The State of the music industry [OATMEAL]

[DamianJ]

http://theoatmeal.com/comics/music_industry

[cthulhu_waves]

Yup, that's pretty much it.

[Rochard]

Seems about right.

[tony286]

It leaves out, who pays for marketing, videos,producing the music. That just doesnt fall from the stars. How many times do they put up the money and it goes nowhere.

[WebCashMaker]

$175 for a concert ticket is right.









Mathieu

[DamianJ]

Originally Posted by tony286

It leaves out, who pays for marketing, videos,producing the music. That just doesnt fall from the stars. How many times do they put up the money and it goes nowhere.

AFAIK the artists pay for all that.

[tony286]

Originally Posted by DamianJ

AFAIK the artists pay for all that.

but who puts the money up? and if its not made back its written off the artist isnt in millions of dollars of debt for a failed record or if they get dropped. Im not a big record company supporter but its not black and white.

[2MuchMark]

Whoever drew this is clueless. Record companies help musicians by promoting them, paying for studio time, music videos, licensing their music and getting out to the masses.

Sure acts could do this themselves but it is expensive and they usually don't have the big bucks to compete. Record companies invest (or 'bet") on a band hoping for big payoffs later on.

The "music should be free" people just don't understand the music business or business in general. Everything costs money.

The past 10 years saw huge amounts of piracy and a major market shift. APPLE for example, saw that people were no longer interested in whole albums, but in individual songs. iTunes made it easy for people to get individual songs, cheap enough to put a small dent in piracy, while still putting money in artists pockets.

As for $175 for a concert ticket, people should not complain. This compensates the band for losses due to piracy, and affords bigger shows with better and better production values. Of course it is unaffordable for alot of people, but since others are more than happy to pay this price to see their band, and since forums and stadiums even sell out at these prices, it is unlikely that prices will ever come down. It's not greed, it's the reality of the market.

[ottopottomouse]

Originally Posted by tony286

It leaves out, who pays for marketing, videos,producing the music. That just doesnt fall from the stars. How many times do they put up the money and it goes nowhere.

Works exactly the same way as pharmaceuticals. One success pays for a huge amount of failures.

[Young]

Originally Posted by **********

Whoever drew this is clueless. Record companies help musicians by promoting them, paying for studio time, music videos, licensing their music and getting out to the masses.

Sure acts could do this themselves but it is expensive and they usually don't have the big bucks to compete. Record companies invest (or 'bet") on a band hoping for big payoffs later on.

The "music should be free" people just don't understand the music business or business in general. Everything costs money.

The past 10 years saw huge amounts of piracy and a major market shift. APPLE for example, saw that people were no longer interested in whole albums, but in individual songs. iTunes made it easy for people to get individual songs, cheap enough to put a small dent in piracy, while still putting money in artists pockets.

As for $175 for a concert ticket, people should not complain. This compensates the band for losses due to piracy, and affords bigger shows with better and better production values. Of course it is unaffordable for alot of people, but since others are more than happy to pay this price to see their band, and since forums and stadiums even sell out at these prices, it is unlikely that prices will ever come down. It's not greed, it's the reality of the market.

I think you're the one who has no clue what you're talking about. The ARTISTS COVER ALL OF THOSE CHARGES. NOT THE RECORD COMPANIES. They just front the money.

Now back to the topic at hand.

The model needs to change. The model WILL change.

20 years ago artists had no other means to distribute their music. So record companies would take chances and put money into distribution and promotion (concerts, videos, etc). IN THE END THE ARTISTS ALWAYS END UP COVERING THOSE CHARGES and usually lose. It's very rare that someone becomes a millionaire off of music. Just take a look at the amount of music that is out there and now create a list of the 100 or so millionaire popstars in the last 10-20 years. VH1's Where Are They Now was a depressing fucking show. As soon as the labels stopped believing in your money making ability you were no longer allowed to make a living off of music. They cut off your distribution.

Today. Artists can distribute music themselves. Making a living off of music (not necessarily a millionaire) can now become a reality. Becoming a millionaire is of course less likely this way. But earning a living off of music is possible.

All it's going to take is the right music discovery platform/service/application/model. There's millions of dollars being poured into this right now for good reason.

[kane]

Originally Posted by Young

I think you're the one who has no clue what you're talking about. The ARTISTS COVER ALL OF THOSE CHARGES. NOT THE RECORD COMPANIES. They just front the money.

