It Isn't Easy To Break Out Of Obscurity In The Music Business

from the so-what-should-you-do dept

It's no secret at all that it's tough to become famous in the music industry. In the past, you had to hope for one of the golden lottery tickets from a major record label. Otherwise, after a few years of trying, you went back to something else instead. But is it becoming any easier these days? It seems there's some debate about that. Music Think Tank highlights some stats on artists who broke out in 2008:
In 2008, 1,500 releases broke the "obscurity line" (sold over 10,000 albums).

Out of [those], 227 artists broke the "obscurity line" for the first time ever.

Out of the 227 first-timers, 14 artists did it own their own; approximately 106 were signed to a major; the rest were signed to indies.
Interesting stuff, right? Now, the quick conclusion here is that you still need that magical golden lottery ticket to make things work. But I'd argue that's not necessarily the case. First of all, a decade ago, how many artists could have done it "on their own"? Yes, it's a small number now, but it's a trendline that didn't even exist just a few years ago, and the opportunities to do it on your own have only increased. In fact, I'm surprised that 14 artists were able to sell 10,000 albums without a label already. That's really impressive.

And, of course, "doing it on your own" isn't necessarily the point. We're all for artists using record labels or managers or whoever makes the most sense to help them handle the business stuff -- but just the fact that they don't necessarily have to is quite impressive.

The second problem with the stat above? It assumes that album sales are the judge of the "obscurity line." That certainly may have been true in the past, but it is really becoming less and less of an issue. You don't have to sell albums to become well known, and just because you're well known, it doesn't mean you sell albums. It's not the best proxy for figuring this stuff out.

In fact, that data above came from a great (and absolutely worth reading) interview with Tom Silvermn of Tommy Boy Entertainment, and in the interview he more or less makes that very point:
Tommy Boy is more than a record company; we don't consider ourselves a record company anymore, we're much more than that. Now we're sort of a strategic artists positioning company, and our job is to take an artist from where they are in revenues to a much higher number. If we work with Artist A that's making half a million dollars a year, our goal is we take them to a million in year one, two million in year two, and three or four in year three. That's our goal. And then we take a percentage of that revenue. And we're talking about dollars, not record sales, because we may decide to give the records away, and we may only make about 10% of our money from the music and master use or 20% and the rest of it will come from touring and merch, publishing and possibly sync and other things. We'e not concerned with where the money comes from as long as it comes.

Tommy Boy is known for building brands, from Queen Latifah and Ru Paul, to De La Soul and Afrika Bambaataa, Naughty by Nature, House of Pain, so many household names now that you know. When you mention the name, you can see them; like Digital Underground, when you close your eyes, an image of who they are comes up. Coolio ... they all became significant brands, and that's what we did. Tommy Boy is itself as a significant brand. We're not just a record company. Our business always was building brands. How we used to make money was selling records; but we don't see it as the way we can make money now. It's one of the streams of revenue that we can make money from, but it's no longer the most significant or even the second most significant way we'll be making money. We can no longer be limited in how we see artists to the music domain. It's more than the music. We have to work with the artist's positioning.
Exactly. It seems like he understands completely how the industry has changed and what's happening today. Selling music, alone, is no longer the business model. It may not even be a major part of the music business model. It's much more about understanding what that artist allows you to sell. It could be music. It could be seats in a venue. It could be t-shirts. It could be instruments or music boxes or something wacky. Or maybe it's a combination of them all. And, in that world, "album sales" might not be a very good proxy for who is and who isn't obscure. If you're goal is to make a ton of money selling some of those other things, it might make the most sense to give that music away as freely as possible to get over the obscurity hurdle in order to get more people interested in buying those other things.


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    Paul Watson (profile), Jan 18th, 2010 @ 11:37am

    Out of the 227 first-timers, 14 artists did it own their own; approximately 106 were signed to a major; the rest were signed to indies.

    I'd be interested to know how many "failed" at the first hurdle.

    For example, if 500,000 artists tried to get signed to a major in order to come out of obscurity (we'll use their definition for the time being), and only 106 broke the "obscurity line" (the vast majority being rejected by the major label in the first place) then the failure rate for the "major" route to success could be higher than the "indie" or DIY options.

