Money is a heated topic within the music industry. For record labels, music sales are still the golden standard for an artist’s success, but music is so much more than a monetary transaction. It’s often implied that the best way to support an artist isn’t necessarily through buying albums and singles, as that initial sales figures are broken up with only a portion of that going to the musicians.
As more and more listeners opt-in to streaming services, some may wonder how can they support an artist so that they can keep making music for everyone to enjoy? Read on for the profit breakdown behind music sales and where your money can go to support artists as directly as possible.
Let’s start with the landmark moment when Taylor Swift pulled her music from Spotify, which made headlines within every industry, from music to technology to entertainment. Swift’s stand against Spotify sparked a conversation about the impact of streaming services and what they owe musicians in monetary terms. Since 2014 however, the mood towards streaming platforms has been changing. It’s been a long term assumption that the music industry is on the downturn, a trend that has seen the sector’s revenue drop 43% overall since 1999. Whilst things might look dim, it’s not all bad news though. Fast Company points out that the rise in music subscriptions will be beneficial to record labels in the coming years, which is definitely a plus, but there’s still the issue of payment going directly to artists. As with our own argument, Fast Company comes back to Swift, but also to Adele who kept the streamers at bay for her highly successful album 25:
“The fact that Adele did so phenomenally well despite not being available on the services that so boldly claim to be the future of music is just a wee bit embarrassing for the streaming business.”
Recently, Citypages broke down the income model from records for a lesser-known band called Modern Radio. It didn’t matter what channel Modern Radio used or if the record cost $8 or $22, the profit was the same: a rather dismal $2. It appears that streaming services don’t deviate from that model by much either. For example, Spotify pays nearly 70% of their revenue to rights holders, but after that the label or publisher divides money, and what’s left? Well, that would be about $.00029 per play which goes to the artist, according to Alternative Press. When it comes down to Taylor Swift vs. Spotify (or more recently, in the DMCA petition against Google and YouTube which is also about artists being paid fairly), that’s a matter of scraping pennies. Especially for smaller artists who are still working to prove their worth in an incredibly stretched industry.
It should go without saying: pay for the music you listen to, but there’s plenty of evidence to prove that this does not mean your money is going directly to the artist or band. So, as a fan, a listener, a music fiend, how can we support the musicians we love so that they can continue to bless our ears with the music we love?
The first obvious route is concerts. In a 2011 NPR article, Dawn Barger, who manages bands like The National and The Antlers, agrees that every ticket sale counts. Often, lesser-known bands are paid according to the number of ticket sales. Artists who aren’t signed or backed by a label often tour out of their own pocket. A peek into Kevin Garrett’s Snapchat shows him and his band driving to each city to perform, with one leg of the trip being from San Francisco, California to Salt Lake City, Utah, which is about a twelve hour drive. Even those lucky enough to be on a label roster still find themselves driving the band van around, as frontwoman Juliette Jackson of Columbia-signed The Big Moon’s explained in our interview that she took to the wheel to travel down to Brighton’s The Great Escape festival earlier this year.
When it comes to playing live, being a band may have more implications than whose turn it is to drive. Two years ago, an anonymous source from major booking agency Degy Entertainment released a list of booking prices. For example, a venue could theoretically book successful HumanHuman discovery and alt-pop representative Lorde for $100K+. While the numbers may look high, keep in mind that the agents and managers take a cut, on average about 30% of the gross, before the artists receive their portion. Back in 2014 when these figures were first released, James Bay made $5-15K per show, but now that he’s headlining festivals and nearing the 850,000 likes mark on Facebook, so he’s probably making more, but it’s easy to imagine that his publicity, booking and security team is larger than before. Those jobs easily cost an artist about an extra $5-10K per month. The payout may be even less for bands with many members and for moderately popular bands concert revenue may depend on who owns the venue and if equipment is available so that other factors don’t eat into the cost. That being said, these figures are much more respectable than the pitiful return on streaming.
While you’re at a concert, pick up merchandise. T-shirts, tote bags, posters and even CDs make their way onto the merch stand as revenue staples for touring artists. At times, merch is like the popcorn of the music industry – they have the best Return On Investment for artists and listeners. For fans at concerts of smaller acts, the emotional ROI is arguably off the charts. Another option is online merchandise, through which an artist, especially a small artist, can tell how much interest is being paid to them from the number of sites visits, with the added bonus that this virtual attention could potentially turn into a financial investment. Back in November 2015, Jai Wolf released a limited set of sweaters and they sold out in one day. Additionally, Jai Paul fans will remember the frantic online scramble for the limited edition Paul Institute vinyl, which was available to buy for a short time via their membership-only website.
