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Music Industry Snapshot

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LABELS

Are doing quite well. The majority of their income comes from subscription services, and subscriptions keep going up. Sure, there has been some churn as a result of Covid-19 financial issues, but it is relatively small. So, if you’re being paid by the streaming service, expect this to maintain.

As for the distribution of monies…

Deezer plans to split subscription income based on what the subscriber listens to. I am sure if this raises the income for less popular artists it will become de rigueur in the industry. However, a few years back economist Will Page ran the numbers and said it would make no difference. So, it hangs in the balance, we will find out. However, if you are less popular on streaming services, do not expect a huge bump in royalties employing the Deezer method. You don’t have as many fans as you think you do, streaming only your music to boot.

ARTISTS

Recordings are not the main driver of your income unless you are a superstar. If you’re Drake, or the Weeknd, you’re making tons of dough. If you’re not, forget about it.

As for the stories of tiny streaming payments… These have died down, but they are riddled with inaccuracies.

One, was it streaming radio or on demand? Streaming radio pays less. And to complicate things even further, Spotify has a streaming radio service.

Second, how much of the song does the complainer own? Do they own a concomitant percentage of the publishing? And what period does the statement cover, does it represent the peak of the song’s use?


Sure, there is stuff that falls through the cracks. Sure, there are occasional mistakes. But that is not the dominant reality. The dominant reality is if you record a hit, there’s tons of money generated. If you own the track, you’re doing exceptionally well. You’re going to receive in the neighborhood of 60-70% of income. If you’ve got a deal with a label…is it 50/50 or points or… The label is a business, it has to get paid, it recoups costs, don’t complain about a bad deal with a label, you made it. If you’re a streaming star, you can beat up the label, get a big advance, a huge percentage and maybe own your work to boot, at least after a period of time. If you don’t… It’s a game of leverage, and leverage is based on income/streams.

Labels want a percentage of touring. If you’re only touring, if your records make almost nothing, don’t make a deal where you’re sacrificing a percentage of your touring money with the hope/belief the label will make you a star. Unless you’re a hip-hop or pop act, the label cannot make you a star, and the hip-hop/pop acts don’t start on the road. If you’re a road act you’re in a different business, the long term fan business, hook the fan and then milk them for all they’ve got…and they’ll be glad to give it to you! Meet and greets, front row seats, merch, vinyl, they’ll buy it all. But don’t complain when your audience doesn’t grow. If it doesn’t, you’re probably not that good or your time has passed. Acts tend to be hot for a relatively brief period of time. Sure, there are exceptions, but there are exceptions to ALL rules.

PROMOTION

Nothing generates revenue like radio airplay. But radio airplay comes after streaming airplay. You’ve got to prove it’s a hit before radio will play it. So, if you’re banking on radio airplay and you don’t record a hit, good luck.

Yes, there are genres like Adult Alternative and Alternative that have charts, that can gain you some notice, but don’t expect to cross over to the big time, you’re fighting it out in the trenches. Do the Tiny Desk Concert, try, but don’t expect big rewards.

Don’t expect big rewards from any of the old school publicity methods. Late night TV appearances are almost meaningless, unless it’s SNL. Print? The only people who read it are old, so if you’re appealing to them…

It’s about social media.

And being able to reach your audience.

You want their e-mail addresses. I know, I know, that’s old school. Even better is their phone number, especially in an era where people no longer change them. You might change your physical address, but not your phone number! You want to be able to reach your fans, directly, to cut through the clutter and get right to them. You cannot do this without the foregoing information. This is what you want. It’s positively grass roots unless you’re the biggest of superstars, and those usually fade at some point too. You’re building your army and you want to know who the soldiers are. Your army will conquer landscape, will generate new fans better than anything.


PLAYLISTS

Overrated.

Most people listening to playlists are doing so passively. But if someone does save a track, if the streaming service does see a spike, they’ll graduate you, to more playlists. However, if you don’t, you’ll get dropped. Choose your opportunities, if you say everything is good when it is not, you’ll lose credibility.

The labels own the playlists. As in they have the relationships to work them. If the track doesn’t get a response, it will get dropped, but the label can get you on the playlist to begin with. But, the labels are only interested in what streams prodigiously, i.e. hip-hop and pop. So, if you don’t make this…

SOCIAL MEDIA

Choose your platform, be active. Right now it’s Instagram. It won’t always be Instagram, because social media platforms are fads. Kinda like TikTok. Never forget, TikTok is about the audience, not the musician. If TikTok embraces your track, great! But the paradigm is so burned, only the superstars like Drake can push a track down TikTok’s throat. The music business is always looking for the easy way, and then it burns it out.

As for other platforms…

Snapchat is for young.

Facebook is for old.


Twitter is for thinkers.

But most important is your content. It’s gotta be generated by you. It’s got to be personal and informative. Hype is ignored. And never forget, it’s hard to get someone to look, but it’s even harder to get them to come back after they’ve signed off.

TRUE ARTISTS

Pay attention to none of the above, they do what they want, they fly on inspiration. But there are very few of them around anymore. That innovation is in TV at best. Where Netflix gives you the money and stays out of the way, throws it up against the wall and sees if it sticks.