     

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      Anonymous Coward, Jan 18th, 2010 @ 12:21pm

      Re:

      I agree, I'd like to see those stats as well. I imagine that major labels have a much higher success rate, which is to be expected given their financial power.

      Still, these numbers are incredible in terms of the necessity of major labels, considering their "products" are only about half of the "successful" artists in the market.

      Granted, major label artists are likely to pull in higher profits, but it's obvious here that the music industry will not simply die away if the major labels fail.

       

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    Big Al, Jan 18th, 2010 @ 1:46pm

    Profit?

    You state: "Granted, major label artists are likely to pull in higher profits".
    Having looked into label 'accounting' and royalty rates for artists, I think you will find that running with an indie label or, as in the case above, a decent management package will certainly help the artist maximise their profits. Major Labels exist only for the good of Major Labels.

     

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    PRMan, Jan 18th, 2010 @ 2:02pm

    My wife

    My wife (Marla Reid, if you care) had an album and sang at Border's coffee shops throughout Southern California. She ordered 1000 pressed professional CDs and we have less than 100 left.

    But, I still feel like she was a success because we MADE MONEY ON THE CD. We sold enough copies that she sold more than she spent making it.

    And what's obscurity anyway? Almost all of my music (Christian Rock) is obscure by most people's definitions. I saw the Newsboys at Knott's Berry Farm on New Year's Eve and they have been around for 25 years and nominated for 4 Grammys and all of my co-workers said, "Who?".

    I'm guessing nobody here has heard of them either, despite their phenomenal success.

     

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      Benjamin Wade Inman, Jan 18th, 2010 @ 5:50pm

      Re: My wife

       

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      Benjamin Wade Inman, Jan 18th, 2010 @ 6:22pm

      Re: My wife

      It all depends on where the individual's meaning of success stands. If an artist is happy with only selling a few thousand copies, that's great in my opinion! The music business is just that, a business and we have to turn a profit in order to survive. So yes, labels do make money, it's not a secret to anyone. It never has been.

      It's true that indie artists can do some things on their own but it's also VERY important to mention that with so much saturation in the marketplace today and indie artist simply does not have the capital neccessary to hire the appropriate manpower needed to help market/position their "brand" to stand out from the others while also focusing on writing songs.

      Labels, or borrowing from Tom Silverman above, Music Companies, will always be needed by a great majority of artists that truly want to break through to the mainstream. Then again, it also depends on what each band/artist considers success.

      And yes, PRMan, I have heard of the Newsboys, I know their music very well. However, I'm not sure I could clasify them as 'Rock' If you want good 'Rock' I would recommend Decyfer Down's new album 'Crash', Pillar's new album 'Confessions' or up and coming bands Fireflight or Graylit. For those that haven't heard of these groups, Look up their Myspace pages and listen to a few songs.

      Regards,

      Benjamin Wade Inman
      Managing Partner
      ZONG Music Partners LLC
      Nashville, TN
      http://www.zongmusic.com

       

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    Derek Kerton (profile), Jan 18th, 2010 @ 2:32pm

    That Only Works For...

    You know those people who say Mike's ideas "only work for" small or big acts, or artsy, or whatever? They're wrong, but, the flipside IS TRUE:

    It is really ONLY the major acts like U2 or Metallica that can make a living off of album sales. That's because they've already build an audience, already got their fame, and they have the clout to get a good deal with a label, or start their own. Small wonder these brands/bands tend to side with the labels...they often are one!

    Smaller acts, or indies like the Christian rocker directly above this comment, can sell albums, but they are doing it in the hopes of not suffering losses, and in getting their music out there. Yet today's cheap production and distribution tools have allowed modern independent acts to actually make a living...even if they still don't sell a boatload of profitable plastic disks.

     

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    Matthew Cruse (profile), Jan 18th, 2010 @ 2:37pm

    Disney

    Disney absolutely undersatands and uses the branding concept. Look at Hannah Montana / Miley Cyrus. You cannot walk through a mall, Wal-Mart or Target store without seeing her face or products. Disney has understood the multiple stream monetizing for a long long time. I guess that they see copyright as the same type of thing, yet another stream, and they are trying to lock it up too?

