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« The measurable music industry, as described by Britain's Chief Measurer of Music Industry | Main | 5 Ideas For Creating a Rabid Online Fan Base »
Monday
May102010

The measurable music world peaked a long time ago. The immeasurable music world has a long way to go.

Last week I put out a $100 challenge to pay the first person that could prove the following paragraph is incorrect:

Globally, over the last 365 days, for all genres combined, for all artists that started performing live in the 60s, 70s, 80s, 90, and 00s, cumulatively, there is more revenue being generated from live performances, combined with selling stuff (merch, music, apps, advertising slots, streams, licensing, publishing, etc.), than any other year in the history of the world.  Moreover the graph of this number is sloping up and not down.

I asked for verifiable facts that prove that the music industry is not in decline.  David Pakman stepped forward and offered the following statement via a comment on my original post:

I’ll take the bait. Global recorded music sales were $39B in 2000 according to IFPI. Last year, they were $17B, a drop of $22B. If worldwide live music box office sales peaked last year at $4.4B, let’s assume they were half of that in 2000. If ASCAP performance royalties peaked at $1B, where are the other $18B of incremental revenue coming from to make up for the decline in recorded music sales? We know it’s not music publishing. Are you suggesting the industry now sells an additional $18B of tee shirts? No way.

I think you owe me $100. There is no way the entire music Industry of recorded music, music publishing, and live music and merch are anywhere near their peak.

Today, I paid David for his facts and his contribution to the debate.
When I wrote the post, I knew for certain that someone would step forward with a pile of facts and statistics.  You will find similar posts within MTT Stats.

Although I will argue passionately below, that the unmeasurable music industry is far bigger than we know, I can’t prove it with the same facts and reports that I asked for when I posted the challenge.

After some deliberation, I decided that it would be disingenuous for me to post a challenge asking for facts - that I planned to debate with learned assumptions. 

Here’s My Response To David (also from the original post)
David. $18B is a big number to make up for sure. You may be correct. However, I chose the words in my paragraph to equal something that can’t, and probably never will be, measured.

Since the year 2000, the WORLD has gained almost a billion people, 100 million blogs and websites, 100 million films and short videos, millions of minutes of television programming, millions of square feet of public performance space, hundreds of thousands of artists, millions of songs - and it all comes on top of what already existed. Expansion is cumulative.

I read the same reports you do. What can be counted has undoubtedly plummeted. What has grown, and continues to grow, are things that matter (to my statement) that will never be easily counted. There’s no way that you or I can prove that on a country by country, city by city, town by town, neighborhood by neighborhood basis, that 6.79 billion people are not spending that $2.65 per person, per year that you say is missing.

Just look at the country of Brazil for example (190 million people). What can be counted? Not much. Yet Brazil has an incredibly vibrant and growing music ecosystem. We would have to pick apart and debate every country on earth, by revenue source, to prove me wrong.

The only reason I wrote this post was to attempt to pull people off the relentless press that drums on about that which can be measured. The constant bombardment of the negative messages (absorbed by parents and then parroted to their children) are pealing kids away from the industry.

That brings me to the “living wage” argument that Suzanne (Lainson) makes. I will turn the table the same way. How does anyone know that on a country by country, city by city, town by town, neighborhood by neighborhood basis, that cumulatively, that there are not more people making a living wage from music now than there were last year or ten years ago? It’s impossible to measure.

Is my post misleading or fact-bending? Perhaps. However it’s no more misleading than the measurable end-of-the-world statistics that repeatedly appear in the popular press.

I know this for sure: great songs are still being made; people are still making money; people are still getting rich; and nobody knows for sure the extent of it (period).

The measurable music world peaked a long time ago. The immeasurable music world has a long way to go.

Thanks for your comments. I will PayPal you the $100 if you think I am breaking the rules here.

About Bruce Warila  and on Twitter

Reader Comments (37)

How does anyone know that on a country by country, city by city, town by town, neighborhood by neighborhood basis, that cumulatively, that there are not more people making a living wage from music now than there were last year or ten years ago? It’s impossible to measure.

I don't know what's going on everywhere. What I base my ideas on are conversations with unsigned musicians who have been in the business for years. I've had guys tell me that they are earning less per gig than they were 20-30 years ago.

I've had people tell me how they used to play all the time at college party gigs and then DJs replaced them.

I know musicians who aren't selling as many CDs at shows anymore because fans aren't buying as many now.

I know musicians who used to get club gigs where they were the only act. They'd play the entire night and keep 80% of the door. In contrast, now clubs are either eliminating live music or booking four bands per night.

