Quote:
Originally Posted by kermitology
Labels are the biggest issue by far, and yes, most bands make their money (as a band) from touring and merchandise sales. But I think that sites like Rdio and Spotify will soon open up a method for getting your music to the masses without going through a label. Why not go directly to Rdio and licencing your music to them so that YOU get the fees directly, not the fraction that the label drops on you like crumbs.
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It's not so much the labels not giving the bands money as just the result of the different royalty rates that exist and the realities of the medium. With the low prices and unlimited nature it's basically impossible to generate much in the way of royalties.
When someone buys a song (pretty much regardless of format) the songwriter gets about 10 cents from each sale. So when you buy an album by someone who writes their own songs, that artist gets about a dollar right off the bat, irrespective of whether they're on a label or how crooked that label is. Songwriting royalties from music sales are more or less written in stone.
When it's streamed on something like Rdio, however, they only get a tiny fraction of that (I think it's something like 2 to 4 tenths of a cent) which means you need dozens of plays of each and every song on that album from every single person who would've otherwise bought it just to break even. If that was happening it wouldn't be an issue, but it isn't. And the royalty rates can't really be any higher because there simply isn't the income to warrant that in the current model.
Take a band like Arcade Fire. 10 years ago they'd probably sell a couple million albums assuming a similar level of relative success (#1 album, stadium tours, etc.), but now they're at about 500K an album. And that difference is not even coming close to being replaced by streaming. On Rdio their last album has a few hundred thousand streams which results in a pittance of royalties amounting to a few thousand dollars. Even if you multiply that by the competing services you're still talking something in the low tens of thousands of dollars where there'd once be millions in royalties. Now no one should feel sorry for Arcade Fire because they can make millions off of touring, but that same math applies to smaller acts who could once make a meager living off of touring and royalties but have now lost about 70% of their income from royalties (and this will continue to drop as more and more people opt for streaming services as opposed to buying music). And the corollary of the evaporation of royalties as an income stream is that more bands are touring more often which dilutes the money they can make off of that as well.
Services like Rdio are amazing for the consumer because they offer vast amounts of music for basically nothing, but I question whether they're sustainable. Most good musicians aren't in it for the money, but the reality is if someone can't hope to even earn a meager living from music they're probably not going to be able to devote all their energy to it. Most independent artists certainly weren't getting rich off of royalties, but even small amounts of money can be the difference between being viable or not. I honestly wouldn't be surprised if in the future that successful musicians will generally come from privileged backgrounds.
That's not to say that anyone is entitled to make a living off of music or that we should feel sorry for anyone, I just take issue with the notion that streaming services that charge basically nothing and pay even less in royalties are good for artists.