I found an interesting Blog post the other day that seemed to cause major disagreement between musicians on the subject of record deals, specifically whether musicians needed a record deal at all nowadays. The original Blog was entitled, Do Social Networks Really Help Musicians? It makes the point (in a round-a-bout way) that social networks create so much opportunity for musicians that overcrowding, by and large, negates the benefits for the masses.
The underlying assertion of the Blog was that the power of social networks for band ‘self promotion’ was generally over rated and could not be compared with the benefits of a record deal, (especially where earning a sustainable income was concerned).
The author went on to showcase three websites that he felt helped reduce overcrowding and thus create more tangible opportunities for musicians. You can view the Blog on the Music-Think-Tank website here: Do Social Networks Really Help Musicians?
For me, the Blog caused confusion because it didn’t present the underlying question succinctly enough. I have to confess, I was tempted to leave a comment to stock up debate further by asking a wishy washy question like, “what is success?”, but I decided instead to exercise the logical and analytical side of my brain by putting together some kind of statistical analysis on the record label vs DIY musician debate.
You may have noticed that the Blog I mention above has prompted a follow up Blog called “Do Social Networks Really Help Musicians? Revisited”. This follow up failed to deliver in some areas of the debate in my mind. I explain at the bottom of this Blog why I wrote this article.
Let’s begin! The question I want to answer is clear and concise; “What are the odds of succeeding without a record deal?”
Before we look at figures, we need to start by reducing any ambiguity surrounding certain facets of the question. I will make the following assumptions;
The word ‘Success’:
To succeed means many different things to different people, including notoriety, personal development, the number of ‘Likes’ on a facebook page etc, but for the purpose of this exercise I am using the word ‘Success’ to describe a level of financial freedom.
My reasoning for this is because most musicians (eventually) give up their art, not due to a lack of notoriety, but due to long periods with little or no income.
Type of musician:
When I speak of ‘musician’ or ‘band’, I am referring exclusively to those who are seeking a professional music career. I understand that there are thousands of musicians who happily play in a band every other weekend without ever thinking of fame or fortune, but this research paper refers to those musicians who aspire to reach a level of fame performing their own original music.
Record deal:
A “Record Deal” means either a major or independent label that has a reasonable marketing budget (and knowledge) to create a national buzz.
Territory:
This research paper is written with the UK musician in mind. However, it’s findings may loosely translate to USA musicians and other territories.
So, with that all cleared up we have to start with the question, is it possible to quantify the need for a record label at all? Probably not, but it’s fun to assert some basic statistical data into the argument posed on the Music-Think-Tank Blog here.
Unfortunately there is very little ‘official’ data online relating to some aspects of this research paper so please bare with me as I fill the data gaps with ‘most likely’, and ‘probable’ substitutes.
What is a successful band?
Our definition of success refers to a level of financial income, all other notions of success will be too subjective to work in this research paper. So what is a successful amount of money?
I will start by placing the average UK income (for a person between the age of 18 and 30) at £18,200 (based on several recognised national statistics)*. The reason I chose this age range is because it’s the most common range for success in the music industry.
So, for the purpose of this exercise £18,200 will be used as the definition of ‘financial success’.
This amount of money is of course conservative because one would expect ‘success’ to be way above ‘average’, but we will stick with it for now. The definition of success ‘should’ only apply to those bands that can sustain the average income value for more than 5 years. But for simplicity we will accept even a one-off yearly income of £18,200 as a marker of success.
Quick answer to question: £18,200 is our marker of success.
How many musicians and bands in the UK are aiming for success?
This is much harder to quantify. The Musicians Union have approximately 30,000 members. Since they pay a subscription fee we will assume they are serious and aiming for a degree of success. It is my estimation from talking to countless ‘serious’ bands over the years that perhaps only 1 in 20 musicians join the MU. This would immediately raise the number of musicians aiming for success in the UK to 600,000.
Quick answer to question: 600,000
Income from gigs
Since we are describing ‘Success’ as achieving a gross annual income of £18,200/year (per band member), live gigs must surely play a key role in this. We will not include covers bands, wedding or corporate events bands. For the purpose of this research paper we will use the term ‘band/musician’ for those who want recognition for their own original music.