Among the people who say they are doing better are:

1. Musicians who were on major labels and are now on their own. They are selling fewer CDs, but they keep more of what they sell.

2. Famous bands who still command top dollar for tours.

3. Bands who are relatively new and are making some money now. Going from nothing to something is progress for them.

4. Acts who have always been primarily touring acts and have been building up their fan bases show by show, going from 100 people in the audience to 500 people in the audience to 1000 people in the audience to 10,000 people in the audience. Many of those bands are now doing the festival circuit rather than their own shows because that's where the audiences are.

5. Acts in emerging markets. I'm guessing Chinese rock stars are doing better than they were 10 years ago.

Overall I am speculating that we've had a greater increase in musicians than we have had an increase in money spent. On the other hand, we've perhaps lost musicians from other sectors: teaching in schools, performing in orchestras and bands, singing in choirs, so it is possible that the numbers are similar now as in the past. But instead of being part of church choirs, they are now putting up MySpace pages.

According to some recent Harvard research, the size of the market actually *grew* 5% from 1997 to 2007 when you count in the ancillary revenue:

http://www.hbs.edu/research/pdf/09-132.pdf

If you add in iPods (so include more consumer spending on music and music related offerings) that number grows to 66%.

Meanwhile, at least in the UK, if you look at Will Page's numbers, again, you see that between live and B2B revenue, music revenue is going up:

http://www.prsformusic.com/creators/news/research/Documents/Will%20Page%20and%20Chris%20Carey%20%282009%29%20Adding%20Up%20The%20Music%20Industry%20for%202008.pdf

That's only UK, but also his recent reports suggest that in 2009, the story is even better in the UK.

Not sure how to square all that with David's numbers, but I think your original assertion is reasonable.

If you add into it all that can't be counted, I think you're totally on to something. If you look at some of the TuneCore numbers, where they show how much SoundScan *misses* and then follow through on your point and look at emerging markets, I think there's a lot going on behind the scenes. On top of that, even if we stay in the developed market, with more bands doing things truly on their own, almost NONE of that gets counted. Direct to fan stuff done outside of the traditional labels or done directly at shows... it starts to add up.

Here's how I see it.

Music is growing so rapidly that we will reach a saturation point. Music will be everywhere and woven into everything to such an extent that there will no longer be any identifiable music industry. You won't be able to separate out the music into anything measurable.

What we will have is "creative things." They will incorporate a variety of forms of creativity. And these "creative things" will be produced by all sorts of combinations of people and will be participatory so the idea of individual creators will be less important or discernible.

Since I spend a lot of time working with musicians pay as part of a local Fair Trade Music campaign I will chime in. Especially since the "living wage" concept has come up.


To address Bruce's post with some facts. In 2009 while performing for an island community in Puget Sound my band convinced the entire audience to buy a CD by partnering with the Multiple Sclerosis foundation. They actually paid $5 more than if we hadn't partnered. That's twice as much as they need to spend to make up the apparent difference. I am 100% certain that David's figures do not include that money. Not that it is really much for altering the figure but I would be curious if any of the pieces of recorded music we sell is included in that figure either. I am sure we are not alone in that regard.
Fans aren't the only customers, however. Many times it's the venues that aren't spending their share of the money. That is a relatively recent cultural development over the past few decades and is the cause of Suzanne's experience. A race to the bottom in hiring of musicians to keep a business afloat. Businesses that hire four bands need to have that many people (band members) to keep the lights dim and the doors open. What's better is that they'll invite some friends too so there could be twice as many people at least. No need to worry about marketing, the bands will do it all. If you build it they will come, right? What could be better?

What I'd like to see is some attempt to measure the unmeasurable. I'm even thinking about how I could do some research on this issue, though I fear my resources may be a bit too limited.

So let me outline a framework for such research, on a "share your idea" basis.

Presently the majority of data that's available concerns the "old industry", shall we say. Bruce is right in pointing out that this does not reflect the complete picture, especially now that direct-to-fan interactions by artists not affiliated with traditional music companies are perfectly feasible. Whether these alter the overall picture is debatable, but that's exactly what I propose we try to find out.

What I have in mind is an attempt to quantify those revenue streams that are now possible, but do not make the published statistics (at least, not that I'm aware of). I'd like to see numbers from artist-centric distributors (companies like CD Baby, TuneCore, ReverbNation et al.) - the aggregate payouts to their customers, the number of entities collecting the payouts, the payout tiers and what percentage of collecting entities constitute each tier, plus the associated trends over the past several years.

