Just Because New Artist Platforms Aren't Minting Millionaires Doesn't Mean These Platforms Have Failed

from the making-money-with-art-has-never-been-easy dept

Last week, the Tunecore blog, in a display of openness you won’t find at most major music sites or labels, made publicly available its sales numbers for July 2011 (one of the slower months for music sales) in order to point out just how many artists were making money.

As is to be expected, a small percentage of artists made thousands of dollars while many others made far, far less. Tunecore was braced for the inevitable criticism, however.

But for all those that may comment suggesting most are making less, my response is, you’ve got to be kidding me. These artists, all of them, are outside of the traditional system. Some are earning hundreds of thousands and some are earning $20.

And this is bad because…?

With the music industry democratized more artists are making more money than ever before. All of this money you are seeing is going directly into these artists’ pockets; this is money they would have never ever seen before.

Now add the songwriter money on top of this money.

Someone needs to explain to me why an artist earning something vs. nothing is a bad thing, as I truly cannot understand that logic. As far as TuneCore, as I have stated over and over, it’s your music that causes it to sell. It’s up to you to decide if the services and fees TuneCore charges work for you.

Well, Paul over at Digital Music News must have read nothing but the spreadsheet, because his post attempts to explain the “and this is bad because…” part (while glossing over the “something vs. nothing” angle) by pointing out that 99.9% of the artists listed make less than minimum wage.

But now, it turns out there’s an even more depressing figure: 99.875% – or nearly all – of Tunecore artists are making less than minimum wage through the platform, based on revenue figures recently shared by the company.

And that only counts revenues – not costs for creating content or annual fees owed to Tunecore. It also assumes that Tunecore revenues are being paid to one, solo artist, instead of being divided by a group.

DMN takes issue with Tunecore’s claim that more artists are making money than ever before, simply because “more money” doesn’t equal “a lot of money.” It even goes so far as to implicitly suggest that artists were better off with the old system, running through a set number of gatekeepers, by quoting Paul’s (Tunecore) “democritization of music” line before asking, “But is this really true?”

Tunecore CEO Jeff Price came firing back, pointing out what’s wrong with arguments that new systems don’t work because everybody’s not making thousands of dollars.

Paul, why do you put down artists for making money? These artists did it on their own, drove every sale, earned every penny without having to give up their copyrights or sacrifice control, something never before possible in the history of the modern music industry. I published the numbers in response to statements claiming artists cannot can sell music without a major label. So why on earth are these tangible, actual results being painted as failures?

Why are they painted as failures? Just ask regulars in our comment threads. These solutions “don’t scale.” Which tends to mean one thing: not everyone is making tons of money, therefore the system is a failure. But averaging numbers doesn’t present the whole picture, as Price points out.

The “average income” formula you created may be the most useless, meaningless statistic I’ve ever seen. Here’s an example as to why:

An artist that makes $20 a year in music sales sits alone in a room. Average made per artist = $20. Now an artist that makes $1,000,000 a year enters the same room. Average made per artist = $500,010.

So what did we just prove exactly? Same thing you did; nothing.

With this “argument” broken down, what exactly is someone who points out miniscule sales numbers trying to tell the artists? Is it a backhanded attempt to paint the artist as “screwed” by Tunecore? Or is it something even worse?

The truth is, most artist don’t make that much in music sales a month, and we all know it. Most make much less. So what exactly is the point of your article? Are you saying that artists should give it up, as it’s a tough business? What exactly is your news story? Drop your guitar and go work at a fast food restaurant?

Price goes on to point out what should be blatantly obvious, but often gets ignored during this sort of conversation: it’s ALWAYS been a small percentage of artists that become very successful. This isn’t new. This has always been true of the music business.

The “odds” of becoming a household name in music during your lifetime, of becoming a superstar, have always been microscopic, and we all know it. But until recently, every single one of the artists who “made it” and did not “make it” were forced through a system of gatekeepers, opinion-shapers, cultural and business guardians that took their copyrights and took advantage. Are you advocating a return to that system?

It can take years, thousands and thousands of dollars of investment, endless hours of work and sacrifice before something finally gives and the stone wall you’ve been banging your head against finally cracks. Your pseudo, baseless “analysis” suggests independent artists can’t “make it”. Bullshit.

Price says the best thing you can do is arm artist with as much information as possible, rather than attempting to scare them away from doing what they love with the insinuation that making music just isn’t worth it.

Tell them the truth: it’s hard, it’s going to be tough, most of you won’t become a superstar. Here’s the information you need to know, here are the options, it’s up to you to make it happen. Go into this with eyes wide open. No promises.