The average capacity for a venue that houses mainly unsigned bands is 250 in the UK.* The majority of venues will increase ticket sales by hosting 3-6 bands (on average). Assuming that a venue is 80% full and has 4 bands performing, each band would therefore have bought 50 people.
After speaking with approximately 30 diverse bands from London, I have estimated that the average band brings in much less than 50 paying fans on average. I will be setting the average paying fan count (per gig) to just 15.
Bare in mind that this would be the average number of paying fans that turn up to every gig, whether in the bands local town or 500 miles away. Many bands will bring 40 fans to local gigs but find fan counts drop dramatically the further afield they play.
There are several ways that bands can be paid by venue promoters. The average payment however seems to work out at about £6 per fan.
There is no data on the average band size, but I am setting a generic band size of 4 people so that we can work the statistics.
With these assumptions we can see that the average band will be paid £90 per gig (£22.50 for each band member). Based on two (2) gigs per week, the gross yearly income for each member would be £2,340, far lower than the UK average wage. This also pays no mention of travel costs or gear hire etc.
Gigs generally provide more income for signed bands than the sale of records. In fact, the number of people going to gigs has increased over the last 10 years, whilst record sales have decreased. Ticket sales can generate huge incomes for large music acts.
Let’s look at a Robbie Williams gig in August 2003. He performed at Knebworth with 3 other acts and 125,000 tickets were sold. I am not sure on the ticket price but I will set the average tickets sale price at £45. That means on one night they generated a colossal £5,625,000. This doesn’t even factor in the sale of programs, merchandise, food etc.
Quick answer to question: £2,340 per year (per band member)
Money from downloads
The UK average monthly income is £1,517. How many downloads would a band need to sell in order to reach this figure? Assuming, once again, that there are four (4) band members, they would need to make a total of £6,068 per month to match the UK average income amount.
If selling exclusively on iTunes (which pays roughly 60p per single download), a band would need to achieve 10,113 downloads each month. This would equate to 2528 per week.
I am guessing the ‘average’ amount that an unsigned band makes from downloads is £10/month (per band member). If we add £120 from downloads to the £2,340 from gigs, we can guess that the average band member makes £2,460/year.
Quick answer to question:: £120 per year (per band member)
How many unsigned bands make the Top 40?
So how can we tell how many unsigned bands do reach the golden figure of £18,200/year (per band member)? I think the issue here is overall band ‘reach’, ie. how many fans a band can sell tickets, downloads and merchandise to.
Reaching the UK Top 40, for example, shows a clear indication that a band would have a substantial fan base.
So, it begs the question, how many bands have reached the top 40 without a record deal in last 5 years?
In the last 5 years (2006-11) I estimate that there have been no more than 20 bands reach the top 40 without record label backing. This figure is a guess, but is backed up by Ditto music, who are one of the few companies that have successfully broken unsigned acts in the UK.
Ditto go on to suggest that, “without record label backing, you would need substantial financial backing to have a serious shot in the industry”.
So why such a low figure? Mark Robinson, vice-president of Warner Music said that “on average, it costs £621,000 to promote and launch a new band”. This marketing budget would be out of reach for almost all bands.
Certainly, there have been many bands who have succeeded with far lower budgets than this, but breaking an act is undeniably costly. PR plays a role in this cost. A band cannot make it to the higher levels without having media contacts. The whole process is much more time consuming and involved than many musicians think. Unless you employ someone with media contacts and experience many marketing avenues will simply not be available to the average band.
Recording, touring, promotion and PR costs add up. Most DIY musicians struggle to turn enough profit to fund growth and fail to gain enough exposure to generate real momentum.
Quick answer to question: 20 bands
How many unsigned bands make £18,200/year?
We have made a guess that (20) unsigned bands managed to reach the UK top 40 in the last (5) years. Let’s assume that just (5) of those bands earned £18,200/year (per band member) in the year that they charted.
Let’s also assume that ten (10) more bands in the UK have generated £18,200/year (per band member), this would give us a total of just (15) unsigned bands that earned £18,200/year (per band member).
Sounds dismally low right? I’ll admit that there is precious little data to go on, but do you know any bands making this kind of money who are unsigned? Remember, an original four piece band would therefore need to generate £72,800 per year to qualify, I am guessing that is extremely rare.