I don't know whether the companies in question are willing to disclose such information, nor the extent to which such data is already accounted for in published reports (though even if it is, separate statistics for this independent sector would give us a more complete picture of whether the easier access to market is translating into sustainability). I feel that an attempt at collecting such information is worth a shot, nevertheless.

Quantifying the small-scale live sector is probably a lot harder and a statistical answer is probably the best we can hope for. The main aim of this part of the exercise would be to correct the live performance income figures for the large-scale heritage acts that generate the majority of revenue (by virtue of audience size and ticket prices). If we could arrive at a representative sample of gigging artists, it would allow us to draw some conclusions as to what the independents are earning from live performance.

The big questions I see are:
1. Whether the pie is growing faster than the number of eaters (artists) or does the growing number of competitors mean everyone has to get by on less?

2. Whether the market situation is such that a fairly business-savvy artist of some merit is able to sustain and progressively grow their music business without involvement from an outside entity or scoring some kind of lottery ticket (by which I mean an unexpected bout of promotion, for instance)?

Is there something I've missed out? Am I trying to break down an open door? What do you think?

There's a significant chunk of revenue that will never be reported. Many of the artists I talk to will never claim (for tax purposes) all of the cash they earn.

To be fair you should remove the margin from CDs that went to retailers and the physical cost of CD production. Those chunks of revenue weren't going to the music industry. The retailer margin is a huge chunk of the revenue.

I've always wondered why the RIAA doesn't make their own white label download store and streaming server. Of course this is the same RIAA that doesn't possess a comprehensive database of all the tracks they own.

May 11 | Unregistered CommenterJon Smirl

There is one variable that needs to be considered with all these stats, and that is the issue of "wage equality." (Time to get all socialist on ya'll!) I'm of the opinion that the pie is shrinking, and that the number of people trying to get a slice is increasing, and that on its own is bad news.

However, this was a fairly large pie to begin with, and the upper echelons of the music industry consumed an incredibly disproportionate amount relative to their size. I would wager that the ease of recording and distribution on the internet has gone some way towards flattening the discrepancies among how much money is made by an individual. It may be worth considering whether that pie is, at least, getting distributed in a slightly more equitable manner than before.

Any sector of the entertainment industry will always have a large gap between the financial successful and everyone else. And a flattening of incomes is not necessarily a good thing... and I'm not positive that its even happening. But even if its beyond our grasp to measure, there is an empirical truth out there about median incomes in the music industry, and it couldn't hurt to keep this trend in mind.

May 11 | Unregistered CommenterJustin

I know the under-reporting picture all too well, Bruce - a lot of money does indeed pass hands under the table, but you didn't hear it from me... ;)

That's why rather than asking artists, I propose a roundabout route: if we can get some idea of how much money is working its way back to the musicians - as payouts from distributors and estimated live revenue in terms of audience size x ticket prices - we'll know something about what's really going on with the pie.

@Justin:
I doubt there's a great deal more equitability in income distribution these days - there are few premises to make such an assumption.

Take, for instance, the data from the latest BPI statistical yearbook as quoted by The Register: not only did all of the independents acount for a mere 18.6% of the market (with no one company topping 3%), but the number of weekly sales needed to break into the charts actually increased compared to recent years (despite the fact that the top ranking tracks show the lowest sales ever). If it's a flattening out, it is restricted solely to the top tier of the market.

Logically, a difficult market situation makes it harder to compete, not easier. It is therefore likely that as the total music market contracts, the gap between the upper echelons and the lower ones will widen - simply because the lower tiers can no longer compete effectively. While the big earners may find themselves earning less than they used to (as indeed they already have), what reduced numbers they do earn will be clawed from the smaller competitors.

The quest for definitive info on the economy of the industry is puzzling.

First, the UK and the USA seem to have always been completely different, culturally and economically. For instance, musicians have been benefiting from radio play in the UK via PRS for many years, whereas in the States there are only now moves towards a similar situation. Recording contracts between record companies and artists are generally two years longer in the States. Nashville exists as an almost separate parallel universe within the USA - whereas there are no competitors with London in the UK. The same goes for the rest of the world: there is no real international equivalent for the German consumption of Swedish New Pop.

Second, the industry has never been, even in one country, a single industry. From genre to indie to major, from politics to mode of consumption, the differences define it. The similarities between, say Crass self releasing (and selling thousands) and Sony releasing and selling hundreds exist in that the product carrier was flat and round.

