Tuesday, October 4, 2011

let the good times roll

Several months ago  I came across a blog post, shared via twitter by one of my very favorite independent artists. He seems to be a smart guy, so most of the time I follow where he leads, and I was absolutely fascinated by this post on Release Day Economics [please don't stop reading just because I used the word economics.]

For some of you, this probably doesn't mean anything. You're consumers, and you will keep doing what you do... consume. And you'll consume in the easiest, cheapest way possible.

Well, I am a consumer too. But I am also a lover of the art of music. Most of the time, I will choose to buy the actual album, rather than the digital version - I like having the art of the record in my hands. [weird, I know.]
I want this someday.
So, when I read this blog, I found myself forming very firm, very strong opinions about how I would purchase music and how I would choose to listen to it. [This post was written from an independent band from the UK, and since most of the music I consume comes from artists that aren't signed to major record labels, I'm operating on independent music standards in my opinions going forward in this post.]

Let's recap:
While the post I read is written in Euro's, the percentages are the same in US Dollars. A consumer can purchase music in digital copy through venues like iTunes, AmazonMP3, NoiseTrade, or eMusic. A consumer can stream music through venues like Pandora, Grooveshark, or Spotify. And a consumer can purchase physical versions of albums [whether that be CD or vinyl] straight from the artists webpage, a merch table at an actual concert, or possibly websites like CD Baby or Bandcamp.
Digital purchases generally hold to a 70/30 split - so if a consumer purchases a whole album for $10 on iTunes or AmazonMP3, the artist will get $7.00 of the purchase.
Websites that allow you to stream music are a bit different - each site is different, and for most of them [this includes satellite radio], an artist has to be registered with a non-profit performance rights organization called Sound Exchange before they can get royalties from plays. [if you're at all interested in any of this, take a few minutes to read through the Sound Exchange Wikipedia... it's very interesting.] Pandora & Spotify pay artists more than Grooveshark, and the only label that Grooveshark has a legal agreement with is EMI. Pandora has a license for all the music on it's site - Grooveshark does not. Additionally, Grooveshark may have a licensing agreement with EMI & one independant label, they do not pay the songwriters royalties.
Each time you listen to a song on Spotify, an artist receives .0002 cents. That's right, not even a whole penny. A year ago, Lady Gaga had netted the largest pay from Spotify and it was a whopping $167 for over 1 million plays.

For a physical album - the costs to make the record are relatively inexpensive [not necessarily recording - studio time is by far the most expensive element - but the production of the physical product.] The actual CD will cost around a dollar and a half while the booklet will cost about .50 cents and the packaging almost $2. That's roughly $4 for the whole ordeal. If an independent band spends $4 to make the album and sells it for $10, they make a rough profit of $6. However, a lot of the time if a consumer is purchasing the album from a website, the artist is most likely using PayPal. PayPal will keep about 19% of the purchase, leaving the artist with a profit of about $4.10.


I feel really icky about using Grooveshark [and I really love Grooveshark. It's so easy.] And now that I feel all in the know about it all, it seems morally irresponsible to continue using it. I'm also not impressed with Spotify's numbers - and man, everyone is talking about Spotify. Honestly, you get people to PAY for Spotify and the artists still only get LESS THAN A PENNY each time a song is played??

What do you think? How do you listen to music? How do you purchase it?

*some interesting contributors to my thoughts:
This NPR post on how much a major label spends on making a hit song
Bandcamp allows artists to let consumers choose how much they pay for the album. And they don't charge the artists anything for having a page on their site. 

Let the Good Times Roll, Ben Rector


Anonymous said...

Man, I am super weird about buying music too. I always save the booklet when I buy a cd, I ALWAYS want the physically cd even though I only listen to an ipod/iphone now. I don't have a record player but I did know I'd buy records over mp3s in a heartbeat. There's just something about opening up a new cd. The paranoia about computers, internet or digital media somehow going away and me losing a collection I worked hard to build. It's like a die hard hobby! Most people just want to hear music, I think. I want to own it, know everything about it, hold it in my hands. All that crazy unnecessary stuff I am all for. Feist came out with a new album which I've been dying to hear and rather just buying it on itunes and having right away I wanted to have the cd sitting there along side her other two albums so I'm waiting until I can drive somewhere and get it. What are you ganna do?

ruminations of a redhead said...

Martha, I am right there with you. I have learned to appreciate iTunes, but I try to make a copy of the albums I buy (it's not the same, but it makes me feel better - and it's legal through iTunes). It is absolutely a die hard hobby!