Techdirt. Stories filed under "musicians"

Massive Growth In Independent Musicians & Singers Over The Past Decade

Mike Masnick — Thu, 30 May 2013 10:02:07 PDT

We've discussed in the past a favorite talking point of the RIAA, claiming a 40% decline in employment for musicians over the past decade or so, which simply isn't supported by the numbers. We've been seeing a lot of people claiming this again lately, so we decided to take a look at what the numbers actually showed, and can't seem to figure out where that decline is coming from, because the numbers show a very different story -- one that suggests things are actually much better for independent musicians than in the past, just as we would expect. In fact, there's been an astounding 510% increase in independent musicians making their full time living from music in just the past decade.

It's important to note, of course, that very, very, very few people get to make a living as a professional musician. That's just the unfortunate reality of the market. But understanding where that employment comes from is important. The RIAA, rather bizarrely, relies on the top line numbers for "musician employment" to make their case, but nearly all of those musicians are not musicians who are associated with RIAA member labels at all. Let's dig into the numbers a bit and see what we find.

The Bureau of Labor Statistics Data is available on their site, though they don't always present it consistently, and so we see some people cherry picking some numbers (what the RIAA did) to distort things and then, sometimes, they're just bad at math (again, RIAA is guilty). So, if we look at overall employment of musicians and singers over a 10 year period, we can go back to the numbers from May 2003 and then the numbers from May 2012. Take a look at some of the key data points here. Let's start with the top line numbers, which is what the RIAA and others have been using. From May 2003:

From May 2012:

The top line there does show a decrease in full time musicians and singers, overall, but it's a drop of 16.7%, nowhere near the 40% (or, even higher) numbers some claim. Anyone claiming a bigger drop from these numbers is doing something wrong. Because when you compare the same numbers a decade apart that's the drop you get.

But the top line numbers aren't that interesting, really. Let's look a bit deeper at what makes up those numbers above, and you discover some very interesting things very quickly: From May 2003:

And From May 2012:

If you look at what the jobs actually are in this industry, the largest chunk, by far, are musicians employed by "performing arts companies." These are theater orchestras, symphonies and the like. They are musicians (very, very good ones), but they're not the kind of musicians the RIAA is talking about when it talks about musicians. That industry (performing arts companies) is definitely dealing with a bunch of challenges of its own related to continued funding, getting paying guests for shows and the like, but those are very different from the challenges that the internet creates for recording artists, which is what most people are talking about when they have this discussion. A big part of the "decline" in full time musicians comes from these performing arts groups, however, going from 27,860 down to 22,500. The second biggest chunk of this number is also not what people generally think of in this area either: religious organizations.

So, let's look at the kinds of musicians that most people think are being talked about when discussing musician employment: musicians in bands that record/release songs/albums, perform and tour, and that kind of thing. Remember, these numbers are very, very small, because the BLS is only looking at full time musicians, and there just aren't that many people who make a full time living as a musician outside of working for a performing arts company. Back in 2003, the "sound recording industries" (i.e., the labels) employed a grand total of... 880 musicians. Across the entire country. Note, too, that this was the high point of the industry. The idea that the RIAA is some huge supporter of musicians when at its peak it didn't support more than 1,000 musicians really says something, doesn't it? A decade later that number is, indeed, way down: 190. The major labels aren't supporting very many full time musicians at all.

But, much more interesting is the corresponding explosive growth of independent musicians. Back in 2003, it was a mere 300. But, by last year it was 1,830. In other words, over the past ten years, there's been decided growth in full time musicians of the type that we're normally talking about -- those creating and releasing music. In fact, it's grown 71% from 1180 in 2003 to 2020 in 2012, and the massive growth is seen in the area of independent artists who have much greater choice and control in their careers. And, it seems worth noting that the equivalent mean wage of an independent artist is significantly higher than one employed by the labels -- $35.41 vs. $26.38. Mean numbers are a bit meaningless since all sorts of things can be hidden in the mean, but on the whole, the numbers look pretty good.

Now, there are plenty of caveats to go with this, since many, many musicians who release music are unable to do so full time, so they don't show up in this chart at all. But by all indications more part time artists are also earning more money than ever before as well, with thousands of artists now being able to make some money, whereas in the past they couldn't make any.

Of course, it would be great to get even more artists making a full time salary, but the argument made by the RIAA and others that now is a bad time to be a full time, performing musician, making and releasing music, just doesn't seem supported by the numbers. It sure looks like there are many more full time, performing musicians now, it's just that many of them are independent (and making more).

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UK Newspaper Licencing Agency Says Musicians Need To Pay To Quote Reviews

Mike Masnick — Mon, 12 Nov 2012 10:35:03 PST

I wonder how copyright maximalist musicians feel about this particular story. Techdirt reader glassneedles alerts us to an offline (!?!) news article in the publication Private Eye, about how the UK's Newspaper Licensing Agency (NLA) has declared that musicians who quote positive reviews from newspapers need to pay £1,250 per year (which would allow them to quote up to 50 reviews). Seriously. Apparently, the NLA went around to various music agents and managers a while ago, and they (quite reasonably) ignored the threats. That just made the NLA mad.

... the phoney war has turned into a real one, with the NLA chasing agents, threatening legal action and demanding not just license payments for future quotes but also retrospective payments for past ones.

The amounts are crazily excessive for the modest, shoestring operations that most classical music management and PR companies tend to be, with £7,000-£8,000 a typical demand.

For folks who help market a number of musicians, the NLA claims are apparently adding up to being fairly serious.

The most outrageous example... concerns a small PR company called ElevenTenths, which is effectively one woman, Claire Willis, working form a spare bedroom.... Poor Ms. Willis was collared by the NLA a few months ago, required to fill in forms about her clients and activities, and then received a bill for £23,500.

Willis complained and apparently the NLA "backed down" and offered a deal for "only" £1,588.45. In the past, we had written about the NLA winning a lawsuit against news aggregators, so perhaps it's now turned to those who quote its reviews as a new, highly questionable, revenue stream.

I wonder if folks in the UK are regretting the decision, in the Hargreaves report, that the UK doesn't need an explicit fair use rule.

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Ridiculous: Vietnam Sentences Musicians To Jail For Songs That Protest Government Actions

Mike Masnick — Mon, 5 Nov 2012 03:17:37 PST

We talk a lot about the importance of free speech here in the US, and worry tremendously about any efforts to chip away at such free speech rights. Even as we worry about how free speech issues are dealt with at home, we're very aware that most other countries have significantly less respect for basic free expression concepts. It's somewhat horrifying to learn that last week, a court in Vietnam sentenced two Vietnamese musicians to years in prison for writing, recording and posting online some "protest" songs:

Both were accused of posting songs on a Web site of Patriotic Youth, a opposition group based overseas. Mr. Tri, 34, who uses the stage name Viet Khang, has criticized the government in his songs for not taking a harder line against China in territorial disputes. A video for his song, "Viet Nam Toi Dau" ("Where Is My Vietnam?"), has become a YouTube hit, with 700,000 views. Mr. Binh, 37, recorded the song "Courage in the Prison" ("Nguc Toi Hien Ngang") in support of an imprisoned blogger, Nguyen Van Hai. The song urges people to mount nonviolent protests.

And we're not just talking about a few weeks in prison, either. Tri got four years and Binh got six years. Binh's situation is especially ridiculous since his song is about an equally ridiculous prison sentence for a blogger. Basic political dissent is important to any free society, and to completely lock people up over some rather straightforward protest songs (that don't advocate violence or anything like that) is really quite horrifying. The US, thankfully, has condemned these sentences, but this is an issue that more people need to know about and speak out about.

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RIAA's Bogus Math Strikes Again: Claimed 41% Decline In Musicians... Not Even Close To True

Mike Masnick — Mon, 8 Oct 2012 12:34:38 PDT

Hey, it's time for some bogus stat debunking, thanks to Matthew Lasar at Ars Technica, showing that, once again, "RIAA math" is something more closely aligned with stuff we made up that people might actually believe.

There have been a variety of similar stats being thrown around these days in debates around what's happening in the music industry from defenders of the old way of doing things, arguing that there's been a massive decline in the number of musicians out there. The stat pops up in different forms, but keeps coming back up. We first saw a version of it back in 2010 when the RIAA put up a blog post claiming that "illegal downloading = fewer musicians." While we appreciate them finally realizing that unauthorized downloading isn't "theft," the chart claims to have posted data from the Bureau of Labor statistics, showing a correlation between the number of "musicians and artists" and the decline in recorded music: Even leaving aside the "correlation =/= causation" argument that could be made, the chart itself plays with numbers a bit. Note that the scales are different, meaning that the data was "fitted" to make it look like a direct correlation when that's not actually the case. RIAA math, as per usual, tends to be all about lies.

But, that chart seems to have taken on a life of its own in bizarre and ridiculous ways. Back in April, class warrior Timberg, claimed that BLS data showed a 45% decline of people employed in "musical groups and artists" from 2002 to 2011. That number has become a key touchstone for the rabid defenders of the old way. Not a week goes by without someone claiming something like it in our comments -- usually even messing up what was said. For example, that comment says that the 45% represented a decline in wages -- which is not actually what any of the numbers have shown.

In June, the RIAA's Cary Sherman gave a talk at PDF, in which he cited BLS data claiming a decline in artists of 41% from 1999 to 2011. That number was then picked up by Paul Resnikoff who posted the RIAA's updated version of the graphic and, again, insisted that BLS data says there are 41% "fewer paid musicians" since 1999. Once again, that's not actually what the chart says. It's not about "paid musicians." It's about how many people claim to be "musicians or artists on a full time basis." There are plenty of "paid musicians" who aren't full time.