To be honest, I prefer the mess that is so difficult to understand and I don't trust definitive statements beyond straight forward stats. Whitney could make a successful comeback (like Mickey Rourke) and Coldplay could make a record I like. The 250 or so tax registered music biz pros in Scotland (see:http://blue.caad.ed.ac.uk/ojs/index.php/SMR/article/viewFile/8/7) could be hiding another 10,000 unregistered. Whether the industry is growing or shrinking is fairly irrelevant to nearly everyone apart from government ministers and industry orgs. I remember the worries of American musicians during the disco era, when thousands of bars got rid of bands covering Cheap Trick songs and replaced them with DJs playing Commodores records. There might have been some individual musos who had to learn slap bass, but the industry didn't die then, for instance.

Personally, I'm interested in actual examples that provide information, inspiration and evidence. Will Page has confirmed the UK hasn't gone mad and began meditating in silence instead of getting pilled up and dancing a saturday night away. The USA is even less likely to. I want to see more examples of people doing it right. Keep your next $100, Bruce, everything's OK, business as usual: a mess of individuals slithering around like worms in a can.

May 11 | Unregistered CommenterTim London

Whether the industry is growing or shrinking is fairly irrelevant to nearly everyone apart from government ministers and industry orgs.

I agree. For the average musician, what happens with major labels, for example, has never mattered.

For most musicians it's about whether they can make a living at this, and usually by playing within a day's drive of their homes.

@Tim

Great damn post, thank you.

No, no.. There's a negative meme/vibe out there now about the music industry that's perpetuated by the parrots of the recorded music business. It does matter. The story that everyone parrots is wrong, incomplete and inaccurate.

People do walk - all the time - from jobs and industries because of perception. My message: Tell the truth. Nobody knows for sure. May I repeat my message from the post above: great songs are still being made; people are still making money; people are still getting rich; and nobody knows for sure the extent of it (period).

The only message we ever hear is the exact opposite: Record labels are declining; singles can't replace the income that was once generated from CDs; artists can't earn a living wage; let me show you reports and statistics to drive my point home. This version is bullshit and it is impacting the decisions people (from artists to investors) make about the industry.

Change the message. It matters.

OK, Bruce, point taken. I mentioned to a music journalist friend a year or so ago that I was experimenting with an (online) record label. He said 'you're either mad or you've got money to burn', referring to the onset of internet piracy etc. Negative message, indeed.

But, strangely, I don't get the Titanic vibe from the industry info I read. (For instance Disney shutting down its Nashville label, Lyric Street) It's more a kind of Thatcherite, lean, mean fighting machine excuse for shedding some of the useless fat - very business-like and very business as usual. It's almost as if the richer industry is a fat man shifting about in his seat, trying to get comfortable again.

When a particular industry goes tits-up, there are normally sizable casualties - all I see are lay-offs in certain departments and the normal gobbling up of little businesses by big'uns. I think this is more to do with the general economic climate (see: http://www.guardian.co.uk/commentisfree/cifamerica/2010/may/10/banks-failing-lend-not-problem). Also, the fragmented nature of the music biz means that as one part fails, another takes some of the financial slack.

Put the anecdotal with the stat's, however, and the picture is far from clear. Everyone I meet has a different understanding. I don't think it's possible to put the rumour mill to rest - much more effective to examine your immediate environment and what's happening to the people you want to do business with.

Put some music out - you'll soon find out.

May 11 | Registered CommenterTim London

I think when EMI finally gets taken off life support we'll be seeing the rhetoric get sharply increased.

The Atlantic's resident Wall Street shill Megan McArdle just wrote an article about the horrible fate of the music business and how "The Freeloaders" are going to destroy the future of music:

http://www.theatlantic.com/magazine/archive/2010/05/the-freeloaders/8027

The same stupid as always -- pretending to respond to an opposing side that never gets quoted, cliches instead of data points, reducing a spectrum of options to a binary choice, and lots of hysterical questions that never get answered in the actual contents of the article.

Much more of the same to come in 2010.

I think a lot of what gets discussed about the music business is just the same old stuff, over and over again. I don't see a problem with it being negative. It's just boring.

I'm trying to look ahead maybe five or ten years. I don't see the future of the music business as being the direct-to-fan model. That's really just the major label system on a smaller scale. It's still built upon the idea that artists create and then find fans to buy.

I'm much more interested in crowdsourcing, participatory art, and revolutionary technologies which will bring far more people into the creative process.

The stuff I enjoy reading about is happening at the MIT Media Lab and Stanford's Center for Computer Research in Music and Acoustics.

I'm intrigued by all the iPhone and iPad apps that are coming out that enable those with little or no musical skill to make music.

