The intricacies of the music industry recently stumped a Nobel Prize-winning economist. The New York Times’ Paul Krugman, sharing a panel with members of Arcade Fire at this year’s South by Southwest music conference, told attendees that successful musicians continue to make most of their money the centuries-old way: live performance. As with the rest of society, though, the lion’s share of that income is increasingly going to only a tiny elite. “I actually don't quite understand how the bands I like are even surviving,” Krugman said. He was being self-effacing, sure—but probably not entirely.
So: What is music worth? As Krugman’s improbable-enough SXSW presence shows, the question has gained renewed prominence as of late, from celebrity-stirred discussions about online streaming to last month’s $7.4 million “Blurred Lines” jury verdict. The answer, however, is a moving—if not almost invisible—target. Putting the debates about artists’ income from Spotify, Pandora, and their ilk in a broader historical context, it becomes clear that the money made from a song or an album has clearly decreased over the last several decades. What’s equally clear, though, is that the value of music is almost as subjective financially as it is aesthetically; the economics of music, it turns out, is more dark art than dismal science.
steve's opinion:
Art doesn't pay.
music, literature, sculpture, film, photography, dance, painting...
Art is Art.
business is business.
The tiny fraction of artists who are able to make art they believe in whilst making a living wage are one of three things:
1 - ridiculously fortunate (lightning strikes once in a while)
2 - so talented that they have broad appeal and enough people are willing to pay
3 - making art that they may not entirely believe in - but it pays well and see point #1.
Most successful artists that I am aware of fall into one of those three buckets. There are probably more buckets. And I don't know what I'm talking about. This is just the rambling opinions of the village idiot.
If I ever go to grad school - my dissertation will be titled: God Hates Artists
The economics of music are fucked on every level. While this article focuses on national and mainstream acts, for no-name and upcoming artists it's even worse, and when they do make money it's basically voodoo.
I play in a band in a scene where there just are no paid gigs for us. Metal/hardcore is not the kind of music where you can play a restaurant and draw people, play weddings, cafes, busk or anything like that, so there's no one wanting to throw money at you. At best we play for free beer and make up our costs by pushing merch. There is a scene here though, and you can get people to come out. But even at an event that gets decent turnout and the promoter is charging $5+ at the door, it's not like you're going to see any of that cash. Presumably it goes to venue rental fees, promoters' pockets, and that's $5 that people are less likely to spend on a shirt inside the show. There is no trickle-down economy in my scene.
I do know that there are acts that do regularly get paid though, or styles where it's expected that money will come in eventually. Bands are businesses. Even our unprofitable one we treat very seriously as a business. A cover band can expect to be hired to play gigs at bars, restaurants, weddings, what-have-you. I hear talk from many people in such bands that they would not even consider playing for below a certain sum of money. And yet, I look at some of these acts and I don't see them making any more economic sense than what is in my scene. These same people that won't play for less than $300 a night complain about bar doormen counting their pull, or being forced to drag friends and family out to the venue to see their show (something we regularly do which is the vital force of our shows). If there were religious bookkeeping on those numbers I doubt that many of these paid acts would actually draw more cashflow into a venue than the bands in my scene. There's a whole discussion on a musician's board (who play these paid gigs) about how none of them would go out to see a cover band.
If I were a restaurant owner, I'd be very skeptical that any band playing my dining room would be worth $300+. They'd have to pull in more than that much in sales by their presence, and I don't think many bands can do that. I don't know a lot of people that would just walk into a bar/restaurant just because live music is there. Yet there is still pay out there for it. On the other hand I know my band has moved more than a grand for shows in tickets and merch. There's no logic being applied in the economics of local music. It's utter ridiculousness.
Excuse me for being a little off-topic, but there has been some discussion on this site about piracy lately. How do you personally feel about it?
I haven't really caught any of that discussion, but I have no horse in that race. It's not likely to impact us anytime in the conceivable future, and if it does, having one more person listening to our music is probably a bigger gain in the long run than a sale. From what I hear, most artists don't make much money off music sales anyways, so it's really labels that are being hurt, but that's where they make their money. And I do appreciate the existence of labels. I've come across a lot of unsigned bands that go on tour, at a loss, to play to empty rooms. Labels ensure that you play to an audience and come out ahead, because they are invested in your continuing success. So I don't pirate. I'm not overly concerned about it though.
The best-kept secret of the music business is that most bands really aren't surviving. A popular indie band can go on national tour, and still lose money. Throughout history, few people have been able to survive as professional musicians. That is unfortunately still true today. Now, it's just easier to gain a taste of popularity that will fool you into thinking that you should be able to survive from your music.