Either way... Matthew Lasar, over at Ars Technica digs into the numbers to find that the RIAA's and others' claims... are completely bogus. First off, it appears that they failed the "how to calculate percentage change" test. Lasar also finds that the actual change based on the source data appears to be maybe a decline of a little over 8%. As he notes "8.4 percent, I'm sure most readers will agree, is a long way from 41 percent."

When confronted about this, first the RIAA admitted to playing some games with the numbers, not by using more stable yearly data, like Lasar did, but rather by using monthly data... and by selectively choosing which months to use.

"As far as the 41%, from that data set," came Friedlander's reply, "if you look at any of a variety of months between late 1999 and 2011 and 2012 (such as July '99 vs Aug '11) you can see declines around the 41% level (different months yield different figures, but some are even higher than 41%)."

In other words, it fluctuates pretty drastically. Anyone who wanted to reasonably show a change, would at the very least choose the same month in different years -- since there is likely to be significant seasonal fluctuation in musician employment (for example, July is a big month for weddings, which might mean more musicians who play weddings are "full time" musicians for July). As Lasar notes, this calls into serious question why the RIAA and others are making categorical statements that just don't appear to be supported by the data. Furthermore, even if the RIAA's bogus claim of 41% is based on monthly data... that chart that it's been spreading around shows yearly data, but implies, incorrectly, that it shows a 41% decline:

The problem with this response was that Sherman's categorical statement that we've seen a 41 percent drop in the number of musicians and artists since 1999 wasn't based on a monthly chart. It was based on the yearly table that he showed the Personal Democracy conference.

Finally, Lasar notes that the Bureau of Labor Statistics is actually pretty optimistic for employment among musicians to grow at about 10% over the next decade:

The number of people attending musical performances, such as orchestra, opera, and rock concerts, is expected to increase from 2010 to 2020. As a result, more musicians and singers will be needed to play at these performances.

There will be additional demand for musicians to serve as session musicians and backup artists for recordings and to go on tour. Singers will be needed to sing backup and to make recordings for commercials, films, and television.

That said, I don't think a slight and temporary decline in full time musicians should be all that surprising. It's true that labels funded a bunch of musicians for many years -- but often for short periods of time and with very questionable accounting practices. The problem, of course, is that many musicians came to believe, incorrectly, that the major labels were the only way to make money in music, and so they did little to cultivate new business models. These days, however, that's happening more and more, but we don't have enough experience for people to know what really works and what doesn't. So it's an era of experimentation -- and that means that an awful lot more musicians are making some money, whereas before they made none. That's good for all of those musicians -- and might (in fact) mean that more money overall is going to musicians -- it's just more spread out. But we haven't yet reached the point where things have developed enough to match the number of full time musicians, though as people become more comfortable with these new models, that seems almost certain to happen.

Either way, it looks like RIAA math has once again been shown to be a complete fabrication, relied on by people who want to continue to support the ridiculous story that artists need labels to make money. It's sad that so many people cling to an obviously false tale, but it's good to see the numbers debunked. Hopefully we can now move on from that silly narrative and focus on new business models that do help artists get paid -- rather than ones that just help the RIAA divert money from artists.

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Dan Bull, Amanda Palmer & El-P: A Big Week For Artists' Voices On Techdirt

Leigh Beadon — Sat, 5 May 2012 12:00:00 PDT

Today, instead of the usual community favorites post, we wanted to take the opportunity to highlight our own top picks for the week. It was an easy choice, because we love it when artists and creators visit the site to speak about their experiences, and this week we were lucky enough to have guest posts from three different musicians. They all had a lot of great stuff to say, and here are a few highlights.

The first came about as a result of my post on rapper/producer El-P's friendly message to fans who downloaded the early leak of his album. El-P joined the comments, then followed up with a guest post discussing his approach to the music industry, and his thoughts on the popular debates about it:

So how do I feel? What's the right way? Fuck if I know. But I'll adapt and I'll do it with respect and class and not kicking and screaming. There's a hell of a lot I could say about both sides of this particular subject, but honestly does it matter? You all have formed your opinions on it already and in the end people like me are still out here trying to make a living no matter what those opinions are... right, wrong or in-between.

Unfortunately the comment thread on that post was hijacked by one particularly obnoxious AC, but amidst the noise there was also a strong response from some community members who were grateful to El-P for sharing his frank and thoughtful opinion, just as we were.

Next, we got a visit from the one and only Amanda Fucking Palmer! Amidst all the excitement surrounding her Kickstarter project, Amanda deftly employed an allegory about bamboo to describe the campaign's massive success, and the many years of work that made it possible:

There's a great story about how bamboo grows. A farmer plants a bamboo shoot underground, and waters and tends it for about three years. Nothing grows that's visible, but the farmer trots out there, tending to this invisible thing with a certain amount of faith that things are going to work out. When the bamboo finally appears above ground, it can shoot up to thirty feet in a month. This is like my kickstarter campaign. The numbers aren't shocking to me, not at all. I set the goal for the kickstarter at $100,000 hoping we'd make it quickly, and hoping we'd surpass it by a long-shot.

Incidentally, as I pointed out on Twitter, Amanda Palmer is an anagram for A Mr. Panda Meal. Coincidence?

Last but not least, Dan Bull took a break from writing epic raps to write an epic post. After Dan successfully used the Pirate Bay and its Promo Bay program to get his new single on the charts, we wondered what he must think about his country's decision to censor the site. Now we have our answer: he thinks it was pretty damn ridiculous.

Now, thanks to the High Court ruling, no aspiring musician will be able to use The Promo Bay to gain exposure in the UK. Once again, the British Phonographic Industry is throttling any channel of distribution which doesn't allow them the cut to which they believe they are entitled. I'd like to see what the BPI's head, Geoff Taylor, has to say to George Barnett, the unsigned British songwriter whose fanbase skyrocketed after being featured on The Promo Bay. The only thing that the BPI has done for George is to entirely prohibit his primary means of exposure.

Of course, those aren't the only choice words Dan has for the BPI.

Big thanks to El-P, Amanda Palmer and Dan Bull for stopping by and sharing their thoughts! For some other creators featured on Techdirt this week (just not in person), check out game developer Stardock's Jon Shafer on building a loyal fan base, producer Swizz Beatz on embracing technology, My Bloody Valentine's Kevin Shields on a dispute with Sony, and author Paulo Coelho's stats on his $0.99 ebook sale.

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Musicians' Manager Says SOPA & PIPA Are Not What Musicians Need

Mike Masnick — Wed, 14 Dec 2011 08:54:38 PST

It's always nice to find musician managers who are willing to speak out when the record labels are pushing for bad laws. Ryan Chisholm, a manager at Bill Silva Entertainment, has penned a guest column for Billboard where he argues that SOPA and PIPA are not the way to help musicians:

The music industry already has a poor rapport with many consumers. SOPA/Protect IP only adds fuels the fire of those disgruntled (and web-savvy) listeners who are pissed off that we in the industry can't all get on the same page to agree on deal points to establish a consumer-friendly, legitimate marketplace that rewards creators, rightsholders and fans alike. Worse still, SOPA/Protect IP could make it harder for tomorrow's innovative services to be developed. Today, we are only beginning to realize the potential of sites like Facebook, Twitter, YouTube, SoundCloud - along with numerous popular blogs and thousands of music sites - in driving discovery of and monetization around music. These platforms have become some of the greatest tools we in the business have ever had at our disposal. These sites provide fans the opportunity to participate more directly and meaningfully in the content provided by artists and rightwsholders. In their current form, SOPA/Protect IP give far too much leeway for legitimate expression to be silenced on the grounds of combating infringement. This affects far more than the entertainment industries.

Elsewhere he points out -- as we have -- that the best way to fight infringement is to offer better legitimate services, but SOPA and PIPA don't help in that endeavor at all. Those are definitely important points that many of us have been making for quite some time... but unfortunately, these points seem to be entirely excluded from the discussion over these bills.

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Last Chance For Musicians To Contribute To The Artist Revenue Streams Project

Mike Masnick — Thu, 20 Oct 2011 22:24:37 PDT

Earlier this year, we noted that the Future of Music Coalition was putting together a fascinating project to try to catalog all the different ways that artists are really making money today and to dig into the details of what that means for artists. It's a wonderful project and I'm excited to see the results. The project is almost over and I wanted to do a quick post making sure that any musicians (US-only, I'm afraid) don't miss out on their chance to take part. The FMC folks have put up a post over at Step2 explaining the details (and, yes, FMC is a sponsor of Step2) if you want to understand what this is all about. Or you can just go straight to the survey. Just do it before October 28th.

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Apparently The Creative Class Is Dead Because No One Works At Tower Records Any More

Mike Masnick — Mon, 10 Oct 2011 10:34:08 PDT

I honestly had to read Scott Timberg's column at Salon, called "The creative class is a lie," a few times before I was sure that it wasn't satire, and he actually believes the ridiculous things he wrote up. The article mainly tries to pick up on the ideas of Richard Florida, who has been arguing about the importance of "the creative class" in driving the US economy. According to Timberg, the creative class is disappearing. Now, we can debate whether or not that's actually true (and the evidence we've seen suggests the opposite), but the evidence presented by Timberg isn't evidence at all. It's arguing something completely different:

It’s happening at all levels, small and large. Record shops and independent bookstores close at a steady clip; newspapers and magazines announce new waves of layoffs. Tower Records crashed in 2006, costing 3,000 jobs. This summer’s bankruptcy of Borders Books — almost 700 stores closed, putting roughly 11,000 people out of work — is the most tangible and recent example. One of the last video rental shops in Los Angeles — Rocket Video — just announced that it will close at the end of the month.