Point-and-click cameras made photography accessible. Then digital cameras allowed people to take 1000s of photos and not worry about how to get them developed.

YouTube has allowed average people to upload videos. And some of them become viral hits.

Music is likely to head this way, too. (The computer-based recording tools have already significantly changed how music is produced.)

Average people are going to make their own music. Sure, there will continue to be professional musicians, but I think the idea of musicians who collect their 1000s fans is going to become less and less relevant. Technology means we don't need artists to feed us art. So many tools are being provided that it's getting to the point that if you can think it, an application can make it. Some of those creative sparks that we assume only come from the minds of a small group of creative people are being programmed into free applications.

"Technology means we don't need artists to feed us art."

Suzanne, there is a BIG difference between AUTOTUNE and ART.

I'm all for participatory art and bringing more people into the creative process, but what is wrong with finding ways to rebuild the priority/funding of music eductation - with real-life, actual musical instruments and other such novels ideas?

People will always want inspiration from professional creative types (in all art forms), so it is vital for our future musical culture that we find ways to get musicians PAID!

To contend that creative output from part-time, technology- trained individuals can remotely compare to those who have dedicated a LIFE to music and spent the proverbial ten thousand hours (often many times that), is patently ABSURD.

Jazz torchbearer Wynton Marsalis quotes his father as saying to him at a young age "If you want to be a musician don't come and tell me you just practiced six hours a day - until you have practiced six hours a day for TEN YEARS".

Muddy Waters' son said it took him three minutes to learn the chords to one of his father's songs - and three YEARS to even approximate the feel.

We don't expect true excellence in sports, medicine, or any other profession with less than FULL-TIME COMMITMENT.

If the music economy is not strengthened in every (creative) way possible, we certainly will see a decline in the QUALITY OF MUSIC - as Bruce points out, even the pervasive negative perception will drive aspiring artists away...who may just be the next Dylan/ Pavarotti/Jay- Z/name your important artist...

May 12 | Unregistered CommenterDg.

Suzanne, it's easy enough for anyone to pick up a ukele and start making music (that sounds a bit like a mobile phone ad, for instance) right now, in their living room (a bit like a mobile ad...). Plenty of people do. That technology is already very effective.

Dg, the 'quality' of music is completely subjective. However knowledgeable you are you won't take the joy away from someone else's enjoyment of a pop song, however manufactured.

And, after reading the Atlantic Mag article, Justin, I actually feel quite energised. His hysteria makes me feel good. All I can hear are echoes from the past. Jack kerouac's family didn't benefit from me reading all of his books in my teens - they were library books. All the poor bands I taped from John Peel's radio show in the late 70s/early 80s didn't get a penny from me. If the end result of the economic downturn is record labels spending less on recording, that's how it should be - the days of spending a day on the hi hats in Livingstone studio should be gone. If the tour money actually goes on a tour instead of up the nose of an 'indie' plugger, that's how it should be.

I would be worried about the star system, which acts as a driver for some musicians, but there's Lady Ga Ga and the Black Eyed Peas and Dizzy, there's up and coming charismatic artists like Young Fathers who can light up a room. And there are young people, who I meet, in their teens and twenties, who are hungry for stardom.

Keeping it specific helps us understand so much better.

Monetizing... on paper, the ghetto musicians of Kingston, Jamaica didn't stand a chance, living in a country where there were way too any artists for many of them to scratch a living from the tiny population and economy. But there was Chris Blackwell, there were the sound systems, there was emigration to the UK and eventually there's Bob Marley's Legend & Songs Of Freedom going multi-platinum.

A festival in the middle of the Saharan desert sounds like an unlikely basis for a small scene to develop publicly enough for several revolutionary (seriously, as in guns and blood) groups to tour the world (Tinariwen/Tamikrest) for years on end.

In parts of Africa, cassettes still rule.

In Edinburgh, there are about 20 - 30 sets of artists who are as happy to play completely acoustically as to programme beats on Ableton.

I think if we're talking about the industry, we have to be clear which industry. Music might be the common factor but the economic 'model's are all very different.

May 12 | Registered CommenterTim London

@Tim:
Point taken - there are very considerable differences between the major music markets (US and the UK being most prominent), let alone the smaller ones.

I'd like to play devil's advocate, however, and suggest that even for the smallest artist wishing to enter the business, a global perspective is now important.

It is now possible to function on a global scale despite the fact that you may have only local notoriety where you live - I personally am an example. Given the fact that Poland is a difficult market at best, I've given up on trying to make it here and instead I look to where the demand is. Without such information, my strategy would amount to pretty much flailing around in the dark.

