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

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

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

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

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

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

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

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

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

Filed Under: albums, business models, culture, music, obscurity, tom silverman


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  1. icon
    Suzanne Lainson (profile), 19 Jan 2010 @ 8:14am

    $10,000 a month

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

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

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

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