I keep reading this paragraph over and over again, and it gets no less insane each time. Since when were the folks who work behind the counter at Tower Records and Borders "the creative class?" As far as I can tell, Timberg appears to be arguing that when the people who made buggy whips were put out of work, it demonstrated the death of the transportation industry. He's honestly arguing that the end of incidental jobs, related to an obsolete technology or system, represents the end of an entire industry -- while completely ignoring the (large and growing) entirely new system that has taken the place of the obsolete one. That's ridiculous.

Does he mention that for actual musicians and actual writers there are now many more ways to create, distribute, promote and make money? No. That would involve actually knowing what's going on. He complains about young authors and musicians "struggling through the dreary combination of economic slump and Internet reset." But, was there ever a time that the vast majority of young authors and musicians were not "struggling"? The adjective "starving" typically comes before "artist" for a reason. And the reality is that in the past it was much more difficult to make a living as an author or a musician, because the only way to succeed was to get chosen by one of a very small number of gatekeepers -- the record labels or the big publishers -- and then even after that you'd have to be one of the approximately 10% of creators they sign who they actually decide are worth making successful. Most musicians and most authors -- even those who sign to major labels and publishing houses -- still end up struggling economically. That's always been the case. Pretending that it's something new is a lie.

If Timberg were paying attention, he'd realize that the opportunities for musicians and authors today are much greater, because they don't have to be chosen by the big gatekeepers. They can put out music themselves and monetize it via any number of new and useful DIY platforms, from Bandcamp to Tunecore to Topspin and onwards. And authors have the same opportunity. They can put up their own websites and do self-publishing via Amazon or Lulu. And there are a growing number of success stories of such "direct-to-fan" campaigns in both industries -- people who would have been completely trampled and never accepted by the old industry.

And because of this, we're seeing a massive revival of cultural creativity. And that's because it's not limited to just a few gatekeepers and tastemakers, but everyone can contribute to "the creative class," and people can find their niche and find their audience. It's an amazing era of cultural output... and yet Timberg is missing it all because he's expecting to find it in the counter jockey at Tower Records?

Apparently this is a start of a new "series" from Timberg on Salon to investigate "the hollowing out of the creative class -- its origins, its erosion, the price of 'free,' and offer possible solutions and reasons for hope." But there's a problem there. The very assumption that underpins the entire series is false. If anything, the evidence suggests we're seeing more creativity than ever before. More output. And it's not just amateur content. The size of the creative industries continues to grow, and the opportunities for struggling artists to make a living have never been greater -- in large part because the internet that Timberg doesn't seem to know about has provided the tools to break down the gates and enable large segments of these folks, who never could have made any money at all, to now make significantly more.

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After Watching This Video, Can Anyone Say That Remix Isn't An Act Of A Musician?

Mike Masnick — Tue, 19 Jul 2011 12:25:05 PDT

One thing we hear all the time from folks who dislike remixes or mashups aren't "real" music is that a computer isn't a real "instrument." However, when I see and hear artists like Girl Talk, Kutiman and Pogo, I can't see how anyone with any ounce of intellectual honesty can claim that these are not true musicians in every sense of the word. And yet, people still argue that they're not, saying that sitting at a computer cutting up sounds isn't the same thing as playing a real "instrument." But... I point out that if someone is sitting at an electronic keyboard and pressing the keys, all they're really doing is playing a sound created by someone else. Is that really all that different than mashing up sounds played by someone else? What if you take things a step further and program clips of other songs into a keyboard and have someone play it?

Step on up, Madeon. While it's not a keyboard directly but (perhaps more impressively) a Novation Launchpad, this 17-year-old recently released this incredible video of him mashing up 39 of his favorite songs into one song... live. I defy anyone to claim that what he's doing here is anything less than a musician playing a keyboard or guitar: Just like a musician, he's using an instrument and the sounds that it makes to create something new and wonderful.

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RIAA Accounting: How To Sell 1 Million Albums And Still Owe $500,000

Mike Masnick — Thu, 7 Jul 2011 11:32:37 PDT

Last year, we had a post on RIAA accounting, detailing how labels screw over many musicians, even some of the best selling ones, such that they never actually make a dime in royalties. Bas points us to an excellent 14 minute video from lawyer Martin Frascogna, entitled How To Sell 1 Million Albums and Owe $500,000: It definitely covers a lot of the same ground (in fact, his advance numbers and sales numbers match up exactly with the numbers we quoted last time from Courtney Love), but it also delves into some of the sneakier aspects of record label contracts with musicians -- things that many musicians simply won't know about or understand when they sign their contract. Using those points, he breaks down how a band might think it's getting royalties on $20 million worth of sales but then find out that, thanks to some of these fun tricks, the basis for calculating the royalty takes that number all the way down to $4.9 million (and then with a 10% royalty, the official take is $490,000 -- but if the advance is $1 million... the band still technically "owes" $500,000).

And, as we noted in the post last year, don't think that because a band goes "unrecouped" that the label loses money on them. The "recouping" only comes from the 10% royalty rates, which are really much, much lower (in this example, the "real" royalty rate is more like 2.5% due to the clauses in the contract). That leaves 97.5% of the money in play. Obviously, some of that is covering costs and expenses. But there's plenty of cash that makes its way into the label's bank account, when an album sells $20 million.

As for what kinds of tricks the labels use, well, Frascogna notes "breakage fees" of 20%, which are based on breakage rates for vinyl from half a century ago. That CDs don't break so much and that digital files don't break at all, doesn't matter. The labels still try to get a super high breakage rate that they get to deduct. For them, it's pure profit. Then there are "uncollected account" withholdings, on the basis that some retailers go bankrupt and don't pay for the stock they had. The way it's described here, that's often just a set number, rather than based on any actual, documented cases of uncollected fees. Next up? "Free goods." Now, we talk about the importance of free goods all the time. But here it's used in a different manner. Basically the labels deduct the "cost" of providing reviewers/radio stations/etc. with "free" copies of your album. That money comes straight out of the gross that the royalty is calculated on. The fact that you could just email the mp3 to those folks yourself? Well, pay no attention to that newfangled technology.

Next up, there are "container charges." That's for things like the jewel cases and inserts for CDs. Again, the fact that digital music doesn't have such expenses is pretty much ignored. Also, the fact that all of these expenses get deducted from the artists' share? That also seems wrong. Even more insane? Apparently the standard "container charge" is an additional 30% off the revenue. Again, in many cases that's just pure profit for the labels.

Finally, there's the ever lovely and totally amorphous "reserves." As Frascogna notes: "no one really knows what reserves entail." It's basically a blank check for the record labels to claim they have to keep some of the money themselves for "other stuff," which is mostly undefined. In this case, some labels simply set a straight percentage, up to 20% more of the gross that artists never get to see as part of their own royalties.

Bring all that together, and the 10% royalty looks more like a 2.5% royalty, and that's not enough to even get halfway to recouping even if you sell 1 million albums at the high high price of $20/album. And that doesn't even touch on splitting up any money you get between band members and paying the manager/agent, etc. When you dig in to things like this, you can understand how artists like Lyle Lovett can say they've sold 4.6 million albums and never made a dime in royalties from album sales.

Now, many of these points can be negotiable if you're knowledgeable about them. But many artists sign such contracts without realizing what that fine print really means -- and that's just what a lot of the labels are counting on.

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New Study Shows Many Artists Think File Sharing Helps, Not Hurts

Mike Masnick — Fri, 15 Apr 2011 07:32:24 PDT

With the Dutch government introducing draconian anti-copyright policies, the government also decided to survey musicians, and the results were somewhat surprising. Many, many artists did not think that file sharing harms them, with plenty believing it helped. It appears there was a big age factor in the results -- with younger artists being much less concerned about file sharing than older artists. Only 28% of artists asked believed that file sharing hurt them financially. And slightly over half of artists surveyed claimed that file sharing helps them build an audience by getting their work more widely known.

You would think, then, that this would push back against the government's new copyright policies, but apparently, it does not.

Of course, some will also point out that even though these artists claim that file sharing isn't harming them and that it's often helping them... the majority still believed in DRM and stricter enforcement against infringement. That seems like a bit of a conundrum, and it appears the government basically just focused on this latter point, rather than the earlier points. But, it's really not too surprising. If you ask someone: do you want a government-granted monopoly privelege and/or a method for limiting competition, many will say yes. Even with empirical data that they're better off without it, it's difficult for people to give up government protectionism... But that's no reason to just grant such protectionist policies. It makes sense to see if a sugar monopoly actually benefits the overall production of sugar in a country. It does not make sense to ask the sugar monopolist if they need a sugar monopoly.

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A Million Dollar Record Deal Is Probably Not What You Think It Is

Mike Masnick — Thu, 22 Jul 2010 12:04:19 PDT

Our recent post on recording industry accounting got plenty of attention, and it appears that more and more media sources are bursting the bubble of the myth of major record label deals. The latest is the BBC, which has a story about how a £1 million record deal isn't quite what most people think it is. Apparently, over in the UK, they throw around "£1 million record deal" like they throw around "$1 million record deal" in the US (despite the fact that the actual amounts are pretty different), and people think it sounds impressive. But, of course, as we've already noted, it's not really that impressive. Most of that money goes towards other stuff, and then the label keeps taking money that you earn to "recoup" the advance, even as it's taking most of your album sales revenue directly for itself anyway (and not counting that towards the recoup).

The article highlights a guy who won one of the big UK TV music competition shows... but has already been dropped from his label despite selling 500,000 singles and having a top 5 album in the charts. The final quote in the article basically highlights how a million dollar/pound recording deal really doesn't mean anything at all:

"What record companies are actually saying when they offer a £1m record deal is, 'we're going to pay the basic costs and, as long as you make it very quickly, then you can make a lot of money'.