With the information outlined above we can begin to answer the question, “What are the odds of succeeding without a record deal?”
The chances of an unsigned band earning £18,200/year (per band member) without a record deal is 0.00025%. (Assuming there are 600,000 unsigned bands in the UK and only fifteen (15) earn £18,200 per year (per band member).
Quick answer to question: 15
Increasing the odds of being successful in music
I feel that this article may give a disproportionate indication of how hard it is to succeed in the music businesses because we are looking at averages. Whilst music is subjective, a good song is (usually) recognised as such by multiple people. This means there is an element is “objectivity” at play. In other words, a band with great music will have much better odds than an ‘average’ band (assuming all other factors such as determination, consistency etc are equal).
So, what action can a band take to increase their chances of success in an overcrowded market? I will revert back to the Music-Think-Tank Blog once more and agree with the author that moving against the crowd can in some cases be very advantageous.
Creating music that is of high quality, yet different in some respects will instantly give you a unique selling point (USP), which is very important in standing out in a saturated market.
What are the odds of getting signed?
The problem with statistics (where unique talent is concerned) is that they can often be way off.
For example, let’s look at the likelihood of securing a record deal in the UK. We will assume the following;
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There are roughly 700 independent record labels in the UK large enough to ‘break an act’
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Each signs 1 acts per year
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There are 600,000 bands vying for their attention
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1 in every 4 acts signed make £18,200/year (per band member)
Assuming you are average, you would therefore have a 1 in 3428 chance of being signed (0.029%). However, lets make some further assumptions on the quality of the song submissions;
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34% of song submissions are not right for the label (wrong genre etc)
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39% of song submissions are of low quality
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10% of song submissions are not considered for other reasons
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17% of song submissions are considered for signing
This would mean that talented bands would have a more attractive 1 in 582 chance of getting signed. Of course, the record label would be looking for much more than a good song, ability to perform live, being nice people and reliability etc would all go into the decision making process.
Another huge factor in getting signed is getting noticed. Many A&R will not be able to listen to all demo submissions. This would provide a strong argument for submitting multiple demos to a wide range of record labels.
Quick answer to question: 1 in 3428 (for an average band)
Chances of getting signed through a Pitching website
The Music-Think-Tank Blog mentioned 3 websites that the author felt could increase the chances of getting spotted by the music industry. Those websites were, Audio Rokit, Band Camp and Sound Cloud.
Audio Rokit is a ‘Song Pitching’ website.* A basic profile page is free, a full subscription starts at £6.99 per month which gives members access to the listed opportunities. There is no charge for each song submission a member makes.
Bandcamp gives bands the means to sell music online. The basic service is free, there are no signup costs, and no subscription fees. Bandcamp make money via a 15% revenue share on sales. In May 2011 Bandcamp artists made $624,572 USD.
SoundCloud is an online audio platform for music professionals that makes it easy to share and comment on audio files. As well as a free membership tier, SoundCloud has several different annual premium paid subscriptions which offer additional functionality.
*Effectively a song pitching site will show it’s members current opportunities that exist within the music industry and make it easier for them to submit (or pitch) music to those opportunities.
With relation to this article I decided to take a closer look at these websites to see if any data could be gathered.
It makes sense that using a song pitching website would increase the odds of getting spotted by the industry.
We discussed earlier that ordinarily many A&R will not be able to listen to all demo submissions, especially those that are unsolicited. Pitching websites however, have (in theory) secured legitimate listings from record labels (and a variety of other music companies) that are actively in search of new talent. This would therefore put weight behind the argument that pitching websites dramatically increase the chances of a band being listened to and spotted.
I managed to glean (after many telephone conversations with pitching sites) that the average percentage of members that get their music listened to by A&R is about 85% (very loose estimate) and the average percentage of members that end up signing a deal using a pitching service is about 1% (even looser estimate).
The main problem that pitching sites have in providing useful data is that they are not always aware when one of their members has success. I took the total number of successful feedbacks and added 20% to get the figures above. I can not give a success rate for individual websites because my figures may not be 100% accurate and thus would be unfair.
