Balancing the Books
Jun 15 2012
There are people who think that we’ll have a better music business one day, just as soon as some genius invents a new model for selling music on the internet. And some genius it would have to be, since all music is currently available for nothing. Creation ex nihilo is a major challenge, even for our Lord.
What, now, is the percentage in recorded sound? Today’s miraculous technology has its contradictions. All at once, it allows a teenager to out-Sgt. Pepper the Beatles, given a spare evening with a smartphone and a bag of drugs, and to BitTorrent the Beatles’ entire catalog, given half an hour with a smartphone and a pinner joint. It’s hardly a moral issue, but if there is a hidden profit margin, it’s so small as to be invisible to the naked eye. No matter how much you, the artist, save by recording your album with Logic Pro 9 in your mom’s condo, the end product can still be obtained for free. Its worth can only be measured in the number of seconds it takes to download. (This will be made even clearer when the Center for Copyright Information, with help from your ISP, starts counting your illegal downloads under the “six strikes” policy in the coming months. Repeat offenders will have their bandwidth throttled.)
On the other hand, Spotify’s generous royalty rate of $0.003 per stream has made some lucky independent artists overnight hundredaires. For every 100,000 times a band’s song is streamed, the band gets $300; split four ways between bandmates, that’s $75 each. Let’s say in a year, the song pulls down 2,000,000 listens, the equivalent of a platinum single: that’s six large in the band kitty, or $1,500 per member! Thanks to this revolutionary new business model that is going to save the music business for Generation Z, a successful new artist can hope to supplement the income from her waitressing job with royalties to the tune of four figures.
The industry boosters’ take is chiliastic. Billboard counsels patience, as does one Jay Frank, former Senior Vice President of Music Strategy for CMT and current owner and CEO of the online label DigSin. According to Frank’s blog on the subject, Fun’s “We Are Young” is a good example of patience paying off. All Fun had to do was wait for their song to be featured on Glee, and then on a Super Bowl ad, and the new business model worked great! Take heart.
DigSin’s own business model is worth considering. They concede that music is now free, yet hope to earn money from it. “Obviously a lot of people are getting their music for free right now," Frank said in an interview earlier this year, "and I think that we’ve now actually come upon a business model where we can actually utilize giving away free downloads and actually use that to actually grow music and actually make it a viable business both for ourself and the artist.” It works like this: after customers sign up at the DigSin website, DigSin “will actually distribute all of the music to them for free, for life.” In exchange, DigSin actually collects customers’ personal information, advertisers pay “actually more about a quarter of a cent more akin to what you would get for one listen on Spotify,” and the artist actually gets a mouthful of shit.
Explaining the decision to remove his catalog from Spotify in 2009, Swedish musician Magnus Uggla wrote: “I would rather be raped by Pirate Bay than fucked up the ass by Hasse Breitholtz and Sony Music.” Uggla says the label first aggressively prosecuted the Pirate Bay and then bought a sizable share of Spotify. As with the rest of today’s job market, if you are lucky enough to get work at all, the only choice you get to make is between prospective rapists.
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