"But you're going to have to make it very quickly.

"Now it seems to me that, if you don't make it in five minutes or on The X Factor, then you don't make it."

So there you go. A million pound/dollar recording deal covers your basic costs, and if you don't make it back in about five minutes, then you're basically a lost cause. Once again, those "big" record deals aren't looking so hot any more, are they?

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Don't Dismiss Musicians Who Forge Their Own Path

Mike Masnick — Thu, 15 Jul 2010 13:12:00 PDT

We recently wrote about Tom Silverman's interview where, in the course of "predicting" the future of the music business, he took some potshots at services like TuneCore for being just for "hobbyists." In that article, he basically said that TuneCore users were just "clogging" the system:

80 percent of all records released are just noise -- hobbyists. Some companies like TuneCore are betting on the long tail because they get the same $10 whether you sell one copy or 10,000. Who uses Photobucket and Flickr? Not professional photographers -- those are hobbyists, and those are the people who are using TuneCore and iTunes to clutter the music environment with crap, so that the artists who really are pretty good have more trouble breaking through than they ever did before.

As I noted in my original post on the interview, I thought Silverman was making a big mistake in dismissing those "hobbyists," since a bunch of them seemed to be making a decent living -- and the numbers were growing. I also found the "crap" comment to be pretty obnoxious. We see that type of comment here all too often. We'll point to some unique content creator who is doing something impressive, and the response (often from angry industry insiders) is that "yeah, but the content is crap." It's a funny sort of reaction. It's as if these people are so afraid that others with better business models will drive them out of business that they need to pre-emptively mock the quality -- even if the content seems to be exactly what a certain market is looking for. There are lots of content creators that we talk about whose content I don't personally care for. But my personal opinion on the quality of the content is meaningless. It's a question of personal tastes, and if there's an audience for the content, then, clearly something's working right.

I wasn't the only one who felt that the "cluttering with crap" comment was out of line. TuneCore's Jeff Price (who has been having quite a back-and-forth with Silverman lately) issued quite the sarcastic apology, while mocking the idea that only Silverman gets to decide what is quality music:

We're sorry that the fact that people are buying music from TuneCore Artists is stopping people from buying music that Tommy likes. If Tommy could only control what music you get exposed to you would be more inclined to buy his music. It's actually a brilliant strategy: limit choice, force the releases you want to sell down people's throats, control what music is exposed by the media outlets (like radio and MTV) and then take all the money from the sales that come in. Oh wait, my mistake, that's the way it was in the old music industry, and 98% of what the majors labels released failed. I guess limiting choice does not make music sell.

Price also points out that Silverman's claim that this is "clogging" the market is ridiculous. It's not like people can't find what they want. If that's a problem, it's a problem of filters, not a problem of too much music. I tend to listen to some fairly obscure music in some specific genres, and sure there are acts in those areas that I don't think are very good, but it's pretty easy to quickly figure out who is good and who is not and move on. Claiming that "bad" artists somehow hurt good artists is ridiculous. You hear it all the time in various industries, but it's the same silly story all over again. More content creators don't take anything away from good content creators. Good content creators can and do still thrive.

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RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales

Mike Masnick — Tue, 13 Jul 2010 09:06:27 PDT

We recently had a fun post about Hollywood accounting, about how the movie industry makes sure even big hit movies "lose money" on paper. So how about the recording industry? Well, they're pretty famous for doing something quite similar. Reader Jay pointed out in the comments an article from The Root that goes through who gets paid what for music sales, and the basic answer is not the musician. That report suggests that for every $1,000 sold, the average musician gets $23.40. Here's the chart that the article shows, though you should read the whole article for all of the details:

Source: TheRoot.com
Of course, it's actually even more ridiculous than this report makes it out to be. Going back ten years ago, Courtney Love famously laid out the details of recording economics, where the label can make $11 million... and the actual artists make absolutely nothing. It starts off with a band getting a massive $1 million advance, and then you follow the money:

What happens to that million dollars?

They spend half a million to record their album. That leaves the band with $500,000. They pay $100,000 to their manager for 20 percent commission. They pay $25,000 each to their lawyer and business manager.

That leaves $350,000 for the four band members to split. After $170,000 in taxes, there's $180,000 left. That comes out to $45,000 per person.

That's $45,000 to live on for a year until the record gets released.

The record is a big hit and sells a million copies. (How a bidding-war band sells a million copies of its debut record is another rant entirely, but it's based on any basic civics-class knowledge that any of us have about cartels. Put simply, the antitrust laws in this country are basically a joke, protecting us just enough to not have to re-name our park service the Phillip Morris National Park Service.)

So, this band releases two singles and makes two videos. The two videos cost a million dollars to make and 50 percent of the video production costs are recouped out of the band's royalties.

The band gets $200,000 in tour support, which is 100 percent recoupable.

The record company spends $300,000 on independent radio promotion. You have to pay independent promotion to get your song on the radio; independent promotion is a system where the record companies use middlemen so they can pretend not to know that radio stations -- the unified broadcast system -- are getting paid to play their records.

All of those independent promotion costs are charged to the band.

Since the original million-dollar advance is also recoupable, the band owes $2 million to the record company.

If all of the million records are sold at full price with no discounts or record clubs, the band earns $2 million in royalties, since their 20 percent royalty works out to $2 a record.

Two million dollars in royalties minus $2 million in recoupable expenses equals ... zero!

How much does the record company make?

They grossed $11 million.

It costs $500,000 to manufacture the CDs and they advanced the band $1 million. Plus there were $1 million in video costs, $300,000 in radio promotion and $200,000 in tour support.

The company also paid $750,000 in music publishing royalties.

They spent $2.2 million on marketing. That's mostly retail advertising, but marketing also pays for those huge posters of Marilyn Manson in Times Square and the street scouts who drive around in vans handing out black Korn T-shirts and backwards baseball caps. Not to mention trips to Scores and cash for tips for all and sundry.

Add it up and the record company has spent about $4.4 million.

So their profit is $6.6 million; the band may as well be working at a 7-Eleven.

And that explains why huge megastars like Lyle Lovett have pointed out that he sold 4.6 million records and never made a dime from album sales. It's why the band 30 Seconds to Mars went platinum and sold 2 million records and never made a dime from album sales. You hear these stories quite often.

And note that those are bands that are hugely, massively popular. How about those that just do okay? Remember last year, when Tim Quirk of the band Too Much Joy revealed how Warner Music made a ton of money of of the band's albums, but simply refuses to accurately account for royalties owed, because the band is considered unrecoupable. Sometimes the numbers even go in reverse. If you don't understand RIAA accounting, you might think that if a band hasn't "recouped" its advance, it means that the record labels lost money. Not so in many cases. Quirk explained the neat accounting trick in a footnote to his post about his own royalty statement:

A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $395,214.71 after that $62.47 digital windfall), this doesn't mean Warner "lost" nearly $400,000 on the band. That's how much they spent on us, and we don't see any royalty checks until it's paid back, but it doesn't get paid back out of the full price of every album sold. It gets paid back out of the band's share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let's say Warner Bros. spent something like $450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $10 each, they would have earned back the $450,000. But if those records were retailing for $15, TMJ would have only paid back $67,500, and our statement would show an unrecouped balance of $382,500.

I do not share this information out of a Steve Albini-esque desire to rail against the major label system (he already wrote the definitive rant, which you can find here if you want even more figures, and enjoy having those figures bracketed with cursing and insults). I'm simply explaining why I'm not embarrassed that I "owe" Warner Bros. almost $400,000. They didn't make a lot of money off of Too Much Joy. But they didn't lose any, either. So whenever you hear some label flak claiming 98% of the bands they sign lose money for the company, substitute the phrase "just don't earn enough" for the word "lose."

So, back to our original example of the average musician only earning $23.40 for every $1,000 sold. That money has to go back towards "recouping" the advance, even though the label is still straight up cashing 63% of every sale, which does not go towards making up the advance. The math here gets ridiculous pretty quickly when you start to think about it. These record label deals are basically out and out scams. In a traditional loan, you invest the money and pay back out of your proceeds. But a record label deal is nothing like that at all. They make you a "loan" and then take the first 63% of any dollar you make, get to automatically increase the size of the "loan" by simply adding in all sorts of crazy expenses (did the exec bring in pizza at the recording session? that gets added on), and then tries to get the loan repaid out of what meager pittance they've left for you.

Oh, and after all of that, the record label still owns the copyrights. That's one of the most lopsided business deals ever.

So think of that the next time the RIAA or some major record label exec (or politician) suggests that protecting the record labels is somehow in the musicians' best interests. And then, take a look at the models that some musicians have adopted by going around the major label system. They may not gross as much without the major record label marketing push behind them, but they're netting a whole lot more, and as any business person will tell you (except if that business person is a major label A&R guy trying to sign you to a deal), the net amount is all that matters.

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RIAA Insists That Musicians Can't Make Money Without The RIAA

Mike Masnick — Tue, 13 Apr 2010 07:33:00 PDT

Ah, the RIAA blog. It's a never-ending source of entertainment. In the past, they've tried (and failed) to address some of my arguments directly, but as someone noted, one of their recent posts again appears directed my way (not just me, but a few others as well). In it, the RIAA tries to suggest that alternative business models can't possibly work. Since many of the arguments the RIAA tries to debunk sound sorta like the arguments I make, it seemed worth responding -- especially given how badly out of context the RIAA takes them in an effort to convince itself that it's still necessary. Let's start with the title:

IS TOURING ALONE ENOUGH?