     

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    Rob Michael, Jan 18th, 2010 @ 3:12pm

    Since when does fame = success?

    The notion that you have to be famous to succeed in music is ridiculous. Success and obscurity are common bed-fellows.

     

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    Bruce Warila, Jan 18th, 2010 @ 4:06pm

    Sensational Headlines

    I see you took the in-depth approach to the Silverman interview. I opted for the sensational headline and the lazy analysis on MTT (it was late)..

    The problem with guessing about the success of independents is that it's just guessing. Nobody really knows for sure how well indies are doing as a whole. Someone has to do some exhaustive research and push out some ongoing case studies. We all need evidence. The SoundScan stuff is practically useless, the TuneCore list is pretty good, but there's not much else to hang your hat on..

     

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    :), Jan 18th, 2010 @ 4:25pm

    Opinion.

    I don't think it is easy in any walk of life to break out of obscurity.

    But it is much easier to make a living from anything, well not that easy is still difficult but not impossible, people complain about it but today is better then a hundred years ago.

     

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    Rick Goetz, Jan 18th, 2010 @ 6:22pm

    Thanks-

    Thanks very much for the mention Mr. Masnick - been a fan of techdirt for some time. Flattered you read the interview.

    Rick
    MusicianCoaching.com

     

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    Jake, Jan 19th, 2010 @ 2:31am

    Barking Up The Wrong Tree

    Wouldn't it be more useful to ask how many independent musicians, or writers or illustrators or any other kind of artist for that matter, made enough money from their art to start living off it full-time?

     

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    Anonymous Coward, Jan 19th, 2010 @ 4:25am

    Coolio? Is it 1990 again?

     

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    Suzanne Lainson (profile), Jan 19th, 2010 @ 8:14am

    $10,000 a month

    Here's how I approach it. A four-piece band needs at least $100,000 to $120,000 a year coming it to give everyone a very modest annual income. That's about $20,000 to $25,000 a year per person, with the difference left over to pay for help, various expenses, etc.

    A lot of bands are hard pressed to make $10,000 a month on music-related stuff (gigs, merch sales, etc.)

    It can be done. I've seen it done. But when you start trying to break down the numbers to figure out where that income is going to come from, you see the challenge.

     

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      Suzanne Lainson (profile), Jan 19th, 2010 @ 8:24am

      Re: $10,000 a month

      Also, I also try to point out to people that as more bands/artists are told they can make it, more come out trying, all of them appealing to the overall pool of potential fans. So unless someone finds a way to get fans to spend more overall money on music and music-makers, the amount of money going to each band/artist gets smaller --- in many cases too small to support them full-time.

      So you get a lot of people making music, but having day jobs to support themselves. Which is fine.

      I've been pursuing the concept out even further to the point where everyone will have the technology to make music. We may end up with a lot of people making their own music and amusing themselves with it rather than staying passive music consumers in the traditional sense. If you can feel like a rock star yourself, rather than just a fan who listens to others play, then that may be the way you will go.

       

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    Michelle McDevitt, Jan 19th, 2010 @ 8:33am

    360 Deals

    I find it interesting that this article nor Tommy never mention the term "360 deal" because that's exactly what this is about; taking a percentage of ALL of an artist's activities, not just record sales.

    Also, I like how Tommy points out the necessity to DEVELOP an artist over several years. Newbies to this industry forget (or maybe don't want to face the fact) that it takes years to "break" artists. For every successful artist, you'll find a dedicated, hard-working team of people who have been working behind the scenes for a long time.

     

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    Michelle McDevitt, Jan 19th, 2010 @ 8:34am

    360 Deals

    I find it interesting that this article nor Tommy never mention the term "360 deal" because that's exactly what this is about; taking a percentage of ALL of an artist's activities, not just record sales.

    Also, I like how Tommy points out the necessity to DEVELOP an artist over several years. Newbies to this industry forget (or maybe don't want to face the fact) that it takes years to "break" artists. For every successful artist, you'll find a dedicated, hard-working team of people who have been working behind the scenes for a long time.