If it is true that 1% of artists sign a deal (record, management or publishing) using a song pitching website, that would suggest that the pitching website would increase the odds of success by 34 times, or 3400% (compared to an equivalent band submitting unsolicited music via email or post).
I find it hard to believe that 1 in 100 bands get signed using pitching websites, but even if I were to slash the success rate by half, that would still make song pitching sites a pretty indispensable tool for musicians.
Quick answer to question: 1 in 200 (for an average band)
Chances of success through Bandcamp/SoundCloud
I would love to be able to give you some data here but it is simply impossible. On Bandcamp there are musicians making no money at all and others who are making thousands a month. I tried to find out if the people making over £18,200/year (per band member) on Bandcamp were already signed by a record label. Bandcamp replied to my email saying that there would be no way to find that information out.
Same issue with Soundcloud, they said that they couldn’t even guess to what percentage of users go on to sign any kind of deal. To be honest I wasn’t expecting an answer at all, I can fully appreciate we are roaming into the hypothetical here.
The social network debate could not even be answered by taking a sample of users and using that as a base count. For example, if I asked 1000 social network users if any of them had manage to earn £18,200/year as a result of using a social network, I bet none would have.
However, it would be wrong for me to conclude that social networks have helped no one. 1000 social network users is a lot, but proportionately it is too small a number compared with their user base. It would be like asking 1000 people if they have won the lottery and concluding that no one ever wins the lottery because they all replied no!
Final thoughts
The assumption that social networks are great for building followers, but don’t deliver much of real substance for a band wanting to make money may indeed be true, but social networks should be used in ways that they were designed for. Facebook and Soundcloud certainly play a large role in becoming part of the ‘eco-system’, but they should be used alongside other tools.
We know that gigging is vital to the success of a band, but with such low income available to the average musician, it would make sense to build a local following before going too far afield. The benefits of ‘breaking’ new ground is usually overestimated and costly. Build a loyal local fan base and extend your gig radius slowly but surely. Keep fans updated and offer interesting give-aways (behind the scenes video footage) to build loyalty and interest).
Think about using song pitching websites (AudioRokit, MyHitOnline, TAXI) to focus your song submissions.
I want to make my own opinions clear that I genuinely believe that musicians are better off (on the whole) signed to a record label. Sure, they will take a big cut, but they will almost certainly generate more income for you than they take.
Let’s say a label takes 50% of your income. Going on the statistics in this research paper, that would mean that so long as they increased your annual income by £1,230, they would have paid for themselves (since you were only earning £2,460/year to begin with).
Yes, you might have gone on to sell millions of copies of your album on our own (and therefore lose 50% of potential profits), but the odds are against this happening – and even if it did happen, the record label would simply capitalise on your new found success and increase your success further, possibly making up for the percentage they take.
There is a clue in how successful unsigned bands seem to end up signing a record deal, there is great advantages with joining forces with a label, I don’t think anyone would disagree. Fundamentally a record label is like a music manager an accountant or even a hairdresser. You pay to have a professional do the jobs that you don’t have time to do, are not trained to do, or simply do not have the natural inclination to do.
I would argue that a band that is supported by a record label will have more scope for success than a band that shuns all notion of signing a deal.
My Background
I am studying music law in London, UK. I have a passion for data and was able to exploit the information I have gathered for this Blog and use parts in a larger paper I am working on. Ordinarily I may not have gone into so much detail!
I played guitar for many years and it wasn’t until I moved away from playing an instrument that I really saw where I had been going wrong with my music. I had always followed the crowd and moved in common circles, instead of trying to position myself as unique in some way. I felt like I had wasted many years which is why this Music-Think-Tank Blog really struck a chord in me (pun intended).
The first follow up Blog Do Social Networks Really Help Musicians? Revisited seemed a little self promotional to me - although I see nothing wrong with that provided the content addresses the correct issues. I didn’t see much connection between the original Blog and the revisited Blog. The revisited seemed more of a ‘How-to’ rather than revisiting the social network debate.
Odds of success - Bands DATA table image
Feel free to post this image on your website!
References for this post
Venue capacity - To come up with this figure I looked at almost 100 UK venues and averaged out the capacity for a standing audience.
Average earning statistics:
http://www.dailymail.co.uk/news/article-1293121/Average-annual-salary-drops-2-600-just-months.html