Tech

Published on August 28th, 2012 | by William Barns-Graham

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$0.04 per album listen on Spotify. How can a modern musician pay the bills?

The music industry has sought to counteract illegal downloading for the last decade, but has generally been clueless and heavy-handed in its ideas and approach. Rob Dickens, former chief at Warner Music, argues that the price of a new album should be only £1 so as to give consumers a realistic alternative to illegal downloads. So in a modern age in which a band may only get £1 per album sale, how else can they earn themselves a viable income for living and for funding future production and gigging?

UK band Uniform Motion gave details of their income generation recently. From any CD purchase they’ll only get $5.99 profit from the $14 price, such is the percentage gained by PayPal and Bandcamp, as well as the cost in making the CD which includes packaging and the cost of the CD itself. On iTunes there is a 70-30 split with Apple from the $8.66 price, but with it costing them $42.28 to keep the album on iTunes, Spotify and Amazon every year, it requires at least 24 people to buy digital copies of the album, 150 single songs, or tens of thousands of listens on Spotify before they make any money. On Spotify they get $0.0041 per play and $0.04 per album listen. A significant proportion of income comes from streaming now, since the Digital Performance Rights in Sound Recordings Act of 1995, which meant performers and sound recording copyright owners receive a digital performance royalty when songs are played on webcast stations or satellite radio. So it seems that income generation in music has certainly moved with the times to some extent, but the consequence of this is that people can listen to a band’s music without the band getting much in return.

So what alternative methods are bands using to maximize income in the face of the difficulty of getting much money from actual recordings? Of course live performance has always been pretty fundamental to any band’s success, but with venue hire a cost in itself, and with many upcoming bands not able to garner profitable attendances at first, gigging is often not sufficient as a sole income generator. One of the traditional ways by which musicians have gained money is busking. The money gained through busking can of course be limited. If you earn £1 per day from busking (many city councils will only allow you to play for just an hour and will require you to get a busking permit) then that’s hardly going to provide much in terms of salary.

Perhaps rather than let the chaos of the internet deprive bands of all their previous sources of income, bands should embrace the rise of social media instead. If you’ve been on Facebook (not sure if there’s a need for the ‘if’ there) and if you’ve liked some bands on it, then you will almost certainly have seen countless adverts saying things like ‘If you like The Cure, then you’ll definitely like this post-punk band from Earlsfield’ or something like that. With Facebook pages allowing instant access to gig listings and music from various blossoming bands, Facebook’s utility is not just limited to advertising. What about immediate income from social media? It’s certainly possible as Amanda expletive Palmer, formerly of Dresden Dolls, has shown. Using Twitter she has been able to gather crowds of up to 200 fans in public spaces at a day’s notice, thus creating what can either be described as a gig without venue hire or busking with guaranteed public interest. She’s also done online gigs, attended by virtual crowds garnered by her tweeting.

But Palmer’s greatest tweeting success came when on a random quiet Friday night she tweeted “i hereby call THE LOSERS OF FRIDAY NIGHT ON THEIR COMPUTERS to ORDER.” Such is the vagaries of the internet, this Friday night beckoning became the number one trending topic on twitter. Using these swathes of trendy Friday night ‘losers’, she had a sudden market interest. And then the other great source of music income – merchandise. Creating a rushed website with the slogan that someone from this particular twitter storm suggested – “DON’T STAND UP FOR WHAT’S RIGHT, STAY IN FOR WHAT’S WRONG” – she sold 200 t-shirts. After blogging the story over the next few days, and further publicity, she ended up earning $11,000 for the t-shirts. A few days later she sold weird goods she owned on a webcast auction on twitter, while performing a concert online, earning herself another $6,000, with about 2,000 people watching. She later arranged a spontaneous first come, first served, gig on twitter, with around 200 people attending, though she did give some of the money just earned from twitter to the studio she played at. Despite this, from the gig she made another $2,000. All in all, that’s £19,000 from twitter self-marketing. Compare this to the money earned from streaming or iTunes and that’s some considerable business.

Social media is set to grow in this regard. Take ‘yy’ (http://www.yy.com/), a social media site in China. On yy you can create an artist account, put up some songs and hopefully develop a fanbase – no different to Facebook or twitter. But, once you’ve developed a fan base you can schedule a live concert on the site which can be attended for the price of one “virtual rose”. After the concert you can exchange your virtual roses for real money. While Western companies have been using virtual currency systems for years in virtual games, they have yet to be used for actual real world applications such as music concerts. The yy model could revolutionize the way that Western musicians and many other sectors distribute their content online.

Then there’s Kickstarter – which Amanda Palmer has again been using for her latest album Theatre Is Evil. On Kickstarter (http://www.kickstarter.com/) , artists create their ‘project pages’, shooting videos and brainstorming what to offer as rewards for people’s pledges towards funding their projects. Once people have pledged enough for the project to be funded, all backers’ credit cards are charged; if the project falls short, no one is charged. Since launching in 2009, $335 million has been pledged to projects, with 2.6 million people backing a project and 28,000 projects successfully funded.

The potential for funds raised by fan pledges is something that is being utilized by musicians. Emmy The Great’s follow-up album to 2009 debut First Love is being funded by her fans for as many as 40 rewards such as a download of the finished album (£8), to backstage gig passes (£50), a cameo role in Emmy’s next video (£150) and a gig in your front room (£500). Private gigs are also being used by English duo The Indelicates who will play the album live, record it and then sign a legal document transferring rights of the recording to the buying fan of the ‘Super Special Edition’ of their second album Songs For Swinging Lovers.

One final way of generating income to consider is the ‘pay what you want’ model made famous by Radiohead when they released In Rainbows for no set price. Although this model would seem to be more easily applied by bands such as Radiohead, who already had a lucrative portfolio of previous releases, Donald Macdonald, a little less known artist than the world-famous Oxford band, is playing a free gig at Glasgow’s Liquid Shop on November 8, encouraging the audience to pay how much or little as they like, depending on their enjoyment of the gig. It may work – the model for In Rainbows supposedly earned Yorke, Greenwoods and co more than what they anticipated earning via the conventional model of releasing at a set price through your record label – but it is perhaps risky. Such is the life of the modern musician, to earn money from music you have to be prepared to take more risks then ever.

Main picture: Amanda Palmer uses her Kickstarter video to raise $250k

Other picture: Lisa Norwood

Tags: amanda palmer, in rainbows, Kickstarter, music business, Social media, Twitter

About the Author

William Barns-Graham Will has been obsessed with music since he picked up his first guitar as a child and has since spent most of his life listening and playing. Will’s favourite band has always been Radiohead but his taste has spanned pretty much all genres. His favourite era is probably the rise of indie/alternative bands pre-Britpop like The Smiths, My Bloody Valentine and the Pixies in the 80s and 90s and at the moment he enjoys contemporary acts ranging from Four Tet and Burial to Deerhunter and Grizzly Bear . Will has also performed on the guitar with various bands and as a busker in both Bolivia and Oxford where he went to university. Will has already written for a wide range of magazines and websites since gaining a BA in Philosophy and Theology in 2012. He is also passionate about uncovering new upcoming bands.

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