First of all, there aren't that many folks who claim that touring alone is enough of a business model, and the rest of the post doesn't focus on "touring alone," but on a variety of alternative business models, which makes it a weird and entirely misleading title. In fact, a year ago, we explained why (just like the RIAA is pointing out) touring alone probably isn't enough to replace the revenues of the recording industry -- but that if you combined touring with other business models, it certainly could work quite well. But by using "touring" as the peg, the RIAA can debunk touring alone and pretend (falsely) that it's debunked the entire space of alternative (smarter) business models. Neat trick, but easy to see through.

Some industry observers like to suggest that efforts to address the theft of music online are somehow tantamount to efforts to maintain an "outdated business model" rather than to address forms of unfair competition based on illegal acts.

Now, I am one such "industry observer" who has pointed out that the RIAA has made a Herculean, if ultimately self-defeating, effort to maintain its outdated business model. But that has nothing to do with "theft of music online." It has to do with the changing economics of creating, promoting and distributing new music. Some of that may involve some amount of copyright infringement, but the business model of the RIAA was outdated even in the absence of infringing uses -- and, of course, such infringement is not and never has been theft. Of course, the RIAA knows this, but this blog is a weak attempt at painting itself as a victim, after decades of denying musicians money that it actually owed them. So, the best they can do is pretend that these new technologies represent "theft." Weak.

The suggestion is there are ample alternative mechanisms for generating revenues from music -- money from touring, selling merchandise like t-shirts, licensing music for commercials.

Yes. Indeed. But it's not a suggestion. There's a fair bit of evidence to support that. In fact, we've shown multiple studies from multiple sources and multiple locations all showing this is true. So, it would take quite a debunking from the RIAA to prove this wrong. But, of course, the RIAA doesn't do so. Because it can't.

Completely ignored are the pleas for enhanced copyright protection from artists and unions

A bit of a non sequitur, but not ignored at all. In fact, it's no surprise that artists and unions would want gov't-backed monopolies that mean they have to work less hard to obtain royalties. Who wouldn't want that? But a bunch of self-interested folks begging the gov't for protectionist policies is hardly evidence that copyright isn't being abused to prop up an outdated business model. If anything, it supports that view even more.

Instead the handful of established artists for whom Internet anarchy works as an effective marketing tool are cited.

Wait. That's just a lie. For years, we pointed out unsung artists who were making this work -- artists like Maria Schneider, and in response folks like the RIAA told us that "sure, this model might work for no names who have nothing to lose by giving away their works, but it'll never work for the big artists, like those we represent." Yet, now that it is working for those artists too, the RIAA wants to pretend it only works for them? Nice try, guys. But, as we've demonstrated over and over and over again, with a large and growing list of artists (not just "a handful"), this model works for artists up and down the music food chain. The RIAA says it only works for "a handful of established artists" but doesn't explain the success stories of folks like Corey Smith, Motoboy, Matthew Ebel and others who were hardly "established" when they began using these methods for their own success.

No one has ever said that everyone can succeed with them. However, one thing we have seen is that pretty much every artist who has embraced these models and principles has done better than they did trying to go about things the old way. Those who were on big labels found that they made more money this way. Those who weren't on big labels also found they made more money this way. And, we're not saying this is anti-label. There are lots of smart music labels that are embracing these principles as well. Just not the ones who run the RIAA.

Even more importantly, the reality of the marketplace is ignored in favor of theory.

There's only one party in this conversation ignoring "the reality of the marketplace... in favor of theory," and considering that we've posted numbers on most of the artists we've talked about, and the RIAA is best known for either not sharing or totally making up numbers, take a wild guess who's in reality and who's focused on "theory."

While touring and merchandise sales will work for some bands -- most notably big bands that "made it" in the 80's, 90's or earlier (and built on the back of touring support from music labels) -- it is exceedingly challenging for other bands to generate sufficient income just from touring, and touring support from the labels is rapidly disappearing.

See what the RIAA did there? Now it goes back to pretending this is just about touring. Of course, it's not. Most of the models we discuss don't focus just on touring.

Check out this article in BBC News about UK rock band Doves. And of course, without brand/name recognition, merchandise sales are commercially irrelevant.

That BBC article is quite one-sided, and basically says that the labels aren't providing tour support any more. And that proves what? It proves that the RIAA itself is screwing this up, by not supporting one part of the business that is making lots of money. I'm not sure what that proves other than that the RIAA is really bad at figuring out how to adapt to the changing world.

But, more to the point, the idea that bands can't tour without support from a major label is just silly. There are all sorts of new and more efficient ways for bands to find gigs and create tours. Sites like Eventful, SonicBids, Songkick and lots of others are making all sorts of useful tools around touring, that make it possible to do shows on a much more efficient and cost-effective basis. Yes, the big labels provided lots of money for tours in the past -- and they did so in a wasteful manner. But rather than become more efficient, now they're just hoarding their cash and blaming everyone else!

As for the lack of "brand/name recognition" making it impossible to sell merchandise, that's true. But the RIAA seems to be implicitly stating that the only way to get brand/name recognition is through a big RIAA label. Yet, the examples we've shown over and over again have focused on musicians figuring out how to connect directly with fans themselves. Without the need for massive marketing from the RIAA.

One last question: how is generating revenue from licensing of music to sell other products more socially useful than the sale of music itself?

Ah, yes. The "socially useful" question. It sounds great, but is entirely meaningless. After all, how is generating revenue from smelly automobiles that break down more socially useful than selling horses and buggies? Or, perhaps a more apt comparison: how is having all your phone calls connected directly more socially useful than having operators manually connect each call? Social utility doesn't matter. Economics doesn't care about social utility, and in the long run, in every single case, people tend to discover that there is more social utility in embracing progress rather than denying it.

Cars became more socially useful than horses and buggies by making travel more efficient and faster -- even if it hurt those who relied on the old system (horse shoers and buggy whip makers, for example). Automated telephone switching created a much better phone system, and other advancements including the internet -- even if it meant a lot of operators lost their jobs. And generating revenue from alternative means by selling other products is more socially useful than the sale of music directly because it's more efficient. It allows for less expensive creation, promotion and distribution of music -- meaning it brings more music into the world, helps more people hear more music more quickly for less cost -- and, in doing so, opens up tons of more efficient and socially beneficial business models.

Besides, isn't it just a little ridiculous for the recording industry -- who has filled landfills with non-degradable plastic discs to start talking about how "socially useful" its business model is?

It seems to me that this is the worst of all worlds, one in which all artistry will not be rewarded -- and one in which only music that works well in selling diapers and cars will be commercially produced. Is this supposed to sustain the diversity of music that we want? Would we have Bob Dylan, Leonard Cohen, Patti Smith, the Sex Pistols under this kind of system for compensating artists? Not remotely.

Ah. and now the shift. Suddenly the RIAA is pretending that this is all about product placement and commercial licensing. Except, it's not. And, uh, last I checked, Bob Dylan was shilling for Victoria's Secret, so apparently, he's perfectly happy with such a system.

Exactly what kind of product licensing would have sustained the Smiths or Nirvana? Was there anything on Springsteen's first record that would have drawn the attention of advertising companies? In fact, we never would have had Elvis (either one)! This is an alternative universe in which I would not care to live.

Now this is rich. This from an industry that kicked all sorts of fantastic bands to the curb, because their music "wasn't commercial enough" for the major labels... and now it's complaining about how music will be "too commercial" under this new system? Except, of course, that's not true. If you listen to the music from different artists who have embraced these models, you'll find all kinds of music -- and much of it isn't commercially driven at all. In fact, that's why fans like it so much, because it's not being programmed by some exec in New York, but directly between the musicians and their fans.

Sorry, RIAA, you are protecting an obsolete business model, no matter how much revisionist history you cite and how many out of context arguments you make. Of course, we're more than willing to help your members figure this stuff out. They can just give us a call. In fact, more than a few already have. This might explain why they're questioning the value of continuing to be members of the RIAA.

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UK Musician's Open Letter To Musicians Union Over Its Support Of The Digital Economy Bill

Mike Masnick — Fri, 9 Apr 2010 09:46:00 PDT

With the passing of the Digital Economy Bill in the UK, many musicians are quite upset -- even though the law is supposed to be about "protecting" them. Musician Steve Lawson, a member of the Musicians Union (which supported the bill), has written a brilliant open letter to the organization, explaining why he was upset about their position, and considering leaving the group. Here's just a snippet, but the whole thing is worth reading:

The BPI wrote the bill as a protectionist measure of an outdated and unworkable business model. It was a model that was NEVER to the advantage of musicians who cared about the music they played and the culture it existed in, but one that made sense at a time when physical distribution was required to reach anyone, and the costs involved were prohibitively high. At that point, labels lying to musicians about how much they dig the music, while making a fortune for themselves but still never "recouping" on the album was deeply unpalatable but a necessary part of recording and releasing music.

All the costs have dropped. I've written extensively about this -- most notably here -- but nothing has changed in the industry. They still spend money on the behalf of musicians, pay themselves that money, recoup it (AGAIN) and own the product at the end. None of that is remotely to our advantage.

....

So, the premise of the bill -- that the situation is desperate -- was spurious. The figures quoted for industry 'losses' are insane. Utterly nonsensical if mapped against spending trends on 'physical and download entertainment media' -- we are part of a much bigger entertainment industry now that we ever were, and we don't dominate it in the way we did from 1956 to 1998. Games and DVD are a bigger part of it than ever. And entertainment spending continues to rise. So 200 million hasn't been 'lost', it's being spent elsewhere. Meanwhile, the cost of making and distributing records is tiny, and download sales go up and up.