So some artists made a “mere $1,280” a month from digital music sales (this is a put down?). Newsflash, many made less, but had they gotten those sales while signed to a traditional record label, they’d have gotten no money and, most likely, six weeks after street date, they would have been dropped. That’s the fate of 98% of the acts that came through the majors alone.

As he points out, the spreadsheet shows artists making thousands of dollars a month, which was conveniently ignored in order to shout, “THIS DOESN’T WORK!” 6,000 artists who would have made next to nothing (or nothing at all, if not recouped) are all making money. Things are getting better for the artist, but those who align themselves with the old system seem to think that because the music industry isn’t awash with millionaires, new platforms are failures.

The fact is that the old systems won’t work anymore and even in their prime, they weren’t any better at turning artists into millionaires than the current systems. The real downside is that those who claim to be “for the artist” are often the first ones to paint the bleakest picture possible. How does that help?

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Comments on “Just Because New Artist Platforms Aren't Minting Millionaires Doesn't Mean These Platforms Have Failed”

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Marcus Carab (profile) says:

It strikes me as very similar to something that happened not long ago. At one point, a garage band had to have the upfront cash to pay for a small run of CDs if they wanted a way to independently sell their music. Few could and fewer turned a profit. Then the explosion of CD-R meant every band could turn out some discs to sell at a show – and it wasn’t that hard to turn a (miniscule) profit, since the cost was so low and a few people would always drop the $5-10 bucks (and this still works for lots of indie bands today).

So by the DMN argument, CD-Rs made things worse for artists, by enabling way more of them to make a few bucks… And by the exact same model, I suppose affordable digital recording equipment and software like GarageBand really fucked them over too…

Richard (profile) says:


What people forget is the supply/demand structure in the musical world. There is an almost infinite supply of wannabee professional musicians. Anything that makes the life of a professional musician easier will simply expand the number trying to make a living. Therefore the advent of a large number of musicians (making not much – but at least some money) indicates that the business environment for musicians just got better.

Anonymous Coward says:

What DMN's critique neatly ignores...

…are all the artists that LOSE money as a result of trying things the “traditional” way.

I spent four and a half years in a pretty good band, with a substantial regional following. We practiced, we wrote, we played out, we recorded, we did all the things one might expect musicians to do. And we made money…for other people. In the end, we figured out that (collectively) we were about $22,000 in the red — while those we were working for were about $47,000 in the black.

We would have been happy to make minimum wage — on a per-hour basis, given the thousands of hours we put into our craft, we would have at least had something to show for all our effort. But that’s not how it went down.

And we we’re not alone.

Everyone in the business knows this. Everyone learns, sometimes rather quickly, that musicians are the last to get paid. This is the “business model” that’s been in place for decades, and it’s been immensely profitable for everyone BUT musicians (with rare exceptions). The question thus becomes: why doesn’t DMN know this? Why doesn’t DMN recognize that when any musician is making any money at all, that’s probably a huge win over the status quo?

Oh — we would have done it for minimum wage. We loved what we were doing. That’s why we put thousands and thousands of hours into it. That’s why we held down second jobs to fund it. That’s why we sacrificed, why we slept in a van, why we played lousy gigs in lousy joints, why we fought through all the setbacks, why we gave up time with girlfriends (and sometimes gave up girlfriends). So if we could have actually afforded to keep doing it, if we hadn’t been forced out by financial reality, we would have kept right on.

Ninja (profile) says:

Re: What DMN's critique neatly ignores...

You were just failures, face it. /troll

The MAFIAA masks are slowly falling. They may scream, sue and press for though laws but they’ll be forced to adapt in the end.

Its refreshing to have opinions from the creators themselves (they’ll be completely ignored by the labels and our lawmakers but it’s still refreshing). Maybe you and your friends might try these new models? I say that $1k per month is a pretty good complement to monthly earnings, specially if you are doing what you love.

Anonymous Coward says:

Re: What DMN's critique neatly ignores...

Oh — we would have done it for minimum wage. We loved what we were doing.

Which would be exactly my point. Since when is music only worthwhile if you become a millionaire? For me it’s about following your passion and doing what you want to do. I know many people who play in bands and have nothing to show for it but they love to be on the stage, doing the thing they love.

My fervent hope is that after the big labels die we will have a new golden age of music. When new and exciting things will happen and musicians experimenting with new music will create the next big thing because they where not forced by their labels to go for the next guaranteed hit.

I want failure, happiness, misery, success, sweat, love, tears and joy and I want to hear all of that in the music. That is what music (art) is about.

Joe Publius (profile) says:

Re: And all this in the old way comes AFTER...

