How much could an artist earn from streaming sales?

Two reports recently provide a relatively clear picture of how much (not much) artists can earn from on-line streaming revenue as compared to physical unit or download sales.  Note the income level that they have determined to be the base-line wage for an artist, base on minumum wage rates:  in the US, $1,160 a month (in Canada, this would vary between $1,400 – $1,840/mth, depending on province.  Wow.  Woo-hoo.

Information is Beautiful reports in “How Much Do Music Artists Earn Online?” that depending on which streaming service you go with, you will need to have sales of anywhere between .8 to 4.5 million plays per month.

http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

And a “deeper” look by the Rambler,  shows that the artist makes more in royalty sales froms streaming , and the opinon of Rambler is that this will “get better” in time, as streaming becomes more popular.

http://johnsonsrambler.wordpress.com/2010/04/13/a-deeper-look-at-how-much-musicians-make-online/

What small or independent artist is going to achieve anywhere near these numbers??

Detailed breakdown:

http://spreadsheets.google.com/ccc?key=0Aqe2P9sYhZ2ndE9iZHhWc0pMcDlCdmxNdmFRQXRPY3c&hl=en_GB

Apple to Rule the Music World?

Phil Leigh’s Inside Digital Media released a report last month entitled “The Future of Apple” in which he predicts Apple’s plans to rule the world of music distribution (he called it “music discovery”), and that we (i.e. creators of recorded music) will have no choice but to play along with them.

That’s a Borg-like statement and we have yet to hear anything from Google or RIM on this subject,  the two other current big players in this market.   RIM seems to be blissfully unaware of this market, and Google may well be preparing a game-changing assault on Apple’s strong lead.

It is clear that there is a vacuum waiting to be filled, where someone can take on the role of “telling” people what they want to listen to.  The scary thing about Apple “owning” that role is how they would likely  play that role in the future. 

As an example, Apple has yet to allow Adobe’s Flash to be implemented on its iPhone/Pod/Pads (with the exception of YouTube videos, which run in a controlled environment).  Apple is reluctant to give Adobe the control over that aspect of the experience, and since Apple owns the baseball, the bat, the diamond, the field and all the air around it, there is little that Adobe can do.  So, the iPhone/Pod/Pad user has a diminished web browsing experience, given the prevalence of Flash useage on web sites.

If Apple does not perceive something to be in its best interests, it will stonewall, and if that something would be in the best interests of other parties, ie consumers, there will be little that anyone can do.

There needs to be healthy competition to keep Apple in check. 

Billboard has recently interviewed Phil Leigh about his report, and he makes some other bold statements, specifically about the role that Facebook will play in the future.  http://www.billboard.biz/bbbiz/content_display/industry/e3i4062457efae56fa395d3a162524485be

Ode to the 360 deal

The following correspondences provide a comprehensive viewpoint on the so-called 360 deals that record labels are increasingly signing with their artists.  There are two articles, and one email reply to Bob Lefsetz (which I have quoted here).

In short, the first articles argues that 360 deals are skewed in favour of the labels, and really only make sense for pop artists who will have significant airplay and concert exposure (thus sales).  It will still take years and many millions of sales before the artist sees a fair share (or often any share) of revenue.

360 Deals
(http://lefsetz.com/wordpress/index.php/archives/2010/04/19/360-deals-3/)

There is an abridged version at
http://www.billboard.biz/bbbiz/content_display/industry/e3ib6547f261e43d0f65fd4e46289bf169e

Be sure to read the second article, which is somewhat of a rebuttal to the first viewpoint, but concludes with this sobering statement: 

“…when representing young and previously unsigned talent who WANTS to sign to a major, there are not a lot of other options out there with company’s that can say that they’ve successfully broken new acts.”

re 360 deals
http://lefsetz.com/wordpress/index.php/archives/2010/04/19/re-360-deals/

________________________________
http://sn103w.snt103.mail.live.com/default.aspx?wa=wsignin1.0
From: Richard Griffiths
Subject: Re: Re-360 Deals

My experience having done a lot of these deals is that Bob Donnelly is spot on.

There is variation from label to label but they are all essentially the same. Warner being the most aggressive.

But as always, when you have an act that everyone wants, a lot of those set in stone deal principles that they tell you about get watered down quite considerably. It then becomes a case of having to save face so that they can continue to claim that they only do 360 multiple rights deals.