@Bruce:
Nothing justifies changing the message to one that makes us feel better if by doing so we veer away from the truth.

To qoute XKCD: "You don't use science to show you're right, you use science to become right". If the numbers we're seeing suggest that the music business as a business is becoming a not-very-sensible proposition (that is: there's little money to be made there), we've no moral right to say "Don't worry folks, it's all fine here." Possibly there is data that would change our perception of the trends, but I haven't seen it.

Saying that one cannot prove that it isn't there is not unlike saying one cannot disprove the existence of God. It's true. However, science trumps prayers pretty much across the board when it comes to getting results in this world. If you wish to retain your faith in the Almighty you're free to do so, but when you're sick you really should see a doctor.

Similarly, when planning to engage in a business, it's better to know just what we're getting into rather than assuming things will work out somehow. The disinclination of musicians to acquaint themselves with business specifics is the prime reason why they found themselves getting screwed over, time and time again - presumably while you're reading this as well.

@Suzanne:
When looking too far into the future, it's easy to lose sight of the past.

For as long as the historical record available to me goes (and that's into the BC age), music was made both by individuals as a hobby and by professionals (especially, if we extend the definition to include travelling buskers). The pros were needed when a higher standard of performance was required (as for ceremonies of all sorts - consider the church organist) or when you needed someone to do the work when everyone else was engaged in more enjoyable activities (take the average wedding - a well-paying, but incredibly demanding gig).

This hasn't changed, nor will it change in the forseeable future; especially, since our demand for music has increased if anything. The explosion of musical awareness due to the emergence of the recording industry is not to be underestimated. The performers and songwriters of yesteryear have set very high standards for those of us who wish to follow in their footsteps and no longer is their music the province of high-society in several large cultural centers. The folks in small, out of the way places have heard them on radio and records, have seen them on TV and are now discovering them through the Internet.

Whatever technology may have done for improving the ease of recording music, it has not lessened the amount of skill needed in the operator - quite the contrary, since the boundaries of what's possible are continually being stretched. Statements that one now has better equipment at one's disposal in the bedroom than the Beatles had at Abbey Road are misleading in that we're no longer competing on sound quality with the Beatles (songwriting is another matter).

We still need people who are willing to make a full-time commitment to music - more than ever, I'd say, but that will depend on them being able to do so, which is an economic question.

Which brings me back to the thrust of the discussion, Bruce. If things are hunky-dory, we've no need to change anything. Hell, we should let the situation continue developing along the present course.

What if we're wrong, though?

@ Krzysztof. There's a camera trick used by the news media where the cameraman zooms, shakes and flashes into a small raucous crowd of tens, whilst the news anchor (from the Breaking News / Situation Room) proclaims that the entire city is rising up to overthrow the establishment. Meanwhile bystanders (never shown) are sipping tea, eating croissants and chatting about the warm weather; completely unaware of the magnitude of the manufactured hysteria.

The interesting thing about the Beatles is that after nearly 50 years of professional pop/rock musicians who have followed them, we still don't have an equivalent. It doesn't appear that having a professional class of musicians is enough by itself.

And since we still have the Beatles' music to listen to, maybe we don't need their equivalent.

Its absurd to think that amateur musicians are going to have an economic effect on professional musicians. Return-on-investment in anything requires investment. And in music this means both skill and promotion. Promotion is hard, and its not something that a kid on youtube is going to undertake. Without it, there will be no audience.

As for viral hits, I consider them to be a myth. One-shot hits on youtube either uncover a talented professional, who then gets some measure of deserved acclaim, or they uncover a lucky amateur who everyone forwards to their friends for two days and then promptly is forgotten about.

Crowdsourcing and participatory art are a possible wave of the future, but the best projects of that ilk always have a strong central coordinator - a professional.

May 12 | Unregistered CommenterJustin

Its absurd to think that amateur musicians are going to have an economic effect on professional musician.

I think it already has. ReverbNation, MySpace, etc. We have millions of people uploading music.

How do Amateur music uploads on myspace effect the economic outcomes of artists? They don't, as far as I can tell. They can provide useful promotional platforms for people, but if anyone is earning a lot of increased income, they're professionnals. Most artist pages on those sites are basically ignored, and If they aren't, it's because the music is good and the artist is putting a lot of effort into promotion, i.e. they are not amateurs.

I'll certainly agree that there are more pros now than there used to be, as well as more amateurs. But amateurs are not attracting audiences away from pros. Amateurs are ignored until they evolve.