Heck, not only does each artist have an equal chance to succeed, but they get that chance within the current IP regime. I feel like this point is short-shrifted.

You would think that pro-IP folks would be playing this up. Artists have the opportunity to make a living through their work without having to sacrifice their copyrights or artistic control, the first two things a band risks losing they moment they sign.

Then again, when it comes to the “industry”, maybe this discussion has nothing to do with the artist and the protection of their content.

out_of_the_blue says:

Re: Unrealistic Expectations -- No, "rubberpants", but less than 100%

return of ANY amount risked IS a LOSS. You manifestly don’t understand the notion of risking money in hopes of getting more. But it’s /risk/ that’s used to justify allowing people to profit from “investments”. Though, constraining to topic: a movie isn’t an “investment”, it’s SPECULATION. Considering the number of high-dollar flops, it’s amazing that anyone would fall for the term “investment”, but still works because people want a big easy increase right now, just as gamblers do.

Anyway, IF piracy is allowed to increase without limit, I don’t see anyone risking $100M on a movie that gets stolen immediately. — How in the world do you expect them to profit if you allow DRM-less distribution of their files? — So if you want the movie /industry/ to continue, you’re going to be troubled by their notions of copyright enforcement. That’s sheer fact; I don’t see any way around it. When billions are at stake, Big Media aren’t going to be delicate and discerning.

MrWilson says:

Re: Re: Unrealistic Expectations -- No, "rubberpants", but less than 100%

If you spend $100 million to produce a movie but are too cheap to hire security guards at your studio to prevent the theft of the hard drive(s) and back ups that contain the only copies of your movie, you’re an idiot.

Or maybe you were talking about copyright infringement and not stealing…

But the fact that $100 million dollar movies are still being made despite your assertion that no one would do so with rampant copyright infringement proves that your assertion is wrong. I expect them to make a profit the way they already have: Expensive theater tickets, a theater experience you can’t copy at home, pub theater sales of beer and pizza, DVDs and Blu-Ray discs that many people still buy, pay-per-view, iTunes downloads, etc. And I still expect them to hide those profits away via creative accounting so they don’t have to pay as much as they contractually should in royalties to the actual people who contributed to the movie’s creation.

Anonymous Coward says:

Re: Re: Unrealistic Expectations -- No, "rubberpants", but less than 100%


Anyway, IF piracy is allowed to increase without limit, I don’t see anyone risking $100M on a movie that gets stolen immediately.

Good than maybe, maybe, people start doing real films again like Alfred Hitchcock that never used a $100 million dollars to make a movie, Charles Chaplin and so many others, did Nosferatu cost $100 million? did Metropolis cost $100 million?

Nope, even Jaws didn’t cost that much to produce and it was a success, Rocky was done in a $35K budget at the time without accounting for inflation but it is nowhere near a $100 million dollars.

Instead for that kind of money we get Smurfs blended with Poncahontas(Avatar), endeless sequels of great movies of the past but not really anything new just reinvention of the old shit, recycled to fit a $100 million budget.

Today people can do that with a lot less as fan-movie films are starting to prove it.

The real question is how do we produce a $100 million dollar like movie with a $0 dollar budget and have everybody involved be able to live a decent life. Those hard questions you don’t want to answer because you think the old ways work, but they don’t, other countries are taking up all the jobs and they do it for a lot less than it costs in America, which proves one thing, wealth is the result of work done not money expend on it.

How do we provide food for each and every citizen, how do we provide power and clean water for each and every citizen? and at the same time give them the time to pursue their dreams? This ain’t gonna happen on the current system that needs 99% of the people to sacrifice so the 1% can have it all.

Distributed society is what I want to see the world become, every house would produce shelter, food and a healthy environment for their occupants while allowing them the time to imagine things and allow people to pursue their dreams dumb or otherwise.

People need healthcare, fine every house should produce something they should be able to give to their local clinics that in turn would be responsible to keep them healthy for free, that includes food, medicine and equipment, millions of people producing something would be able to sustain a society in that manner, why are we not distributing the work load to everyone?

Maybe is greed that doesn’t allow us to see what needs to be done, people need to start producing the things they need if they want them to be available and not expecting that others will take on that responsibility, is like trusting your enemy with your security.

Anonymous Coward says:

Re: Re: Unrealistic Expectations -- No, "rubberpants", but less than 100%

Every house in America should be a food producer, energy producer, drug producer, parts producer and entertainment producer.

When that happens and it needs to happen because there is just no other way one can produce wealth without working and money as an incentive is not enough to keep people working when others in the world are willing to do the same work for 1/10th.

