Michael DeGusta has posted a chart of music industry revenue in America illustrating how revenue really has been shrinking significantly over the past 10 years. His analysis indicates that the industry is down 64% since it’s peak in 1999. While I have little sympathy for an industry that has been extremely slow to react to the market, I do find it alarming that fewer people are buying music today than they have in the past. Perhaps the rising significance of the single will encourage songwriters to create more great songs, but I hope it doesn’t prevent artists from focusing on albums in the future. I still prefer to purchase and listen to albums; I feel like an album gives you a better chance of hearing a more fully realized piece of artwork from an artist. I don’t know what the future holds, but it’s an interesting time to be a musician and a music fan.
I think what we are witnessing is a shift of the music industry focus away from music publishers and producers and back to musicians. The Grateful Dead had the model correct – published recordings are a marketing tool to get people to come to live concerts…not the other way around.
For years we witnessed bands going on tour to promote their albums. They primarily got income from sales of recorded music. That worked because recording and distributing of music was tightly controlled mainly because of the expense of the process. It was capital intensive. You had to pay someone for studio time because they had all the good equipment. Only the biggest selling bands could afford to have their own studios. Distribution was also very expensive, from the creation of the master to the pressing, packaging and distribution of the product.
But good musicians have always made their money from live performances. Why else would someone like Celine Dion, who could rest easy from the sale of her recordings, go to Las Vegas to perform?
What we are witnessing is not so much a failure of the “music industry” to give the right product to the customer, as it is a shift back to what we had before recording technology made its debut. Because recording and distribution are nowadays very cheap, the days of making big money on record sales is gone. The good bands will actually have to work to make money!
But I think that is good for all of us, because they will be the ones that get the money, not the producers and distribution companies! And we fans will be able to benefit from the enjoyment of live music.
Thanks for your comments, Bill. I agree that we’re in the middle of a shift of some sort. I disagree a bit with your statement that “The good bands will actually have to work to make money.” I think there are many good musicians that either don’t want to or can’t tour behind an album, but are nevertheless great musicians or songwriters. My hope is that the low cost to produce music gives us more recorded music, not less.
I agree there will be more recorded music. MUCH more. It just won’t be through the recording companies and studios. It will be individual musicians doing recordings themselves and distributing through the internet. But it won’t make them much money. The money will be in live performance.
We are at the end of half a century where the recording and distribution of recorded music was expensive and only the bands that could command enough sales could afford it. Now it is cheap and anyone can do it with high quality limited only by skill and not cost. The supply is immense! That will drive prices way down.
My statement about bands having to work was only meant to highlight the fact that they can no longer rely on year after year receiving residuals on record sales. They will have to perform to get paid.
The point is that the music industry model is changing drastically but it is all GOOD because it means more money to the performers and less to those who controlled the recording and distribution end of things.
The music business has been in a state of flux for years.
I remember reading a comment from Rush drummer Neil Peart when he did an interview with Guitar Center with the following:
http://gc.guitarcenter.com/interview/neil-peart/
With over three decades of professional experience, Peart has seen the recording industry evolve from format to format. But what does he think about the changes in the music industry, particularly in the various modes of delivering music to the masses?
“I know that the mechanism that brought us up doesn’t exist anymore,” he says. “For instance, a perfect example of how reversed it is, in those days we made no money touring for a long time, even into the successful years. You counted on record sales and songwriting to make your living. And touring was a way to publicize that. Suddenly, in the last 10, 15 years all that turned around and our income is entirely from touring, and recording is an indulgence. In a band like Rush, no one’s going to pay us to make a record. It’s going to be an indulgence. Even ‘Snakes and Arrows’ (Rush album from 2007) basically paid for itself and that’s it, and if we want to make a living beyond that we have to go on the road and tour.”
As Gerry Rafferty would say in ‘Stuck In The Middle With You’:
‘Clowns to the left of me, jokers to the right
Here I am, stuck in the middle with you.’
Here is another related article on the topic from music industry veteran Wayne Rosso:
http://www.waynerosso.com/2009/06/30/emi-to-mom-pops-eat-cake/
Thanks for the links, Darren!
All in all I’m pretty positive about the evolution that has occurred over the last years where the musicians support themselves by touring.
However, there’s one aspect that I don’t like and that is the ever-growing prices of concert tickets. This makes going to a concert more and more a luxury that not everyone is able to afford.