How you can see that as a situation that needs legislating is utterly beyond me. To shut down sites and services on suspicion of illegal activity is a civil liberties travesty. To have my internet traffic monitored 'in case I do anything bad' is like the royal mail reading my post, in case my letters contain naughty words. While threatening to brick up my front door if they find them, or think they might have found them.

It's great to see musicians realizing that just because the bill's backers claim it's in their interest that this is not necessarily the case -- and that it could very much go against their interests.

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Record Labels Put Out Report Insisting That Record Labels Do, In Fact, Invest In Musicians

Mike Masnick — Mon, 15 Mar 2010 05:43:17 PDT

With the debates ongoing over where the music industry is heading, it's been amusing to watch the major record labels try to remain relevant. One talking point they've hit on lately is this idea that record labels are the only ones who invest in artists. So, for example, when we point out that multiple studies have shown that more money is being spent on music today -- just that it's going to other providers, rather than the record labels -- we've heard people come back by saying "but only the record labels invest in artists." Perhaps sensing a valuable talking point (and getting sick of claims from many in the industry that the labels have seriously cut back on investing in new artists), the IFPI has put out a report that basically is the major record labels screaming "hey, look, we do invest in new music!"

But, of course, no one really doubted that the major labels still invested in music, but lots of people are questioning how that money is being spent and what sorts of results they're getting from it. But where it gets funny is that the IFPI tries to use this to prove that labels still have a place, because, apparently, no one else could possibly fund musicians:

"Investing in music is the core mission of record companies," says [IFPI] boss John Kennedy. "No other party can lay claim to a comparable role in the music sector. No other party comes close to the levels of investment committed by record companies to developing, nurturing and promoting talent."

To which we would just add a rather important: yet. The labels still seem to think they have some divine right (or, perhaps it's just a gov't granted monopoly -- the two are so easy to confuse) to be at the center of the music industry.

And, of course, the amount invested, by itself, is not nearly as important as the return on investment. It's easy to throw lots of money away (and having been to more than a few big record label events, I can attest to their ability to throw away vast quantities of money in no time flat). But what most folks are focused on is the actual ROI.

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Performers See Tiny Revenue From Streaming... But How Much Do They Make From Radio?

Mike Masnick — Thu, 4 Mar 2010 16:02:26 PST

Copycense points us to a Billboard/Reuters article over the fact that music performers are not making very much money from online streaming services. The article is designed to be "shocking," but seems to leave out some rather important facts. For example, in the US, if Billboard did the same calculation, it would find that performers make even less from radio. That's because performers make nothing from radio in the US, because Congress realized a while back that radio is advertising for musicians, and it seems ridiculous to force radio stations to pay musicians to advertise for them. In fact, the repeated stories of record labels illegally paying radio stations via payola showed that the market actually valued things in the other direction.

It seems quite odd that Billboard would leave this out of its analysis, instead, trying to position the streaming revenue as being so low as to be problematic. Yes, the numbers are low, but streaming radio acts as advertising for musicians that let's them make money in lots of other ways.

This is the same discussion we had last week when some people got too focused on the question of whether or not Spotify was making people buy more music. That's not the point. The point is whether or not streaming services make people buy more of anything that helps fund those musicians. Narrowly looking at just whether or not those streaming services pay musicians is really missing the point. It's like asking how much NBC paid BMW to air BMW commercials. The answer is nothing. The money went in the other direction, because that's where the real value was.

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The New Middleclass Musicians: I Fight Dragons

Mike Masnick — Mon, 8 Feb 2010 15:35:12 PST

Obviously, we've been covering various stories of content creators who are making use of new methods and new ideas to build a successful business model in a very changed world. We get lots of content creators contacting us about what they're doing -- but so many are doing cool things these days that just what they're doing is becoming less interesting than the details of how well they're working. So it's great to see Ariel Hyatt, over at Music Think Tank, provide a fascinating interview with Brian Mazzaferri, of the band I Fight Dragons. While I think the interview leans a little too much towards the concept of 1,000 True Fans (which I believe gets people way too focused on the "number" rather than the concept of true fans and how to build them), there is plenty of interesting information provided.

I also find it a little disconcerting that in what appears to be a clear success story, Mazzaferri seems to keep acting as if it hasn't been a success. He talks, repeatedly, about how difficult it is to build up enough true fans to be successful -- especially with a larger band (I Fight Dragons has six members). And yet, then he admits that the band is making enough money so that it's his full-time job. So clearly, the band has built up a strong enough fan base, combined with creative enough business models that it works. And they did this in less than a year! To me, that's really impressive, and it suggests the band has gotten off to a fantastic start. Yet, Mazzaferri keeps insisting that the 1,000 True Fan idea (and, again, I think it's a mistake to focus on the number) only works for a solo artist or a duo, while also admitting that as a band, they've probably only got closer to 500 true fans. It just feels like something is missing. Why is he so down on the concept when it appears to be working?

It's also interesting to see how the band has been making its money. He admits that for them, a lot of it has come from CD sales -- often CD sales done at live shows. He notes that because of the venue choices they've made, they don't make that much on live shows, but it has helped sell more CDs. But it does seem like the band realizes the benefit of offering really valuable scarcities like what we've seen work with other musicians as well -- and, of course, working hard to connect with fans through things like email and Twitter. When asked to break down where the money comes from, Mazzaferri highlights one unique offering that was a huge success for the band:

Making limited-edition, very high-value stuff is awesome. We sold 100 Lifetime Membership USB drives for $100 each (lifetime admission to any IFD show, free digital content for life), and that was a huge $10,000 boon for us.

All that said, it appears that he still thinks the only way to become a success today is to do a deal with a label -- and preferably a major one. I've always said that if bands don't want to really do what's necessary on the business side, there's nothing wrong with working with a label, though I think most musicians who end up signing a standard record deal may end up regretting it. It may speed up the ability to get attention, but it may make it more difficult to actually build a sustainable career. Oddly, he seems to suggest the opposite, noting:

My last big concern about the 1,000 true fans model is longevity. Most of the people using it work through the internet, and everything on the internet has an exponentially shorter shelf-life than it's Real Life corollary.

I just think there's very little data right now on how long an internet music career can last. Most traditional music careers, even people with a hit record, are lucky to last more than a decade, and so traditional music business literature says to make as much as you can while you're hot and save it up for when your career's over.

What's the new model for that? Is the expectation that an internet music career is longer than a traditional one? I suppose one could argue that, but it's a tough sell for me. The internet is fickle, and tastes change. I guess we'll see the truth of that as time goes on too.

The problem is that on a typical record label deal, things don't really work that way for most musicians, either. It may work for the top of the top -- the ones that catch on quickly and become big. But for the majority of bands that sign with a major record label, they fail to really get big enough to matter, and the labels very quickly drop all support and the band becomes yet another unrecouped wonder. That's not a sustainable model at all, and it's certainly not a model of "making as much as you can while you're hot," since many signed bands never actually get hot enough to really make that much money anyway. It seems like a bottom-up approach that relies on building a strong relationship with the fans has a lot more chance of being long-term sustainable than a career fueled by a sudden rush of major label hype, followed by being dropped into the obscurity bin.

While Mazzaferri may not be entirely happy with where the band is today and its prospects as an unsigned act, it still seems like this represents a pretty good example of the new sort of middle class of musician that couldn't have really existed in the same format not so long ago. In the past, the only way you could really get to the point where the band was your full time job was to get a label deal first and have them give you an advance. But by doing creative things like the "lifetime subscription" offering, I Fight Dragons has been able to reach that stage without having to sign a label deal. Now, it may, in fact, make sense for the band to now switch to a major label track, but I can't see anything in the band's experience that suggests that embracing a newer model of connecting with fans directly, and offering unique scarce reasons to buy, can't lead to a sustainable living.

Update: As is pointed out in the comments, just a few days ago, the band did, in fact sign with a major record label. This isn't surprising, given what Mazzaferri was saying in the interview, since he seemed to conclude he needed to do that, despite the evidence to the contrary. I wish them luck, but I've seen so many bands make similar statements when they first sign with a label:

"They were really interested in us from the get-go," singer Brian Mazzaferri tells The A.V. Club. "They're really interested in us keeping our creative control, as opposed to some other people, who were like, 'We really like what you're doing, but how 'bout we take out the chip tune?'"

I hope that's true, and I hope the were "really interested" in letting the band keep creative control, but so many of these stories end up poorly, with the band realizing that, once its signed, it loses pretty much all leverage on these issues. The article also suggests that this will mean the end of the band emailing out free tracks. This would be unfortunate, as it would be a mistake to go against what helped build your fan base.

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Responding To SoundExchange... By Their Numbers

Fred Wilhelms — Mon, 11 Jan 2010 10:55:00 PST

This is a guest post from Fred Wilhelms, a lawyer whose concerns about SoundExchange we recently wrote about. Due to the length of the post, we've put some of it after the jump, so you'll need to click through to read the whole thing -- but, trust us, it's worth it.

Back before New Years, Techdirt's Mike Masnick picked up on my comment to p2pnet.net regarding the list of artists SoundExchange said it couldn't find. I wrote that the list was not on the website. I was wrong about that, and Mike got suckered into repeating it. I went blissfully without the Internet for a couple weeks (yes, it is possible) and missed the whole thing. I just got it wrong. The list is there. I just couldn't find it.

My apologies, in order, to SoundExchange, Mike, and his readers. The list itself is a very interesting document on several levels, and I will be dealing with that later. This particular note has a specific purpose relating to Mike's piece.