Then this BS talk about $100 million dollars will be just academic, you don’t need a $100 million dollars to produce anything, you need the work that is done for $100 million dollars to happen and if it happens for $0 or $1B it doesn’t matter, what it matters is that the work happens, but for society to thrive we need something new, we need to work without getting money and when those financial crisis hit, security will be maintained because people will have the basics covered by other means that don’t depend on money to happen.

Crazy you say, well, the American Army doesn’t think so, they are planning a distributed hardware production scheme, because they don’t want their hardware being manufactured by other countries and they are just deploying those things right now, teaching people how to produce parts for them. Now take that to another level and we can start doing that in a national scale where everybody can contribute something, so instead of clinics and hospitals keeping track of how much you paid for insurance maybe in the future they will track how much food you gave them, how many parts you gave them, how many hours of work to gave them.

Money is a proxy for work and it is not working.

Anonymous Coward says:

Re: Re: Unrealistic Expectations -- No, "rubberpants", but less than 100%

How in the fuzzy did your movie make it out of the studio before it was release in Theaters?

It sure wasn’t my grandma that leaked that stuff out.

Every time you point your finger, there is always 3 pointing back.

Why are you not going after the people IN THE INDUSTRY that leaked that stuff out to begin with?

out_of_the_blue says:

For the record, I'm against /anyone/ getting millions for music.

Notice first that I don’t say “making”: music doesn’t “make” any money, only gets people to re-distribute. If otherwise, then societies would have been rich ever since Ringo pounded on a log.

Anyway, you continue to argue obvious points and wrongly extrapolate them to an /industry/. That’s a major objection and the /industry/ just isn’t going to embrace your notions. You should really /lower/ your expectations of what the /industry/ will do: as I’ve said, dinosaurs are stubborn. IF you realistically appraise that, then you won’t spend so much time ranting that they just won’t change.

Many people scrape by playing music. Muddy Waters did. Woody Guthrie did. So long as your expectations of money are low and your urge to play music large, I think it’s a FINE way to pass the time until you return to nowhere.

But, here, you blithely glide over that the new methods aren’t much more likely than the star system (the studio system that relies on a few big names) to provide a subsistence.

And you can’t just blithely skip over goals, either: I think MOST musicians rather obviously WISH to get millions from “money for nothing”, so your “system” has nothing to offer them. That’s part of why I oppose it, because you SEEM to hold millions out for bait.

I’ve no objection to realism. — Somehow that brings /me/ only scorn here. But it’s okay when /you/ say don’t expect miracles or millions, so keep it up.

Ninja (profile) says:

Re: Re: For the record, I'm against /anyone/ getting millions for music.

You know, it was hard to find what exactly he wanted to say but if I got it right (and I don’t believe I did) ootb is some kind of Jekyll and Hide thing (whatever u write those names). He changes personality so many times in his post that I’m inclined to believe he drank at least a few dozens of different transformation potions where the only thing that remains is the /way/ of writing things. And ONLY that.

Still, I’ll join you in your quest.

The /solution/ is a BETTER business model.

Beech (profile) says:

Re: For the record, I'm against /anyone/ getting millions for music.

Ok, let me take a whack at this. Mr Blue, you say that mike “blithely glide over that the new methods aren’t much more likely than the star system (the studio system that relies on a few big names) to provide a subsistence. “

But, um…thats exactly what i took away from this article? Allow me to quote:

“a small percentage of artists made thousands of dollars while many others made far, far less”

“99.9% of the artists listed make less than minimum wage. “

“Tell them the truth: it’s hard, it’s going to be tough, most of you won’t become a superstar. Here’s the information you need to know, here are the options, it’s up to you to make it happen. Go into this with eyes wide open. No promises. “

Soooo, when you write a whole article about how there’s tons of people who don’t make millions of dollars…how are you “blithely gliding” over it?

Ima Fish (profile) says:

Actually, the fact that there are fewer millionaires shows that the music industry is becoming more efficient. Instead of large amounts of money being collected by a select few artists, it’s being spread around thousands of artists.

Think about it, if you find a great way to make money, in a free market someone else should come along and compete with you, lowering prices and profits. The only way someone can make an obscene amount of money is by having some sort of inefficiently in the market which allows you to conduct business without competition.

Bill Gates? Windows and Office monopolies/Copyright.

Carlos Slim Helu? Has a 90% monopoly lock on Mexico’s phone network.

Anyone rich from oil? Monopoly rights in the mineral rights of certain land.

If someone got extremely rich, there was some market inefficiency that got him there, e.g., patent, copyright, government contract, etc.

bob (profile) says:

This is the old system. There is nothing new about this.

