Streaming Industry and Money

[toast88]

Where's the money

I've written this article to post on producer/engineer forums. I'm assuming
there are plenty of people like myself, independent musicians who produce their
own music and hope to make money doing so. The point of this is that there has
to be a change in the music industry, or we never will.

First I want to say that musicans aren't really in competition with one another
for listeners. Myself for instance, I'm a fan of and have bought music from
probably upper hundreds or more than a thousand musicians. I love Motorhead
and I love Fetty Wap, they're not mutually exclusive. So it's not other
musicians and producers who are a barrier to you making money, not at all.

Secondly the idea that a musician shouldn't be compensated for their work, is
wrong. Music is great. It's addictive, like a drug. It helps people
emotionally, which is invaluable. It's the freaking soundtrack of life, without
it, movies would be boring, dancing would be dumb, and the news wouldn't be as
terrifying. Just think about it.

Why is it so hard to sell music. It's not, in this day and age it is very easy
to make money from music. The problem is other people are using your music to
make money, you're not getting paid because you've basically paid them to take
it for free.

If you're a recording musician, not affiliated with a label, you have a few
options to sell music in the market or the internet, excluding traditional set
up shop and sell shit from a table. Those options are pay to distribute, like
cd baby, or tunecore etc. Those companies take your money to sell or give away
your music, on large platforms like spotify, itunes and a host of other sites.
The platforms, not only sell your music but also sell ads.

The reason that you can make money from your music online, is because your
music is considered "content", so is this forum. Let's take this forum as an
example, it's free to come here and write down whatever you're thinking, that
might be bullshit, but it might be extremely valuable information. If you
look to the right or left there are targeted ads, targeted to people like you
who make music. The company who sells whatever product is in this ad, pays
this site each time you click on the ad or view the page, depending. So each
time you do, the site makes 25 cents est. If you've ever started a thread in
a forum you've created a whole page of content, that in turn makes them money
24 hours a day. If you're thinking you should make a website and create
content in order to place ads and make money, you will have gone the way of
many other musicians, good luck.

Music is even better content. So imagine you've created music, you've mastered
your instruments, you've read all the manuals and bought thousands of dollars
worth of equipment and learned to use it and now you're album is done and
you're going to try to sell it. You need exposure. If you can't tour for some
reason, like you have a job, and need to eat or some lousy excuse like that
(just kidding), your avenue for exposure and profit is the internet. The
problem with music is that the music is the ad for the music. So you have to
let people listen to it in order for them to decide if they want to buy it. So
if it were just that simple it would be great and this is why touring is so
effective if you want to do that.

So exposure services like spotify and pandora, in one sense are great because
musicians and listeners are united in a blissful uncomplicated relationship.
On the other hand, those companies eliminate any reason to buy music, ever.
So right now I'm looking at spotify, and it is wonderful. I never need to go
anywhere else to listen to music, ever. If someone's not on spotify I will never know,
because I am so entertained by this.

If I listen to the artist Travi$ Scott for instance on Spotify, and I love him
so much I listen to him 10 times a day, he earns .022 cents a day. If I'd
listened to him on pandora or iheart radio accidentally at that same rate he'd
make .017 cents. This is because on sites that allow you to choose which songs
you listened to the company has to pay .0022 cents per listen, and for sites
that play like the radio they pay .0017 cents per listen. The copyright royalty
board or CPB sets royalty rates, these are the minimum rates for webcasting
music, and this is stuck for the next four years.

So for every dollar that's made by an artist on Pandora, iHeart radio, Jango,
or Slacker their song has been played by me 588.23 times, if the song was three
minutes. For Spotify, a dollar is made by getting played 454.54 times. Some of
these rates are different I know, for musicians who have the clout I guess to
get paid more, or a lawyer.

There are sites that sell songs, and those sites pay pretty reasonably,
sometimes, I think itunes sells at .67 cents a song or that's what you get
after the distributor takes their cut. That's pretty reasonable, because you're
selling to one person who will listen as many times as they want and that's
great. But why would I ever buy music at all if my radio is my computer and my
cell phone is my portable and car radio, and it's all free? I won't.
After Taylor Swift's exit from Spotify their listenership increased by 2.5
million people.

Let's look at from the other side. Advertisers are thrilled with pandora and
Spotify because they provide rich engaging content at an affordable price. And
new streaming services are arising, Amazon etc. Pandora typically shows seven
display ads per listener hour and runs 2.5 audio ads (of 15- or 30 seconds) per
hour. Users might also see a video ad. Visual ads, on a CPM (cost per thousand
impressions)basis, sell for $5-$7; audio ads, $8-$12; and video ads, $15-$25.
Spotify I couldn't find the exact math, they charge about 10-30 dollars per
thousand impressions and take in about 150,000 dollars an hour in ad revenue
total.

So to be fair, let's look at a typical hour on pandora as $.08 per listener,
pretty generous. (Thats a median amount for each ad area divided by a thousand
(CPM) added together) That means that for every dollar you make as a musician
Pandora makes 47.05 dollars.

What is Pandora really? Its a website, that took a lot of work by programmers
and marketers, it's a rainbow really, that occupies 5 floors of a skyscraper.
A beautiful idea, about liberating music and a free wonderful listening
experience for consumers combined with low cost advertising. I mean it does not
get any better than that. And Spotify, those Sweeds are fing geniuses, they're
even ripping off the advertisers, but that's for another article.

The fact is the product that they are selling to consumers is your music. Your
music makes up the backbone of an entire multibillion dollar streaming industry
that you humbly pay someone to allow you to be part of.

What I'm getting at here is that musicians have a low self valuation. Much
lower than they should. Not that we should become dicks and make popular music
any meaner than it already is, I'm not advocating that. But the idea that some
of these services are offering us a handout, or 'giving' musicians something is
not true. What's actually happening is that musicians are giving them
something, and they, are selling it again for billions of dollars.