     

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    Antiqcool (profile), Jan 19th, 2010 @ 8:55am

    Out of obscurity

    My thoughts on this subject are contained within this podcast http://www.last.fm/music/ANTIQCOOL/The+Antiqcool+Podcast/The+Antiqcool+Podcast+How+can

     

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    Jason Harper, Jan 19th, 2010 @ 9:26am

    Obscurity line?

    Though the fact that 1500 releases sold over 10,000 in 2008 is of passing interest, I don't think anyone today should be measuring obscurity -- or stardom -- based on album sales. Album sales dropped, what, 20 percent in 2008? Then another 12.7 percent in 2009? If you must look at music sales, look at digital track sales. Better yet, use social metrics calculators like Big Champagne and RockDex to determine a band's popularity and then plot your 360-degree marketing campaign off those numbers.

     

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      Suzanne Lainson (profile), Jan 19th, 2010 @ 9:36am

      Re: Obscurity line?

      I take the album sales as just an indicator. Other forms of music-related sales probably follow a similar pattern: the top acts (signed or DIY) get the very highest amount of money, and everyone else gets less.

      If we had the figures on gross income for bands, we'd probably see some sort of similar distribution.

       

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    Jason Harper, Jan 19th, 2010 @ 10:03am

    Re Re: Obscurity Line?

    Fair enough, Suzanne. I probably should have stuck with "popularity" instead of "stardom." U2, Lady Gaga, Susan Boyle, Taylor Swift -- of course they're gonna sell a lot of product. Albums included, for now.

    What's the definition of a "top DIY act"? I'd say that's someone like Amanda Palmer. She's signed to a label and has CDs out, but she openly admits that she makes no money off sales. Instead, she mobilizes her fanbase through things like Twitter to produce streams of revenue that go directly to her. Maybe she's not over the "obscurity line" in terms of sales, but she's definitely popular enough to make money.

     

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      Suzanne Lainson (profile), Jan 19th, 2010 @ 10:12am

      Re: Re Re: Obscurity Line?

      Probably a top DIY act would be Corey Smith (grosses about $3 million a year) or some of the jambands that tour all the time.

      It's really hard to get figures from anyone. One artist I know was making $150,000 a year from basically a local market and a mailing list of about 3000 fans. She was playing about 200 shows a year. She was averaging about 3000 CD sales a year at $15 each. Now that the CD market has gone down, her income may have done so as well. The DIY artists who were selling a lot of CDs at shows have, I assume, been hit by the downturn in CD sales just as the labels have been.

      Some of the DIY bands that make a decent living play a lot of private gigs (weddings, corporate events). Many of the bands aspiring to make a go of this turn their noses up at the idea of playing a mix of covers at a private event, but that can be where the money is.

       

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    Peter Wells, Jan 19th, 2010 @ 10:03am

    So much depends on what "success" means, and it's different for every artist. But first, remember that SoundScan numbers aren't a true reflection of the world. I know just from looking at the THOUSANDS of artists who are selling darn well at TuneCore alone that the picture is both more complicated and robust than people get to truly see.

    The whole point of TuneCore was to make it easy, frictionless, barrier-free for artists to get distribution (the one thing they could never get before), and that's changing the game.

    --Peter
    peter@tunecore.com

     

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      Suzanne Lainson (profile), Jan 19th, 2010 @ 10:18am

      Re: Success

      I think success for most musicians might have to be defined as being able to create and play music, not necessarily to make money at music.

      Most skiers, for example, spend money to ski rather than making money at skiing.

      Most photographers take photos for their own enjoyment rather than to make a living at this.

      Many musicians may think of themselves as professional musicians, but relatively few will ever earn enough to quit their day jobs.

       

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        Jason, Jan 20th, 2010 @ 11:44am

        Re: Re: Success

        YES.

        I just took off a week of work to go on tour. We had a blast, met a lot of cool people, played with some great bands, actually sold some CDs, and basically broke even. It was an awesome FREE vacation where we got to play music every night. What more could you ask for?

         

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          Suzanne Lainson (profile), Jan 20th, 2010 @ 11:49am

          Re: Re: Re: Success

          It was an awesome FREE vacation where we got to play music every night. What more could you ask for?

          YES.

          I'm trying to put music as a career into perspective. People are jumping up and down as if the end of the major label system has suddenly opened up so many more opportunities in music.