If you are a true artist, DO NOT COMPLAIN YOU’RE DOING POORLY ECONOMICALLY. If you want to do well economically, reach down deep and create excellence, maybe you’ll be recognized, but maybe not. But pure artists generate believers, i.e. a team that helps them. For every mercenary in the business there’s always someone motivated primarily by the music, they’ll work for free because they believe. Actually, the mercenaries far outnumber the believers, they do call it the music BUSINESS, but there are believers out there.

CONCERT PROMOTION

Everybody but Live Nation and AEG will go bankrupt.

Of course that’s an overstatement. But not by much. We live in a country where no one is saving for a rainy day, everyone is taking money out of the operation, and in live music the margins are thin anyway.

As for Live Nation…the investment by the Saudis has a bad look, but stunningly there hasn’t been a big backlash. Rapino is employing the BeeGees paradigm, he’s stayin’ alive. He’s walking a tightrope, but if anybody survives he and Live Nation will.

As for AEG, it’s a private company. Phil Anschutz has the money to survive, so the company will, it’s just that simple.

As for reopening…it’s all about LIABILITY!

Yup, attendees can say whatever they want, they can go to the show willy-nilly, but if they get sick there, god forbid they die, even if they get sick somewhere else and blame it on the concert promotion company…there’s gonna be a lawsuit and potentially a big payout. And there will be no affordable insurance for this, and it will get trumpeted in the press and will hurt the industry at large.

As for social distancing, the economics don’t work. You can’t go on the road selling one sixth of the tickets, not even one half! Just like on the internet, you can find acts to play, they just won’t draw any fans.

As for testing…

The dirty little secret is there is no definitive testing today, not testing you can trust over the long haul. The attendee might have been tested and cleared two weeks ago, but what happened since? As for temperature checks…you can be a carrier and be asymptomatic.

I doubt concerts will start up and people will get sick and some will die and the business will continue to ramp up. Actually, we’re getting a dry run in the public at large, with states opening up for business with an expectation of the doubling of deaths by June 1st, never mind the now stronger version of the virus and the fall flu season. We’ll have to figure out how to balance life and death in the public at large. But good luck suing the government if it opens the state for business too early, but you’ll have a lot of luck suing the concert promoter. As for long disclaimers agreed to by ticket buyers, saying they can’t sue, those are never a hundred percent effective. They have these in skiing, but skiers still sue. However, ski resorts are the beneficiaries of state legislation limiting their liability, but I would not expect concert promoters to get this, at least not in the near term, when they need it. Ski areas only got it after years of lawsuits, after staggering increases in insurance rates, after tons of lobbying.

TALENT AGENCIES

They stopped being in the business of representing talent. As soon as CAA took corporate money, it changed the business model. The talent agencies are trying to become the new movie studios, but even bigger. They’re focusing on being buyers, owning and staging events. The ten percent gotten from representing talent is de minimis, and it does not scale, at best you can get a bigger payday for the act, but then the act wants a lower commission. And if you’re making an overall deal with the concert promoter, do you really need the agent? This is the time for a new talent agency. Just like CAA started years ago. Renegades focusing just on representing talent, acts will flock to them. But, so many agents are staying with the big outfits for the fat salary and the payout. But most of them are older and the business is ultimately run by the younger. So now, agents are getting laid off and fired. But talent will work again. Who will represent musicians?

DATA

This is the new music business. You get it from streaming services like Spotify and elsewhere. It can be very helpful. If you’re not deep in the data, using it and understanding it, you’d better have someone on your team who does, or get out of the way, you’re history.

THE YOUNGER GENERATION

Doesn’t remember Napster. Did not grow up in an era of credibility. Did not discover acts solely by radio. Is familiar with the digital tools and has the time and the desire to utilize them.

And is willing to post the music for free, they’re not burdened by legacy perspectives.

Are interested in building multifaceted brands. Some just want to sell out to the highest bidder, some want to utilize their fame to build an empire of assets, digital and physical, they want to change the world.

Speaking of which, the young are focused on the climate crisis and giving back, at least the audience. You must have a charity component to your work, but don’t make it a percentage of proceeds, no one believes that anymore. You’ve got to ask for donations, better yet, donate your own money. Superior to all is to dedicate your TIME! That’s the most valuable commodity. If fans see you getting your hands dirty, they’ll be drawn to you.

And take a stand. The more edges you’ve got, the more people you’ll snag. Bland works for a while, but then it fades. The legends all have edges.

GOING FORWARD

It’s about the music. Now is the time to make and release it. Now it’s about recordings. Sure, do the livestream thingy, maybe even charge for shows, I think that’s a good idea, play every night from home and charge through the roof for a few people. It’s not the same, but it’s something.

Yes, live business is impacted by Covid-19, probably more than any other business in America. But never forget, the live business was burgeoning before the virus and will burgeon after it, because you can’t get that hit anywhere else, the music is the special sauce that creates joy and brings people together. We’re at peak festival, actually on the downward slope, but festivals are here to stay. As for virtual concerts… Travis Scott on Fortnite is about Travis Scott, not Fortnite, he just went where the audience is. The audience is in all kinds of new places, and yes, many of them are virtual. And sure, we’ll have virtual acts, but humanity drives the music business. All that hogwash about machines creating the music…there’ll be some of that, but a machine can’t sit on stage playing an acoustic song, and machines can only create based on what you give them. Music built its rep on pushing the envelope. The business still is, but not the music. Pushing the envelope is hard. The road less taken always is. But that’s where the rewards are. For both the act and the audience.

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