In another bid to bring in further revenue, some artists are encouraged towards endorsements. These might sound like a “sell-out” move, but as listeners pay less and less for music, it’s sometimes a necessary call. According to Billboard, these artists turn to other outlets like Las Vegas Residencies, perfume lines, spinning gigs and talk show performances. To get there, their team definitely didn’t just use album sales to prove their worth. British singer Lily Allen told Beat magazine that artists are paid to go to award ceremonies and product events or in her own words “Pointless stuff. And we all turn up because we get paid to be there”. When negotiating a price, their team grabs every number they can to calculate their “reach” or “worth,” including followings on social media.
Earlier this year, Pigeons and Planes featured an article with statistics from Indify, “a music data platform that uses listener data, social metrics, and online trends to identify emerging musicians far before they reach stardom.” The article featured twenty artists based on their followers on Facebook and Twitter as well as Soundcloud play trends. Many of those artists, like Foreign Air, Dahlia Sleeps and Jorja Smith, have been labelled as Promising by HumanHuman users months before these artists began performing live. The great thing about social media support is that it keeps an artist hyped and relevant. It’s no surprise that labels, venues, and booking teams will look at these numbers to make their decision. Some companies are already forming to provide this data for artists and labels. Next Big Sound published an industry report for 2016 based on several successfully agreed upon HumanHuman acts like FKA twigs, Hinds and Alessia Cara:
“If we can classify artists based on their online activity and from there set realistic expectations for performance, we arrive at something essential to artists and their teams. With a benchmarking tool in hand, artists can easily understand the strength of their numbers, measure what strategies are working, and really derive value from their data. So let’s go ahead and give it that context.”
Chance the Rapper is a great example of an artist who has grown thanks to his fans’ dedication. Most of his revenue comes from festival circuits, concerts (which sell out), and merchandise. Despite giving his music away for free, Chance’s net worth $1 million this year, according to Coed. On top of that, rap artist Chancelor Bennett has made history twice. To start with, he appeared on the American show SNL as the first unsigned, independent artist. His most recent album Coloring Book debuted at number eight on the Billboard 200 charts without selling a single copy. While it’s not direct causation, there’s no denying that his active 1+ million followers on Instagram and Facebook, and 23K on Twitter indicate some form of correlation.
A more recent artist who has rode the social wave right to a new management label is Maggie Rogers. With the highest amount of agrees on HumanHuman and almost 2 million views on a YouTube appearance with none other than Pharrell Williams. The featured song “Alaska” has since gained 1.2 million plays on SoundCloud following the official release. Maggie Rogers’ sudden growth shows how online buzz can bring an artist into the spotlight. This social media star is now in the good hands of Mick Management, who represents acts like Animal Collective, Childish Gambino and HumanHuman favorite Leon Bridges. Some other examples of virality playing a role in an artist’s career are Hozier with his viral song “Take Me to Church,” Ed Sheeran with “The A Team,” and Lorde, whose self-released EP was downloaded 60,000 times via SoundCloud before her label decided to release it commercially.
Some artists host their work on “pay what you want” platforms, like Pateron, a crowdfunding site for artists and creators, or the more well known Bandcamp, which sees acts like Giraffage setting his debut album to pay what you want, with all proceeds funding his future music endeavors. Several HumanHuman discoveries, like Walk Off the Earth and Jacob Collier, use Pateron to fund their creations, and this platform would have a much smaller reach without social media or an existing online community. For example, on Walk Off the Earth’s Patreon account, they promise to follow their patrons on Twitter. Jacob Collier, who reached his goal of $15,000 to produce his debut album, has a monthly hangout with his followers.
With the knowledge that labels and production companies take a significant cut of music sales, the argument that listeners should pay for each album or song is weak. On June 20th, Spotify celebrated their 100 million user mark, a huge milestone that shows how streaming services are here to stay and there’s a reason for that. It’s not that listeners prefer the cheapest option, but it’s because these streaming services offer a payment model that simply favors what listeners’ can afford. The evidence of sold out concerts and rising festival attendance, proves that listeners are glad to pay for a fuller, more rounded experience of the music they love. Throughout this discussion, we’ve come across three viable and easy ways to support musicians directly: concerts, merchandise and social media support.