          Yes, it's easier than ever to go directly to fans, but now there are so many artists doing it and it's a new set of challenges.

          And people are telling you that to make it in music, you may end up putting in 40 hours a week doing non-music-making stuff. If you are going to put in that much time on something other than music, it might as well be a day job, if you like the day job and it pays well.

           

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    Jonnie Baker, Jan 19th, 2010 @ 1:15pm

    A band POV

    Suzanne, you might be onto something with your above comment about success being defined as being able to create and play music, and not necessarily make money by doing it.

    I've said for a long time, that if there is a good draw for a show, and people at the shows are having a good time, that I could break even, and make only enough for my rations du road, and be completely satisfied. Fame would be nice, but that's certainly not how I would gauge my success, or the success of my band.

    Fame has become a monster in its own right, given it's only grown larger with more mediums in which to explore it, and it's far less attainable if the limelight is being crowded with already established bands/brands/acts that have yet to make a folly, and drop themselves out of it.

    The long and the short of it, I think, is that not everyone does it simply for enjoyment. Music is a powerful tool, and we all connect to it in different ways, but for every person out there doing it for love of the game, there are just as many people out there doing it because they don't want to work their part-time jobs, full time hours. I don't believe that means that they don't connect to their music in a profound way still, in fact that inspiration could create a means to express the latter. I just think there are some nuances in every corner of any argument that could be made, regarding this subject.

    As a side note, this was an AWESOME article to come across, thank to Mike Shea for tweeting about it.

     

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      Suzanne Lainson (profile), Jan 19th, 2010 @ 1:49pm

      Re: A band POV

      Suzanne, you might be onto something with your above comment about success being defined as being able to create and play music, and not necessarily make money by doing it.

      I've said for a long time, that if there is a good draw for a show, and people at the shows are having a good time, that I could break even, and make only enough for my rations du road, and be completely satisfied. Fame would be nice, but that's certainly not how I would gauge my success, or the success of my band.


      What I have been trying to point out to people is that if you go into music because you want to make music, doing all the non-music aspects of the job may not be very satisfying for you. You might actually be able to make more music and the music that you want by not worrying about whether it pays the bills. Having a day job that pays well and you can leave at the office may actually give you more time to make music.

      Some people suggest that if you just want to make music, leave the marketing/merchandising/fan management etc. to other people. But it's hard to get people to do that unless you pay them upfront, give them a big percentage, or find people who will do it for free.

       

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    pa, Jan 19th, 2010 @ 3:58pm

    INDIES????

    ARENT A LARGE NUMBER IF THE INDIE LABELS LIKE ASTRALWORKS AND DREAMWORKS AND WORK AND ONE LITTLE INDIAN AND MANY MANY MORE OWNED/SUBSIDIARIES OF MAJOR LABELS?

    so there is another line to draw in the sand between "true indie labels" and "indie labels that are subsidiaries of major ones". this also lessens the relevance of the stat as a whole because the methods and marketing can be bumped up from dreamworks to disney people if the artist makes a splash whereas the band on jujubee records is stuck with the personnel and finances of jujubee records

    but in a way it makes the stat more relevant because some indies are so small they arent capable of much more than what an informed individual or band can do on their own.

    the way i see it though everyone is going to yell and complain and put down big labels and the labels are going to save the day with the "3 strikes isp" laws. its funny how most (if not all the bands) that are putting down big labels are only famous enough to have their articles read because of the success they received while on one.

    without labels who will be the next radiohead or NIN?
    no one. their cries against big labels will be heard more than their music

     

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    Suzanne Lainson (profile), Jan 20th, 2010 @ 10:12am

    Does doing it for the money kill the joy?

     

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    Rick Goetz, Jan 20th, 2010 @ 5:34pm

    The 14 are actually 12...

    The fourteen artists were actually twelve - it's currently posted on Musiciancoaching.com under state of the music industry part 3

     

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    Neil, Jan 22nd, 2010 @ 2:01pm

    Neilsen Soundscan numbers don't matter

    In terms of looking at the reality of today's recorded music sales, it's time to stop using Neilsen Soundscan figures as any sort of reliable measure.

    The majority of independent music sales are not tracked by Neilsen, and this is the burgeoning section of the music industry.

     

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