May 12 | Unregistered CommenterJustin

Every artist or band that decides to upload music and/or play gigs is going to be looking for fans. Each of them is going to approach friends and family and neighbors to support them. And most likely they will get support from those people. The friends/family/neighbors who don't go to shows all the time and who don't buy lots and lots of music are likely to focus on the bands that they know personally rather than to come out to support others. So the more people you have aspiring to careers in music, the smaller the pie for most of them.

I'm someone who will go see local bands that I know rather than national bands. I like supporting the locals.

Most bands I know think of themselves as professionals. They may still have day jobs, but they aspire to playing full-time. So they are compiling mailing lists and promoting themselves just like everyone else. They are all using the same promotional and marketing techniques. If you have a pool of local bands that was once 300 and now it's 3000, the audiences are being divided up.

Does the pie really shrink? There are more bands touring now than ever. Music collections are getting bigger, not smaller. Streaming music facilitates an even wider variety of listening choices. Etc. It does not seem to be a zero sum game? Yeah, you can only pick one show on a Saturday night, but if you go to live shows regularly, you are going to go to the best show option for your money..

Does the pie really shrink?

Over the years we have added many more entertainment options. Plus we are spending on new tech tools and monthly fees to use those tools. Given the current recession, I don't see how it is possible that we can do it all. If you've bought a new big screen HD TV, you might choose to stay home and watch it rather than go to a music club.

It's not just that music spending is shifting from one form of music consumption to another; all entertainment spending is going to a wider variety of options these days. So money saved on not buying CDs won't necessarily go to musicians. It may go to games or movies or sports or travel or eating out, etc.

I don't mind that everyone doesn't agree with me. But think back when MP3s first came on the scene and the labels didn't think it would affect them. I'm saying that new music creation tools will impact musicians. Some of you are saying, "No it won't. We'll always have professional musicians who can make a good living at this."

The most visionary stuff I'm seeing in music is coming from the researchers at universities creating new music tools. Their goal is to enable more people to make music, and I think they will succeed.

I think we all agree on whats happening to the industry, but disagree on where its heading - its not much more complicated than that.

Bruce, I agree that the expanding of the entertainment industry in general gives musicians more opportunities than it takes away. Suzanne, I think that your prediction can be true, but only within the temporary conditions of a down economy.

Any person looking for "new opportunities" in an industry had better hope that their sector of the economy is doing well. And right now, almost everyone is doing poorly. But demand for music itself has not been impacted, and people will (capitalism willing) find ways to profit off the current system through the product of music.

Do you really think that entertainment will become less of what people spend their money on for that long? Smart policy or not, people are going to be spending more money than they used to on entertainment, in the long run. That's what the economy has always done.

May 12 | Unregistered Commenterjustin

Do you really think that entertainment will become less of what people spend their money on for that long? Smart policy or not, people are going to be spending more money than they used to on entertainment, in the long run. That's what the economy has always done.

If you mean more in actual dollars, yes it continues to go up. If you mean in percentage of what consumers spend, it has remained about the same percentage of consumer spending over the last 100 years. (I went looking for the chart, but haven't relocated it yet. When I find it again, I will post it.)

But entertainment spending has really changed in terms of where it goes. Now we spend on cable TV. We spend on Internet connections. We spend on cellphone connections.

Technology continues to drive down the cost of creating music, which allows many more people to do it. That's a very good thing in terms of society. It means everyone gets the tools to make and distribute music. And people are doing it. I'm just projecting the trends out to the point where everyone will have a portable music-making tool in their mobile device and they will use it for their own amusement, as a form of self-expression, and as a way to build community.

I don't think anyone would have predicted a few years ago how much YouTube would change entertainment consumption. Here are some interesting statistics.

YouTube v. MySpace Music: What a Difference Two Years Makes... - Digital Music News

I did find that info on entertainment as a percentage of consumer spending. As you can see, the percentage has remained pretty stable.

100 Years of Consumer Spending

And here's one for a shorter period. In this chart you can click on the interactive page and zero in on entertainment. It has hovered around 5%, although it did take a bit of a jump (to about 6%) in 2008, the last year available. My guess is that it has probably gone back down to about 5% or maybe even a bit lower in the last two years. (During the recession people definitely cut back on going out and attending sporting events, and some also said they were reducing spending on cable.)

Past 25 Years of Consumer Spending

Even if they aren't spending a greater proportion of income on entertainment, expansion of of an industry will continue so long as more dollars are flowing into it. Every industry on that chart expanded over that time period, even the ones who's proportion of spending shrank.

May 13 | Unregistered CommenterJustin

First off, I totally agree with Justin that the amateurs do not have a significant impact on the professionals.

