn a living from albums and shows. Now, speaking as someone who’s in a very, very entry-level band, it’s easy to see how crappy this revenue actually is — unless you’re selling out stadiums, you’re not making much, if anything.

Think about it. Four people in the band. Venue takes first $150 in ticket prices. You get the rest. At $10 a head, that means your band needs to bring 15 people to start making money. Then split that money with all the band members, if not other bands, then with the crew and then the travel and lodging costs.

Still not convinced musicians aren’t raking in money, hand-over-fist? According to the Bureau of Labor Statistics and cited by Salon, the occupational class of “musical groups and artists” plummeted by 45.3 percent between August 2002 and August of 2011. 

2. Commoditization 

Music is getting hit by commoditzation from all angles. People can record songs and upload them in a matter of minutes, if they think it’s good enough. Everyone has the tools and the voice and the platform to make some noise.

Secondly, people listen to more music than ever, but are they actually hearing it?

I listen to music at work, at home, when I’m exercising and when I’m traveling. It’s not just music production that’s been commoditized, it’s music itself. The listener’s relationship with music changes when music becomes available everywhere, for free, during another activity.

Active listening goes down, active fandom goes down. When was the last time you stopped and really listened to a song, instead of used it to complement another activity?

3. The Economy 

During the recession, the Age of Free exploded by leaps and bounds. People are slowly getting money back in their pockets, but the impulse control and entitlement genie is out of the bottle for good, casting and cursing and (mostly) whining at things everywhere he whirls.

If you see a band live and you like them at the show, what are the odds you’re going to buy the album there? Or later? Or do you just not go to shows?

Why bother, when you have a hundred artists already saved at your fingertips? Do you have room or time or inclination to add another to the mix?

4. Technology 

Speaking of albums, I got one a while ago at a show. It took me about six months to actually listen to it. Not because I wasn’t interested, but because I didn’t have a CD player anywhere. Not in the house, not in the car and not even in my computer.

So I was technologically incapable of hearing the band’s music. Luckily, the album turned out to be kind of bad.

Bands are selling CDs at shows at a time when fewer and fewer people even have the capability to listen to CDs. I, for one, feel totally entitled to listen to the music I want, anywhere I am.

At this point, if it can’t go on my iPhone, then I don’t end up listening to it. Ever.

I still buy albums, because I want to support the artists I like. But it’s completely optional and totally voluntary. Paying for creativity is becoming a charity act.

5. Streaming

Let’s emphasize again that everyone from Beck to Thom Yorke has started criticizing streaming services like Spotify and Pandora. I’ve already written about how Spotify & Pandora could be killing music, so I won’t linger too much on the topic.

Suffice to say:

  • Artists get paid $0.0018 cents per stream.
  • Another artist says that 5,000 streams of songs from his latest album paid less than £20.
  • A singer said that his song played on Pandora 1 million times and he got paid less than that of a single t-shirt sale.

It’s too early to deem streaming as evil. Pandora and Spotify have also helped people discover and support new music, which I’ve talked about a few times.

Right now, streaming is just trying to kill all other models of revenue… but new artists are dying in the process. Maybe, though, a more sustainable, musician-friendly model will be emerge after the massacre. With piracy just a Google search away, though, is that actually possible?

6. Competition 

There’s no such thing as a captive listener – unless you’re at a concert. Since people are doing so much other stuff while listening to music, the odds that they’ll look your band up after a song plays on Pandora have gotten lower.

And what chance do you have when your band is literally just a tap away from Pink Floyd?

The Atlantic showed off a colorful chart that makes this point very well, comparing the top 5% of the music business to the wealth inequality in the entire country. Globalization and technology have allowed the best producers to reach more people and keep more of the wealth.

That allows for astronomically different ticket sales, too.

Bands need better personalities. They need beliefs to stand out. In the social media-fueled economy, building a band means making connections and delivering valuable content on a pretty regular basis. That’s how you make sure listeners still remember your band, even after they’re blasted with music from two dozen other bands every day, wherever they are.

7. Passive Listeners

If someone bought an album every time they watched a YouTube video, the music industry would be a much different place. If listeners immediately decided to look at tour dates and albums and songs for a good band on Pandora, artists would be benefiting from the digital era, rather than hurting.

This does happen, but not enough. There are too many passivelisteners out there, who are satisfied with the thin broth of disconnected yet comfortably familiar songs stirred around by Pandora.

The same thing has happened to books. Ebooks are cheaper. They might not be as good, but there’s a large swathe of readers who don’t care about that. Mass market paperback sales – the ones you see in the grocery store with a cover showing a dude with a ripped shirt fondling a woman on a beach in the rain – fell by over 20% last year.

Most of my friends are passive listeners. Those are the people who used to buoy artist sales. Not because they love, love, love the music, but because they like one or two songs. Since they don’t have to buy albums to do that anymore, the whole model collapses and the only people who support artists now are die-hard fans.

Everyone else supports streaming.

It’s a strange time when people won’t hesitate to throw $6 at a bartender for a Coors Light, but will balk and whine when asked for the same amount for an album.

The Foggy Crystal Ball of the Future

The fate of music rests in fan’s hands, first and foremost. People need to overcome their entitlement and support the bands they love. If you hear something on Pandora you like, look the band up. Preview a few more songs. If you like them, buy the album.

The only way this will happen is if YouTube decides to take down all of the illegally uploaded music up there, which will otherwise continue to depress prices. Google’s site may do that soon, given the rumors about a “music subscription service.”

Of course, that opens the door to more than music. YouTube offers musicians to experiment with videos for not just the singles, but for all of their songs. That’s what I think the future of music will be – a holistic experience that can be a song, but also be a whole-media package.

That way, you attract more listeners than just the people who like the music. You attract the people who like the video, then people who like the message, the style, the visuals, and everything else.

Photo Credit: Fey Ilyas via Compfight cc

One thought on “7 Things Making Musicians (and the Music Industry) Go Out of Business

  1. I think that, like most people, I’m guilty of listening to most of my music through streaming or Youtube. In recent years my cash flow has increased, so I’m trying to do a better job of going and actually buying the album (be it on iTunes or in actual CD format). But I still have some work to do 🙂

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