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.|
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