A recent series of blog posts about musicians, music, and income have found various writers claiming – each with a level of certainty – that musicians are making more money/less money today than in years past. These posts prompted us to write about the challenges in making assertions about changes in musicians’ income, based on what we’ve learned through the Artist Revenue Streams project.
Read a longer blog post here, or the excerpt below.
Writers who claim that “musicians are making less money” tend to focus on the disruptions in the sound recordings sales market. They not only point to the problems with piracy, but also the shift away from album sales to singles sales, both of which have diverted consumer dollars away from physical CD sales. Simple math suggests that musicians are making less on recorded music sales because an increasing amount of royalty payments are based on sales of 99 cent singles, not $15 albums. Or, even worse, consumers aren’t paying anything at all.
“Hang on,” say the bloggers who think musicians are making more money. “Look at the explosion of income from digital sources,” they say. “Look at the increasing number of artists on tour, the rising number of concerts per year, and successful Kickstarter campaigns.” These are impressive achievements, and signals that many of the structures and services that have developed have allowed more and more musicians to participate in the digital marketplace, and that money is flowing through the system.
But none of these measures can tell us whether musicians are making more or less money today than in years past. Why? Two core reasons:
1. Musicians’ income can’t be described by referencing isolated income streams.
Recent pronouncements about musicians’ earning capacity tend to point to data that supports their specific point of view, whether it’s retail sales, digital sales, digital performance royalties or live shows receipts. These singular income streams are then used as a proxy to talk about the joys or woes of the entire musician population.
But each of these measures is insufficient on their own. There are over two dozen revenue streams available to US-based musicians based on the contours of copyright law and business practice, and the vast majority of artists rely on an ever-shifting composite of income sources based on their compositions, sound recordings, performances, brand, and their knowledge of their craft. It is insufficient to look at just one revenue stream – whether it’s digital sales, box office totals or retail sales — and declare that this is the state of musicians’ income.
2. It’s difficult to measure the costs of doing business.
Conversations about musicians’ income almost never distinguish between “gross” income and “net” income. And there’s a good reason why — it’s really hard to calculate musicians’ net income because of the huge variation in the level of financial responsibility any given artist might have over the costs of doing business. Think about this example:
A rock band is signed to a mid-size indie label. The band pays for the studio time to record their album, but the indie label pays for manufacturing, promotion and distribution. The band goes on tour (without tour support from their label), pockets all of the cash from the shows, but is also responsible for paying for gas, travel, lodging, and any crew salaries. And their booking agent gets a percentage. The band just breaks even on tour costs, and each band member splits the net profits on the merchandise sales (which the band paid for themselves). Six months later, they get a royalty check from their label for digital sales/streams of their albums, and the songwriters get a check from their PRO for some performances.
In this one hypothetical situation above, there is a jumble of gross and net income. Sometimes the band is the recipient of money after expenses have been taken out by another party (royalties from their label, or from their PRO). Other times they receive a gross sum, and they are responsible for paying for associated expenses (tour or merchandise money, at least in this hypothetical case). Each artist’s situation will be slightly different, and will likely change over time.
How to measure income? Ask musicians
If we truly want to measure musicians’ earning capacity, the only way to do it is to ask them. Directly. And not just about their Spotify payments or their iTunes sales, but about all of their music-related income, from the well-documented (retail sales, digital sales, on-demand streams), to the obscure, to the personally-negotiated (grants, commissions, how much they made doing session work, merchandise sales…the list goes on). Because only they know about the mix of income sources on which they rely.
And, if we really want to know whether musicians are making more or less money, we also need to examine costs. Understanding the relationship between income and expenses and calculating a net income over time is really difficult, unless you have access to the complete financial picture from musicians themselves.
Measuring change over time: benchmarking and replication
So, how do we measure whether musicians are making more or less money now than in the past? We can’t look back, because we have no benchmarking numbers to reference (except in the case of jazz players, where we were able to compare our survey data against the 2003 NCAC report “Changing the Beat”. See report here.) If we want a broad and accurate measure of musicians’ income over time, we have to start the benchmarking process now, and then replicate the work in a few years.
The Artist Revenue Streams project was designed to do that. Using three methods simultaneously — in-person interviews, financial case studies, and a widely-distributed online survey — we were able to gather specific income-related data from over 5,300 US-based musicians, composers and performers. We were also able to gather years of expense data through the financial audit process, and calculate net income numbers for our five case studies. Though this is just a snapshot of five individual artists, they each provide a rare glimpse into the relationship between income and expenses, and changes over time.
We see this as a vital benchmarking effort. The data collected and published to date gives musicians, the media and the music community a comprehensive analysis of how musicians from many different genres are being compensated now. But the real power is in replication. We hope to repeat this research project in two to five years, asking the same questions of the same broad US musician and composer community. It is only through replication, and asking the same detailed questions about income and expenses, that we will truly be able to measure whether musicians are earning more or less over time.