We have some deals that are true partnerships with the labels (not equal partner!) They really add value and I have no problem with paying them their tax. There are other deals that we have that just piss me off everytime the accountant sends me through the royalty statement to review before we send to the label!

Build a relationship with your market

“enforcing control (when trust is really what’s needed) will yield instant disengagement, which swiftly and surely will translate into dwindling revenues — as the music industry keeps proving again and again”

The Future Of Content: Protection Is In The Business Model — Not In Technology

http://www.techdirt.com/articles/20100326/1452138737.shtm

The Paradise That Should Have Been

The Internet should have enabled artists to be able to create markets to sell their music and make a living, but this has not emerged. 

http://thecynicalmusician.com/2010/01/the-paradise-that-should-have-been/

Even large sales produces teeny profits from Spotify

The profits from streaming services are small, even for big name artists.

Lady Gaga Earns Slightly More From Spotify Than Piracy

Lady Gaga got a million plays on Spotify and earned $167

http://www.hypebot.com/hypebot/2009/11/report-spotify-paid-lady-gaga-167-for-1m-plays.html

Selling "copies" (CDs or downloads) still the most profitable way to make money selling music

Glenn Peoples writes in Bilboard Magazine that access based models (ie subscription) may someday be the dominant way that music is disseminated, but a healthy functioning  model is no where in sight, and so the best way for an artist to make money still is to find creative ways to sell copies of your music.”

Analysis: CD and Downloads Are Toast? Not If You Want To Make Money Today

http://www.billboard.biz/bbbiz/content_display/industry/e3i8ca14b8f869f03f0f9ef2b4c26f7fe11

The Cynical Musician reports that

“To generate revenue equal to the $1,160 per month (slightly over the U.S. Federal poverty line), an independent artist needs: 1,813 downloads per month at iTunes; 3,392 downloads per month at eMusic; 127,473 streams per month at Rhapsody; or 7,733,333 plays per month at Last.fm. Paradoxically, it says, CD sales are “still our best bet” for generating revenue.”

http://thecynicalmusician.com/2010/01/the-paradise-that-should-have-been/

Using an "avatar" to find music you like?

“Music fans of tomorrow are kids of today, and the way they pay for digital content is through virtual worlds like Farmville and Penguin Town, which turn the acquisition of virtual goods — and digital music is nothing if not a virtual good — into a game.

Conduit Labs’ Music Pets app for Facebook may look cute, but it could have tangible ramifications for how music is discovered and sold in the future.”

“Grown men and women discovering and collecting music using a cute little avatar? ”

http://www.wired.com/epicenter/2010/04/virtual-worlds-real-money-can-social-games-solve-musics-woes/

Is Spotify playing fair?

Is Spotify, or other streaming services, playing fair?

Spotify payments are truly tiny…  the tracks I sell through agreement with CD Baby to Spotify generate on average $0.015 per track sold… yup, a penny and a half.  (Selling a track for download will produce around $0.60).  So, I have to hope that a whole lot of people playlist my music.

Maybe that will happen, and then millions will listen to my kazoo-band rendition of Musorgsky’s Pictures at an Exhibition, and with my thousands that I earn…

Are the payments fair?  How can we know?  How about some simple math:  if we pay $10.00/mth for a streaming service, and listen to, say,  30 songs a day ( about 2 CDs worth), 30 days a month, at $0.15 per song, the streaming service is paying out $13.50 to artists.  Spotify, or whoever, has to hope that many subscribers do not listen to this much music to make up for those who do, and that they can make money through other means.

http://www.billboard.biz/bbbiz/content_display/industry/e3i15f690d9bb7df95678ac49b5ac756ac4

http://www.guardian.co.uk/music/2010/apr/13/spotify-songwriters

Will Apple be the new "record label"??

 Wired Magazine raises the spectre of Apple potentially “becoming a giant news, entertainment and communications network with Googillian ambitions”.

That is scary.  So far, Apple has not, that I know of, denied anyone access to selling their music through its store (its does excercise tight control over apps).  But as a media company with control over the minds and hearts of 10s of millions of people, the temptation to tweak and market what we can access in order to boost profits for the benefits of shareholders (ie like a big record label) may become irresistable.

Apple Goes Where The Portals Failed: It’s The Hardware, Stupid

• By Fred Vogelstein
• April 10, 2010

http://www.wired.com/epicenter/2010/04/apple-goes-where-the-portals-failed-its-the-hardware-stupid/