Artists Have Had Enough: Music Needs Valuation
July 9, 2015
Dillon Roulet in Apple, File Sharing: Friend or Foe?, How to Make Money, Taylor Swift, The Future of Music, music sales, piracy, revenue, streaming

Apple’s statement that they would not be paying artists and the consequent backlash from performers like Taylor Swift has been generating a great deal of commentary regarding revenue from music streaming services in general. This article examines some of the issues relating to streaming, piracy, and the difficulties associated with profiting from recorded music in the digital age.

In response to Apple Music’s announcement that they would be withholding payment to artists during their ‘trial period,’ one prominent artist stood up to lead the dissent.  Taylor Swift announced she would not participate in an unfair system that trivializes the talent and hard work of the music community.  For years, independent artists have cried foul play at a system that almost completely inhibits musicians from reasonably capitalizing on years of hard work and literal fine-tuning.  Unfortunately, a big enough stick was yet to be swung until Ms. Swift spoke up in defiance of such unfair, but tragically commonplace practices.  Is Apple to blame for this lapse in good judgement?  Absolutely.  But the problem runs deeper than any one company. For years, society as a whole has failed to place the proper value on the music industry’s contribution to everyday life.  
As a child of the Digital Age, I’ve grown up watching a vast change in the way we as consumers seek out content.  For music, the shift has largely been based around new streaming technology.  I watched my father build out the first full-scale music streaming service in the mid 90’s with Virgin Entertainment.  The idea that an individual could seek out and consume music of their choosing via a digital channel was revolutionary. Streaming was beginning to take over our lives in ways never thought possible.  And with the arrival of mobile listening devices, new technology was needed to boost on demand music libraries to accommodate to increasing demand from consumers.  However, just as quickly as these new services could build out, so could alternatives that allowed listeners to circumvent paid download.  Napster, Limewire and many other platforms offered a new concept known as ‘file sharing’ that allowed listeners to obtain music copies for free.  These programs have caused the availability and access to pirated content to skyrocket over the past 10 years.  The increase in piracy has devastated the music industry as a whole, leading to numerous complex problems that could not possibly be explained in such a short article.  
Image via Associated Press 2014.
However, tension has continued to balloon in 2015, at a time when online piracy has reached record numbers. The RIAA, Motion Picture Association and many other national organizations have launched aggressive campaigns to warn consumers of the harmful consequences online piracy causes.  But is the message even received?  Figures like Sean Parker and Kim Dot Com are revered as Robinhood-esque revolutionaries, who take from the big bad record labels and give to the innocent, needy consumers.  While it is absolutely true that record labels and big name artists have taken significant revenue hits from a rise in online file sharing, what most consumers fail to realize is how devastating piracy has been to even the smallest of musicians. Streaming models have been forced to build out strategy to overcompensate for high rates of piracy, which in turn has alienated many independent artists from seeing benefit from streaming services.  It’s no surprise that many groups shun the idea of promoting their music via platforms like Spotify, Pandora, Deezer and now Apple Music.  
And the majority musicians affected by these changes are not bringing home a juicy 7 figure income.  In 2013, Northwestern University School of Law published a case study that surveyed over 5,000 musicians with a median income of just $18,000 USD. The study found that on average, only 6% of a musician’s income comes from recordings or royalties.  SIX PERCENT!  That means that the average musician barely makes more than $1,000 from recordings annually.  And when considering the high costs of studio time, mastering and distribution, a musician is lucky to end the year with an album in the black.  
Yet, despite outcry from musicians small and large, consumers have yet to adopt a renewed sense of value for the music industry.  What is the biggest complaint from users on Pandora?  Ads.  What about from Spotify users?  Ads.  To what do ads translate?  Revenue.  We as musicians need to encourage our fans to appreciate our craft by respecting our value to society, and not underscoring talent through illegal and morally corrupt methods.  This includes everyone from those in the big leagues with multi-million dollar contracts, to the local jam band saving up tips to fund their breakout EP.  Let’s work together to spread the message that our music is an incredible craft, but one with a monetary value.  

 

Dillon Roulet is an entrepreneur, freelance A&R consultant and musician.  He is the co-founder of Duplici Media, a consulting firm that explores new media channels to help promote and foster artist development.  Add him on Linkedin, Facebook and Twitter!

Article originally appeared on Music Think Tank (http://www.musicthinktank.com/).
See website for complete article licensing information.