I'll keep harping on about distinguishing between entry to market and effective competition - just the fact that someone is able to put their music up on the Web does not imply that they will achieve any significant revenue with it. Quite the contrary, the vast majority of tracks on iTunes, for instance, haven't sold a single copy. 90% of the revenue from legal services is generated by a mere 5% of available material. We have to concede that the lion's share of music available contributes nothing to the market dynamic.

Again, it's nothing new - it's all those garage bands that used to be hidden from public perception unless you happened to know someone who played in one of them. Now you can find them on the Web. I seriously don't believe that there are more people making music today than prior to the Internet - there may be more people recording now, but I'm guessing the percentage of population actually willing to devote the time to pursue music as a hobby (to the extent of actually getting a garage band together) is the same as was in the past.

Looking at the figures Suzanne supplied, it's probably a safe bet to say that entertainment spending in real terms will tend to remain stable. Given the fact that there are more entertainment options now, it is pretty likely that the pie is shrinking - that is there's less music-related spending to go around. Anyone got any numbers that show people are spending more money on music? There are more people showing up with plates and forks, but most of them will get squeezed out in the line.

@Bruce:
What was your point with that camera thing again?

Here are some figures to suggest the live music revenue is still going to mostly top acts, rather than up-and-coming bands:

BBC News - Festivals thrive in concert boom:

WHERE THE GIG MONEY GOES
Arenas - 37% of total live music revenue
Mid-level venues - 21%
Festivals - 19%
Stadiums - 11%
Clubs - 11%
Parks - 1%
Source: PRS For Music

"revenue is still going to mostly top acts, rather than up-and-coming bands"

First of all, why does this matter?

Second, given what PRS is capable of easily measuring, it tells us something.. However cumulatively across all artists, all revenue sources, and all venues, why do we take reports like this as the "truth", or even as meaningful? These numbers (above) should be accompanied by obvious footnotes that state "given what we are capable of measuring (which is probably not much), here you go..."

There's no way on earth to measure / count all the revenue from all sources/venues. Moreover, I would (I do) argue that compared to all artists measured "cumulatively", all the numbers stated by all the reporting authorities do not paint an accurate picture (it's way off) of the marketplace.

If measuring "cumulatively" means nothing to anyone, than everyone should stop parroting that measurable stats that are released via reports like this, as it's nothing more than an accumulation of what they are able to easily measure. Pleas stop and consider where the reported numbers come from and how they (anyone) obtains them.

"revenue is still going to mostly top acts, rather than up-and-coming bands"

First of all, why does this matter?

Mike Masnick and others have been quoting the PRS as proof that while recorded music revenue may be down, live music revenue has gone up.

Some of us have pointed out that in the past there was no breakdown as to where the live music revenue was coming from and that we suspected it wasn't benefitting all musicians equally.

So now we have some PRS figures that show that the venues and events frequented by bigger acts are contributing most to the PRS live music figures.

I don't mind if we say we don't know what is happening in music, but if you are going to site PRS figures as proof of anything, then it is good to explain how those numbers are generated.

I don't accept discussions where people pull out numbers to say, "See, everything is great." And then when we question the numbers, we are told, "Well those numbers don't really matter after all."

site PRS

Oops. That should have been "cite PRS."

Bruce, thanks for asking why we have these circular conversations on "the numbers" to begin with. Got me thinking, and I like that.

I've noticed, since I came back from a way-too-long hiatus, that I am not nearly as interested in the Big Picture as I used to be. I think I know why: we've got our own data now. I have no interest in anyone else's charts -- just how my own roster is doing. The demographics of hip hop are meaningless numbers for a collective as strange and distinctive as World Around.

On that same note, I've gotten a lot of requests to update some of the old "Big Picture" articles on Audible Hype and instead, I'll be doing an article explaining why I think that's pointless: All that matters is your music, your organization and your audience. I've been bouncing around this country long enough to see that everything has an audience somewhere. Although I'm very skeptical of long tail/social media cheerleading, here's definitely some beautiful truth to the fact that artists who could never "make it" locally ANYWHERE can find a national audience instead.

That's pretty cool, and it's a lot more important than the soap opera being played out between EMI and Guy Hand's Ego, or impending collapse of the LiveNation business model. And as we've established here on MTT, the good old Billboard numbers mean less than ever, every day.

BUT. When an artist doesn't have their own system in place, I can definitely see why all of these numbers would seem important. I was there about 12 months ago. I didn't realize how much my perspective had changed until I saw your question this morning.

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