SoundExchange folks like Director Dick Huey and staffer Laura Williams have been gushing all over about SoundExchange's new open communications policy. I have been trying to engage them in actual conversation, rather than simply criticizing their serial press releases. Their campaign seems to be faltering, however, as they've resorted to commenting on my supposed factual errors to third parties like Techdirt rather than deal with me directly. I don't mind. It's the tactic they've used with outside critics like me for years. It's arrogant, but what can we expect from an organization where the Board of Directors is hand-picked by the RIAA?

So, let me take this opportunity to deal with the "Top Ten Reasons Laura Williams Tells Techdirt Why I Am So, So Wrong About SoundExchange (But Won't Tell Me Directly)."

1. About the "missing" list of unpaid artists, I said it wasn't on the website. They said:

"Not sure how FW missed this. It's at http://soundexchange.com/performer-owner/does-sx-have-money-for-you/unpaid-artists/. It's been there all along, old website and new, and this version is easier to use than ever."

As noted before, I missed it.

There used to be a link directly from the homepage to the list, and a rolling counter of artists removed from the list. Those are gone. I used the search function on the site for "unregistered artists" (the term SoundExchange used to use to describe the entries on the list) and came up with nothing. I'm not sure how "easier" the list is to use, given that the alphabetizing scheme used by SoundExchange is even more idiosyncratic than the old one, but I will deal with the contents of the list, and what it means, separately.

All that aside, SoundExchange is right about this. I just missed the list.

2. About what happens to forfeited money, I said SoundExchange gets to keep the money. They said: "This is a common misperception about SX. While our congressional mandate allows us to liquidate funds after 3 years, the board has repeatedly declined to do so, in hopes of locating more artists to pay properly. EVEN IF THEY DID RELEASE FUNDS, those funds go directly to the artists and rights holders who are currently registered, in a windfall royalty - SX is a non-profit and does not keep that money."
There's a whole bunch of misdirection and spin going on in those 70 words.

There's no "congressional mandate." The forfeiture is permitted by Federal regulation adopted by the Copyright Office, specifically, 37 CFR 261.8. A regulation is not a "congressional mandate," although I admit that mandate stuff makes it sound like it is something SoundExchange has to do, rather than something that SoundExchange asked the Copyright Office to do for them, which is what really happened. SoundExchange wants everyone to think they are forced by Congress into taking money from artists they can't find, even if that really isn't so.

Perhaps SoundExchange wants everyone to think it is a matter of Federal law because they don't want anyone looking at the regulation itself. You see, the regulation requires that all money that should be paid to an unidentified or unlocated recipient be placed in a segregated trust account. I've asked SoundExchange repeatedly over the years to advise me where the "segregated trust account" is held, but the inquiries are always met with silence. I've also asked them to tell me how much money is in that segregated trust account. They've ignored that too. I don't think the segregated trust account exists, for the simple reason that SoundExchange doesn't have the slightest idea which artists are entitled to what share of the undistributed money.

About "repeatedly declining" to forfeit more artist money, they say this as if refusing to take money from people who don't know about it is an act of moral courage. They also say this as if they actually never intended to do it again, when history proves otherwise. In January, 2007, immediately after the deadline for the first forfeiture, SoundExchange announced they were going ahead with a second one. Strangely, for an organization that claims to be so vitally concerned with serving artists, they never mentioned the new forfeiture program anywhere but on the website page that linked to the list of unregistered artists. In other words, you had to already know they had your money in order for you to find out they were going to take it. There was not one press release announcing the forfeiture, and not even a notice about it anywhere on the website, or anywhere else for that matter. In blunt point of fact, SoundExchange "declined" to go through with the second forfeiture only because there was public outrage that they would do it again and try to keep it a secret. SoundExchange clearly wants everyone to pretend that they never really meant to try a second forfeiture. The problem is, they did.

I said SoundExchange gets to keep money it forfeits from unfound artists. SoundExchange disputes that and claims that "those funds go directly to the artists and rights holders who are currently registered," which is utter bull. As that regulation so clearly states, SoundExchange doesn't pay the money "directly" to anyone. They get to use the forfeited funds to defray their own expenses, which, when you come down to it, means they get to use it for their own purposes. Technically, SoundExchange doesn't "keep the money," so the "correction" is correct in a very strict literal sense. However, reality shows that they don't keep it because they spend it, which doesn't match up with what they say here.

Now, of course, if they reduce their own expenses, that makes more money available for distribution to registered artists and copyright holders because they have to take less out of the current receipts. That's a good thing, but reality tells me that there are a couple problems. First of all, anyone who has ever worked for a non-profit that must keep a lid on expenses can tell you that "extra" money that can be used to defray expenses tends to get used up pretty fast. In the case of SoundExchange, I can clearly imagine that the forfeited money financed a good part of the musicFIRST campaign for the terrestrial radio performance royalty. Secondly, take a look at what happens to whatever money does get through that "expense" process to be paid to registered recipients. As royalty money is split 50/50 between artists and copyright holders, and, by their own estimates, 70% of the copyright holder royalties goes to the four RIAA members who directly control six of the eighteen seats on the SoundExchange board (and who appointed the other twelve out of the goodness of their hearts), that means that 35 cents out of every forfeited artist royalty dollar goes to the four RIAA members. The one thing SoundExchange got right in its "correction" of my comment is the idea that this is a "windfall." I don't think they meant it the way it actually comes out, because the greatest windfall ends up in the lap of the RIAA labels, but they won't tell you that outright and if you ask them about it, like I have, they ignore you. Because they can.

If SoundExchange actually spent that forfeited money on improving their efforts to find the artists, like the language of the forfeiture regulation actually intends that they do, that would be fine. But they don't, and their "correction" of my comment is nothing but more smoke and mirrors to hide that.

Click the read more or comments link below to see the additional eight points Wilhelms raises in response to SoundExchange.

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Dear Rock Stars: Please Stop Claiming You're Just Interested In Helping Up-And-Coming Artists

Mike Masnick — Mon, 11 Jan 2010 09:53:00 PST

Remember a few months ago when we noted that all the heads of the major Hollywood studios had changed their tune, in the light of reports of yet another record box office year, to start claiming that movie piracy was harming indie movie producers, even as many of them had learned to embrace the internet to do quite well for themselves? It seems the same basic thing has been happening in the music business as well. We've already noted how folks like Bono and Paul McCartney have been heard complaining to the press about how piracy was harming up-and-coming musicians (noting they couldn't really complain given their success).

However, Steve Lawson, whose thoughts on the music industry we've discussed in the past, has penned something of an open letter to all these rock stars, noting that the up-and-coming musicians don't need their help:

So, dear Rock Stars -- the problem here is not with the internet. It's not with how it 'hurts' the little people. WE LOVE IT! It's you. You and your expectations of wealth-beyond-measure are screwed. And I don't care.

Here's a headline for you -- in the 3 weeks since I made 'Behind Every Word' available for free download, I've sold more CDs and downloads that in any one month since 6 months after it first came out.

This a four year old album. I've done no gigs in that time, I've taken out no ads, I've not given away a single bit of physical anything that cost me money. I've just talked about it, and invited people to listen to it. And guess what? They listened, and those who really liked it THEN PAID. And they paid more for the 'free' download they they do on iTunes.

I couldn't possibly have done it without 'free music', without the internet, without sharing, without streaming. Nor could I have done it within the insanely restrictive copyright terms of a standard recording contract.

Shane Richmond, who pointed Lawson's post out to me, notes that (of course) some will respond (as they always do, every time we post an example of a success story) that musicians like Lawson are "outliers" and successes on the margin. But, Richmond, notes, the true outliers are the folks like Bono and McCartney:

Steve -- and the growing number of artists like him -- will probably be dismissed as outliers taking a path that works for a lucky few but not for everyone. The thing is, that's true of the record industry too. A lucky few artists get rich while the majority are hoping just to break even before they have to give up their dreams and go and get a proper job.

Indeed. This is the very point that we've been trying to make so long. So many of the artists that we highlight as success stories would never have been successful at all without the internet and embracing what it allows. Because the old system was entirely about outliers. The traditional recording business was a lottery ticket. A tiny few made it. And everyone else failed. With what technology allows today, plenty of musicians will fail to make a living. It's no guarantee that anyone can be a success. But there are much greater opportunities, and (the best part) musicians have more control and say in how their careers go, giving them a greater chance to actually be successful on their own terms, not the terms of four large (but shrinking) companies, and the very small number of rock stars they helped succeed in the past.

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eMusic: Prices Went Up, But Artists Aren't Seeing Any Of That Cash

Mike Masnick — Thu, 7 Jan 2010 15:44:00 PST

You may recall quite a lot of attention paid last summer to eMusic's decision to raise prices at the exact same time that it added its first major label music (from Sony Music) to its service. This, understandably, pissed off a lot of people. Many people used eMusic because it focused on indie artists rather than the majors, and to find out that their prices were being jacked up to accommodate a major just didn't seem right. Of course, eMusic tried to claim that this was a "good thing" and also (har har) that the price increase had nothing to do with Sony. Even if true, announcing the two together was obviously a mistake. Of course, eMusic kept making things worse and worse by censoring critics (and then lying about doing so) while also quietly taking away features without letting people know. The whole thing was a mess.

Of course, if eMusic is charging more, you might think that at least the musicians who use the service are getting paid more. Think again. Musicians on eMusic are upset to discover that despite the price increase, they're still making the same amount. So now, not only has eMusic pissed off its users, but also musicians as well. At least Sony Music is happy.

This is really too bad. eMusic was a leader in offering DRM-free music, as well as a major supporter of independent music early on. It also had a reputation for being consumer-friendly and accessible to both customers and musicians. I guess all that is going out the window, though.

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SoundExchange Claims To Open Up, But Somehow Its List Of Unpaid Musicians Has Disappeared [Updated: List Found]

Mike Masnick — Tue, 29 Dec 2009 13:01:00 PST

Update: SoundExchange got in touch to respond to some of these points, please read the updates in the post and at the end.

