Not long after pop music’s transition from physical recordings to downloads, the latter are giving way to streaming services such as Pandora and Spotify. Consumers love the low monthly fee of $10 or less, but artists only receive about half a cent per play. By comparison, the 7-10 cents they got on a $0.99 iTunes download were downright luxurious! Theoretically, royalties from repeat plays should eventually make up the difference but so far this isn’t happening. In early 2012, Damon Krukowski’s bands saw such ridiculously low revenue from streaming services that they decided to stream their music for free over Bandcamp – it’s not like $1 a quarter made any difference to their livelihoods.
To put this into perspective: Since we own our own recordings, by my calculation it would take songwriting royalties for roughly 312,000 plays on Pandora to earn us the profit of one — one — LP sale. (On Spotify, one LP is equivalent to 47,680 plays.) […] Here’s yet another way to look at it: Pressing 1,000 singles in 1988 gave us the earning potential of more than 13 million streams in 2012. (And people say the internet is a bonanza for young bands…)
Merely selling recordings is no longer sustainable, but viable alternatives exist for artists with an established audience. Rolling Stone’s Nine Ways Musicians Actually Make Money Today lists merchandise, advertising, various forms of licensing, and of course live performances. Amanda Palmer’s successful Kickstarter financed a new music album and tour, but offered art books and even portrait painting as rewards. David Browne breaks down the $1 million revenue:
The biggest number of contributors, 7,000, paid $25 for a special-packaging edition of the album. Thirty-five backers paid $5,000 each for Palmer to perform in their homes; one paid $10,000 for Palmer to visit and paint his portrait. Palmer says $250,000 of what she raised will go toward recording and production costs, along with $105,000 for producing a coffee-table CD and art book; after multiple other expenses, she’ll be left with less than $100,000. “People say, ‘Don’t you feel awful begging your fans for money?'” Palmer says. “And I say, ‘You don’t get it – I’m doing my job.’ Musicians used to think that if they worked hard, they’d be a star like Madonna. Hopefully we’re seeing a new understanding of what it means to be a working-class musician. It’s a job.”
Creating the actual music is but one part of Palmer’s “job” as a self-publishing artist, which also includes organizing concerts, designing and producing merchandise, and cultivating her devoted fan community. Not everyone wants to do all this, for example writer John Scalzi. His recent science-fiction novel Redshirts is once again published through Macmillan’s Tor, not least so that Scalzi wouldn’t have to do “all the work aside from writing.”
There are good financial reasons, too. Scalzi’s breakdown of sales prior to the paperback edition shows a big chunk of hardcover sales – difficult to achieve without the assistance of an established publisher. Those hardcover sales are also likely responsible for part of the electronic sales, as brick & mortar stores continue to be an important avenue for discovering new reading material. In his hypothetical analysis of self-publishing e-books through Amazon, Scalzi notes that Amazon is not quite as benevolent as one might hope, and emphasizes the overall importance of Macmillan’s involvement:
Hitting the New York Times hardcover bestseller list (which happened without the eBook sales at all, by definition) led to profiles and interviews with the Times and NPR and other mainstream outlets. Those wouldn’t have happened with eBook only. I had Redshirts advertised everywhere from Locus to The New Yorker — again, not something I could have accomplished on my own.
That worked out well for Scalzi, but unknown writers would find it difficult to get such great support from a big publisher. Then again, few singers who aren’t Amanda Palmer would get $5,000 for a backyard party. As for pure digital sales, Damon Krukowski would need millions rather than thousands of streams if he wanted them to pay his rent.
The great liberation of zero-cost digital distribution also brought about an overabundance of free and cheap works – classic and modern, amateur and professional, legal and pirated. That fierce global competition virtually requires being famous before you can start making money. Expect to put in a lot of unpaid work to stand out from the crowd.
2013-04-01: Another established novelist, Charles Stross, weighs in on the same side of the self-publishing argument as John Scalzi.
Yes, I could do it [self-publish]. But it’d suck up a huge amount of time I would prefer to spend doing what I enjoy (writing) and force me to do stuff I do not enjoy (reading contracts, accounting, managing other people). The only sane way to do it would be to hire someone else to do all the boring crap on my behalf. And do you know what we call people who do that? We call them publishers.
2014-05-11: Grammy-nominated musician Armen Chakmakian reveals his royalty statements. They show that nothing has changed during the last year – at least not for the better. 14,227 Internet playbacks of his music generated only $4.20. Unless you’re already famous, services like Spotify offer little more than free cloud storage for essentially unpaid straming to your fans.