People pay money. They get a copy of the music. What’s new here? In fact, Tunecore works with many of the major stores like Amazon.

I think the reason that people are making money with Tunecore is because they’re following the old system that this blog normally denigrates. Tunecore is not selling t-shirts. They’re not using Kickstarter– although Kickstarter looks more and more like an old fashioned store to me. They’re not tossing out free copies into the P2P network and putting up a tip jar. Nope. Tunecore SELLS music.

Once again, I’m glad to welcome this blog back to reality.

Anonymous Coward says:

Re: This is the old system. There is nothing new about this.

Nope Tunecore sells access to outlets that sell music, but they do it with a fixed price point not like the old models where they charge different prices for everything they can think of.

Is like instead of charging $20 for a CD that will have a windowed release in different parts of the world and get charged for each and everyone of those windows, they just put out the $0.10 for every market at the same time getting rid of the windows and affiliated fees altogether, this is in no way like the old system is it?

That is why people in the old industry get so upset about Tunecore because they are for them a regression to a time when they got less.

But it benefits artists, not necessarily customers at this point.

jupiterkansas (profile) says:

Re: This is the old system. There is nothing new about this.

Tunecore lets artists release their own music without going through a label, meaning they keep all profits and keep their copyright. That’s a huge difference from just “selling music” through a studio. It also lets them compete on the same playing field as the major labels. They get put on the virtual shelf right next to Justin Bieber. Imagine seeing local bands on the shelf at Best Buy 15 years ago – it never, ever happened.

So yes, it’s a traditional model of selling music, but it’s the artist in control, not a middle man, and that’s the new business model.

Nomar says:

It occurs to me that traditional music publishing works like a casino: it creates a (very) few, (very) big winners and a huge majority of losers.
The new independent platforms like tunecore are more like marketplaces: nobody wins a huge amount of money, but almost everybody makes at least some profit.

There is a reason why, economically speaking, we prefer marketplaces to casinos.

Anonymous Coward says:

Playing devils advocate I can see that they (Those that think its bad) do have a valid argument if you make a few assumptions and look at it from a narrow point of view.

It makes sense if you consider the entertainment market as a bit static (people only spend so much) and that there should be a few mega winners, and well, no one else has music worth listening too. So the argument is that now that its easy for a lot of artists to reach people, that they are at the core stealing money from the mega winners who should be getting all of it. For every Elvis there are a thousand starving artists argument.

Anonymous Coward says:

The problem I have with this article, and most articles written from either side, is it completly ignores production costs. The new media side focuses on distribution because that is the cheapest part of creating music, and the easiest way to argue against cost. The recording industry focuses on copyrite because it protects their main investment which is the recordings themselves.

Outside of MIDI/synth artists, a few accoustic artists and re-mix artists, home recording with Pro-Tools or Cakewalk just isn’t realistic. The idea that you can make studio quality recordings in your own basement or apartment is as much marketing bunk as when Apple claimed you could make a Hollywood blockbuster quality movie with a handy cam and an iMac. For a band the size of a punk trio or larger to make a mid quality recording still requires a studio(sound proof inside and out, no noisy florecent lighting or air conditioning, paid electrical bill, paid rent), equipment(minimum: six microphones, mixing board, tape recorder or hard drive) and at least two people with knowledge and experience running and maintaining that equipment(college grads and union workers both, at least one a licenced electrician). These things are all, as this site likes to say, real scarcities, and getting more scarce all the time. While technology is making the cost of recording demos is dirt cheep, it is also making recordings for public consumption incresingly more expensive.

While Tunecore can point and say “look at what our artists make from sales”, they are brushing aside the fact that their artist are mostly in major debt. Those artists all took motgages, bank loans, mob loans, whatever to the tune of thousands and even tens of thousands of dollars, but twenty dollars in sales is all gravy baby. “Here Mr. Banker, I know I owe you nine grand, but here’s an Andrew Jackson. We all square?”. As wrong as they are in all other regards, record lables usualy don’t recoup their losses from the artists as long as they have other artists bringing in income, banks and bookies don’t have as liberal of a reputation.

Tunecore does not fail because their artists have low sales or profits. Tunecore fails because they are not part of producing their artists, they are not helping create they only distribute. In that way they are worse that the record companies you all despise.

Digital distribution will continue to grow and physical distribution will continue to shrivel and die, that is inevitable. However as long as the cost of recording is out of the reach of most musicians, some corperate stoolie is going to find a way to charge you to listen to their investment.

But hey, what do I know?. I’m just some lone nut that doesn’t think publishing and distribution are the real argument. Maybe everyone else is right and I’m just chasing windmills.

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