SoundExchange, the collections group in charge of collecting and distributing money to musicians from a variety of different services (radio, satellite, webcasting, etc.), is technically a "spinoff" of the RIAA, but as many people who have dealt with SoundExchange will tell you, it's still tied at the hip with the RIAA. In fact, I was recently talking with someone who told the story of "negotiating" with SoundExchange, and was surprised to discover at the meeting that there was an RIAA representative who did all the talking. The SoundExchange guy stayed quiet.

Why the government has granted exclusive rights to this industry group to collect and distribute money to musicians is troubling enough. But it's made worse by the fact that if SoundExchange "can't find" musicians to give the money to, it gets to keep the money. Thus, for years there's been a struggle over the fact that SoundExchange seems to have incredible trouble finding musicians -- including some huge rock stars, and that means that SoundExchange, officially a non-profit, is holding on to a ton of cash (currently somewhere around $200 million). There are also questions about how SoundExchange has violated the law that created it, in order to lobby for even more rights to collect money from radio stations.

Based on all this, we've always had trouble taking SoundExchange seriously, so consider us skeptical now that the organization claims that it's going to be much more open and communicative and has launched a new website to help be more open. ~~Only problem? The big list of artists that SoundExchange can't find has gone missing~~ Update: Apparently this was a mistake by the lawyer criticizing SoundExchange who was unable to find the list, though it is still there. In the link above to P2Pnet, entertainment lawyer Fred Wilhelms goes through a variety of questions that SoundExchange hasn't answered, and he asks what happened to that list (while also noting how the list almost never seemed to change) Update: Again this appears to be an error on the part of Wilhelms, as the list is on the website:

The new website is a lot cleaner and easier to use, but there's one thing the old site had that the new site doesn't; the unregistered artist list.

As of now, there's no way for anyone outside the organization to assist in the effort to locate artists that SoundExchange has been unable to register since 2006. Despite your glowing reports on how many artists SoundExchange has been finding, you and I both know that, before the list disappeared, no names had been removed from the published list in over seven months, and only a couple dozen in the last 18 months. I'll take your subsequent assertion that the full and updated list will appear on the website at face value. Is there any schedule for that? Please don't tell me "soon." That's a devalued coin in the SoundExchange treasury.

Wilhelms also notes that for all of SoundExchange's claims to be "open" it's also conveniently not explaining how it determines who gets paid:

There's another thing that is missing from the new website which was repeatedly promised to me by John Simson and Neeta Ragoowansi; an explanation of how SoundExchange uses samples to determine which artists get what share of the royalty revenue when complete census data is not available. I was told two years ago that this information would be provided on the website, but I find that, not only is sampling not mentioned, SoundExchange continues to say things like "Get Paid When You Get Played." That's the header on the Featured Registered Artist page.

I have clients who have gotten a lot of play, but haven't gotten paid, and they've been told it was because their plays were not in the sample playlists provided by the webcasters who play them. Perhaps you can explain why SoundExchange has decided not to mention sampling on the website. I come back to related problems later on in this letter, but I would like to know if SoundExchange is ever going to explain how it samples, or even that it relies on sampling at all.

This is a big issue. As we've seen over and over again, many of these collections societies use sampling and counting methods that greatly overvalue big stars (who need the money less) at the expense of up-and-coming artists. It's like the poor get to pay the rich.

From there, Wilhelm's letter goes on in great detail responding to claims from SoundExchange and debunking them one by one. SoundExchange claims that they're now going to be much more open and respond to these types of questions. We'll be interested to see what they have to say.

Update: SoundExchange disputes many of the assertions in the post and in the letter from Wilhelm. I've corrected the one factually incorrect issue that we made -- the list was still there (though some in our comments argue it's now much more difficult to use). I'm not going to edit Wilhelm's letter, because that is his work, but SoundExchange disputes his claim that "sampling is not mentioned" by pointing to an FAQ response, and also disputes the issue of the list not updating by stating "We do not update the list on the website as it was a one-time release of artists who stood to lose money in a 2006 pool release (which was later cancelled in favor of ongoing efforts to find artists). This is clearly stated on the list. Names come off the unpaid list all the time, but the website list was a static, one-time release." Even though this is stated on the list, it seems like it would only make sense to keep the list current.

The other issues that SoundExchange has with the post are points of disagreement, but are not factually incorrect. It notes that while it can keep the money, it has not done so (though, leaves out the fact that this was due to publicity over the fact it was going to do so). SoundExchange also disputes the claim that it has "trouble finding artists," saying that the real problem is the rightsholders themselves, who fail to register. If that's the case, then it would certainly be useful to provide details on how many artists that SoundExchange holds money for that SoundExchange has contacted and then still failed to register. SoundExchange also insists that it has every right to lobby, but I'll link to the original article explaining why it seems likely that SoundExchange is in violation here. Finally, SoundExchange doesn't like being lumped in with other performance rights groups who use sampling methods which tend to favor large artists over smaller ones, saying it supports "census" data that would accurately account for all plays. Duly noted.

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Higher iTunes Prices? How Much Goes To The Artists?

Mike Masnick — Mon, 21 Dec 2009 15:32:51 PST

Earlier this year, Apple finally agreed to strong pressure from the major record labels to introduce variable pricing on iTunes -- which officially would make some popular songs $1.29 and (in theory) also offer older, back catalog songs for $0.69. In reality, it's pretty difficult to find any of those $0.69 songs. However, as a musician, which would you prefer? Well, as Shocklee alerts us, most musicians might not see any of that additional fee (that report is a little misleading, though, in that it suggests -- incorrectly -- that all songs were driven up to $1.29). I have to admit that I'm a bit surprised by this, and wonder if it's really accurate. The telling quote in the article is this one:

"Artists receive fixed residuals for music sales based on individual contracts via their respective record companies," says Max Clingerman, a music executive for MixJam Records who explains "the staggering price increases are not for the artist interest, rather intended for executive pockets."

While I'm sure the intention was very much for exec pockets, I was under the impression that most major label contracts included royalty rates based on retail price. And while most signed musicians never recoup their advance, and thus never see any royalties whatsoever (no matter what the price), I do wonder if it's really true that musicians don't get a larger cut of higher priced digital sales (at least in the fictional accounting systems the labels use).

Of course, the larger point made by the article is almost certainly true. In increasing the price to $1.29, the demand for such songs has been driven down significantly, leading people to look for alternative sources for the same music.

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Getting Past The 'But Artists Should Just Be Artists' Myth

Mike Masnick — Wed, 9 Dec 2009 13:07:52 PST

At Monday's excellent SF Music Tech Summit, there was a really good discussion in the final panel of the day, that crystallized in my mind why it's hogwash when some repeat the refrain that "artists should just be artists" and not worry about business models, connecting with fans or social networking. It's a claim that is made over and over again -- sometimes by musicians themselves. In the past, we've pointed out that this is fine, if artists just want to be artists then they need to do one of two things: either not expect to make much money or partner with someone who can focus on the business model and social networking side of things. Dave Allen, who was on that panel, used his manifesto on why artists needed to stop whining and start taking charge as a kicking off point, and brought up his concept of why all bands needed "a fifth Beatle" to manage that side of their efforts. In many ways, it reminded me of Andrew Dubber's recent manifesto that pointed out that if you wanted to make money as a musician, you had to become a musical entrepreneur.

But, two other comments on the panel made the point even more clear. First was Sebastien Keefe, from the band Family of the Year, who talked about how the band (more his bandmates than himself, actually) did a really good job connecting with fans online, including a special private concert that only Twitter followers found out about, and a cool postcard promotion, where people would pay $5 for a postcard, and the band would send it back to the fans from their tour. When the question came up of artists claiming that they didn't want to spend the time on social networks to connect with fans, he noted first that it wasn't that much time, and second that an artist unwilling to do that was "selling themselves short," in not really building up their audience.

Though, what's really cementing the myth of "artists should just be artists" was Tim Quirk's comment. Quirk, of course, got a lot of publicity recently for revealing how major record label royalty statements are often total works of fiction, using his own royalty statements as an example. On this topic, however, he noted that the people who tell artists that "you should just focus on being an artist" were almost always "feeding them bullshit" in order to gain more control over the artist. That is, it's a line you often hear from record labels or managers who want more control over a musician's business. So all three of those musicians (Allen, Quirk and Keefe) highlighted how the claim that "musicians should just be musicians" isn't just a myth, but it's often used to limit the potential of musicians.

Right after that panel, there was a short (and very sparsely attended) talk given by Stephan Jenkins, of the band Third Eye Blind -- and without realizing it, he put the exclamation point on this particular discussion from the previous panel. While he said he was grateful for his major label experience, he also talked about how being on a major label actually made it harder for the band to really focus on their music and artistic ideals -- because the label started dictating everything that the band should be doing. From that, he felt like the band really got away from the sort of music that it wanted to create, that had helped make the band big in the first place. He talked about how piracy has given the band "a second chance" by letting a new generation of fans discover their original music, and that has resulted in the band's most recent album, which he felt was much more true to the band's musical roots. He noted also that, now that they were out of the major label system, they were making a lot more money, even if they were selling fewer units.

All in all, it really helped solidify the idea that the claim that "artists just need to be artists" and shouldn't be concerned about business models or talking to fans is really just a line used by record labels to try to gain more control over artists, at their own expense. That doesn't mean that artists shouldn't try to find that "5th Beatle," to help them when it becomes necessary, but that they should make sure that whoever that 5th Beatle is, he or she is really aligned with their thinking in where they want to go with their career.

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