The only way to capture the attention of the services outside of yelling about
it is if their catalog was diminished significantly enough and people just
began to go elsewhere, because they would. If enough musicians pulled their
catalog's spotify and pandora wouldn't have anything to sell, and they would
have to consider their payment practices or their services would go away. On
top of that pirating is actually getting harder and harder because the internet
is getting more and more regulated, so if the industry reverted to the sale of
mp3s or wavs, this time that might work, not that it should revert, I don't
know.

Anyways, that's all I have to say about that, best of luck

 

[MaseedProd]

Great read, summed up very well. The act of "selling music" in and of itself is not hard, wrapping your head around the concept and reality of the fact that your music sells is in direct proportion with how much exposure you give it is an entirely different concept.

Let's pretend that money was no object and you could pay for as much advertising as you wanted. No matter whether your music was good or not, eventually it will start selling. In fact, chances are if the music is really not good but still manages to sell, sell will actually increase because people will view it as a "trend" aka "gimmick" and support it just so they can be in the cool crowd like everybody else. That initial investment will begin to not only recoup itself but the artist will eventually cut a profit. With unlimited or a high amount of exposure, your music will sell on accident, meaning people who weren't even looking for it, will stumble upon it and because it's so highly exposed and everyone else is buying it, they will feel inclined to do the same.

The reality is for most of us, money is an object and in very limited supply. Those of us who actually take our music serious enough to invest in advertising can only afford very limited run, targeted ads and with as much music being put in the faces of consumers these days, that simply isn't enough to justify quitting your day job. Sure you could luck up and know the right people who could "put you on" but if you really think about it, all that is really doing is employing what I talked about earlier, (unlimited or high amount of exposure) because they have the money to invest in you. Point is, whether you invest in yourself or someone invests in you, it's simple math and the equation doesn't change. Music sells = exposure - advertising budget.

I make sells just about every month, the income is small but guess what? The only budget I allocate for my company is the costs for running the website and MFS player. I get sells by using platforms that let me advertise for free so imagine if I advertised regularly with a sizable advertising budget how much my sells would increase simply due to brand awareness alone? It's that initial sizable investment, that lack of taking your music seriously enough to invest money in it, the idea that at first you won't make any money that stumps most artists. Stop me when I'm lying.

 

[Hadoq]

Great read
right now, I'm both an entrepreneur and a musician. And through my journey as an entrepreneur, I realized one thing: if your focus is on money, you'll be chasing your tail. Money is a result, not a goal. You don't set money as a goal, an end all be all. You set your goals in other to get the results (which may or may not include "money") you want.

What I can observe, and it's ok, really, is that many musicians have too much of their focus on money, and very few have their focus on what truly matters: the music they make.
WIth the online selling beat trend, people are not trying to express themselves in their own unique way (which, if done properly could grant success), rather, they try to make music that sounds like someone else expressing himself ("X" type beats etc...). Which, addmittedly requires talent (I can't do it) and hard work, and in many ways, can pay off.

But to me, it's like many passionate photographers, most of which are doing wedding photography because it's an "easy" and fast way to get a "professional" status. In that your *job* is in photography.
now I'm sure, almost none of them is a wedding photography enthusiast, many would love to have their work recognized as artists, and many of them are good photographers.
But they focus on the "money" and the "professional" aspect of things.
If that's what you want, then fine by me.

But if you want *your* music to be recognized, if you want "to become popular" and achieve great amounts of money, there's no way around it, you have to take the longer road and develop *your* music, your own.

The greatest artists didn't become great by trying to copy other popular artists. And most artists will be "workers" at best.

Making money with music is not that hard, if you're talking "salary-like" (anywhere from $1k/month to $5k/month sometimes more), and make music your daily job, if you "produce" and put out products, it is possible and fairly rewarding too.

Some don't do it for a salary, I sure don't do it for a salary. I want people to listen to my music because it's unique, not because it's "like drake", or "like jay-z" or whoever else.

I believe if I'm unique enough, and efficient enough in putting my music out there (and I'm not, as of right now), I may get there.
And selling beats or down-valuing my music is not the way to get there.

As said by the OP, musicians under-value themselves, and I'd tend to agree, I did it also, and in many ways, I'm still doing it now.

The need for validation is why I post in the showcase, but I know in my bones that my music is good. in fact, I believe it's much better than many of the popular stuff out there, because of how much soul I put into it, how much hard work, decades of life experience.

The only reason it's not out there, is because I de-valuate it, deep inside my mind. But not to the point of selling it for a discount price so I can call myself a "pro", and I don't have to get a job.

People are how they are, and some find happiness and fulfillment in ways I couldn't so I don't want to judge. But I know what I want, regarding to my music, I want to express who I are in ways that language can't. it has nothing to do with money, and if I had to put a price on it, it certainly wouldn't be $50 a pop. So for now, I prefer to share it for free, see if it resonnates with other artists who may be inspired by it, so we could take it to the next level.

I just trust in the universe's plan
for now, running a business is a much better way to make money so I can eat and live, buy more gear and find ways to make even better music without the pressure of "having to produce" something that somebody else has already done, so I can pay my bills.

they always say, never mix business and personal stuff, my music is personal

 

[MaseedProd]

Bro, make music for what ever reason you want to. If you love it, then do it because you love it...not knocking you for that.

 

[Hadoq]

Bro, make music for what ever reason you want to. If you love it, then do it because you love it...not knocking you for that.

it's fine, I didn't feel "knocked", I appreciate arguments, points of view, of other people. Especially if they're not the same as mine. a new perspective is a way to see things much clearer in life.

 

[toast88]

You could be right, fuck it.