Now back to the topic at hand.

The model needs to change. The model WILL change.

20 years ago artists had no other means to distribute their music. So record companies would take chances and put money into distribution and promotion (concerts, videos, etc). IN THE END THE ARTISTS ALWAYS END UP COVERING THOSE CHARGES and usually lose. It's very rare that someone becomes a millionaire off of music. Just take a look at the amount of music that is out there and now create a list of the 100 or so millionaire popstars in the last 10-20 years. VH1's Where Are They Now was a depressing fucking show. As soon as the labels stopped believing in your money making ability you were no longer allowed to make a living off of music. They cut off your distribution.

Today. Artists can distribute music themselves. Making a living off of music (not necessarily a millionaire) can now become a reality. Becoming a millionaire is of course less likely this way. But earning a living off of music is possible.

All it's going to take is the right music discovery platform/service/application/model. There's millions of dollars being poured into this right now for good reason.

I worked for a record label for about 3 years. Yes, the artists do end up paying the record label back for all the costs of making and promoting the album. The paybacks come from record royalties and most artists never sell enough albums to pay the label back. This is why big name artists demand large advances. They know that once they spend a ton recording the album and then making videos, promoting it, buying ad space, getting it on the radio etc they are going to have to sell millions of copies before they ever pay that back and they likely won't. This way they get the big advance and then they cash in when they go on the road and play concerts and sell merchandise. If they write their own songs they can also earn money from royalties and licensing. It is possible, and often likely, for a big, well-known band to put out an album, hit the road and play to sold out arenas all over the world. They could bring in $50 million dollars from the tour, have a double platinum record with a few huge hits and still be in debt to the record label. However, the publicity that the label was able to generate for them allowed them to make all that money touring and selling merchandise and so on. That is why bands still work with major labels. It is still impossible these days to become a huge star without them.

The internet is leveling the playing field, but there is a problem with it. The reason it doesn't work for most bands/artists is because they are just that - artists. Artists aren't marketers. Most bands have trouble getting dressed in the morning and feeding themselves much less coming up with a marketing plan and putting in the work to carry it out so they don't succeed on their own. There are some that can and do and since you get a bigger slice of the pie you can sell fewer albums and still make some money, but I think what the future holds is something akin to a crowd-sourcing for the music business. If you are in a band you end up recording the album yourself and maybe even hiring a producer. You then end up hiring people who help you establish an online presence and maybe still other people who help promote you. The benefit will be that these will likely be individuals or small firms without a ton of overhead so you can keep costs down instead of having to cover the cost of a huge marketing department from a major corporation. Of course the artists will either need to come up with this money out of pocket or get investors and they will be more likely to do things on the cheap. That could hurt the overall quality of the music they produce. I have always said that the reason you never hear about most bands is because most bands suck. The good bands are going to have to find a way to make themselves stand out and that won't be easy.

All that said, the level of success of internet artists will be capped until they figure out a way to break into mainstream radio or radio finally fades away and is replaced by something else.

[DamianJ]

Originally Posted by **********

Whoever drew this is clueless. Record companies help musicians by promoting them, paying for studio time, music videos, licensing their music and getting out to the masses.

No. They lend the artist the only to do this. Is not a fucking gift.

Originally Posted by **********

Record companies invest (or 'bet") on a band hoping for big payoffs later on.

No, they lend them the money. It's not altruism.

Originally Posted by **********

The "music should be free" people just don't understand the music business or business in general. Everything costs money.

As the cartoon states, that period of music stopped.

Originally Posted by **********

The past 10 years saw huge amounts of piracy and a major market shift. APPLE for example, saw that people were no longer interested in whole albums, but in individual songs. iTunes made it easy for people to get individual songs, cheap enough to put a small dent in piracy, while still putting money in artists pockets.

Yes. That is what the cartoon says

Originally Posted by **********

As for $175 for a concert ticket, people should not complain. This compensates the band for losses due to piracy,

Really? Do you know how much of the money the riaa raised goes to the artists? None. Not a penny. What stats do you base this laughable idea that labels charge high prices for gigs to make up for piracy losses? You wouldn't just be talking out of your arse would you?

[kane]

Originally Posted by DamianJ

Really? Do you know how much of the money the riaa raised goes to the artists? None. Not a penny. What stats do you base this laughable idea that labels charge high prices for gigs to make up for piracy losses? You wouldn't just be talking out of your arse would you?

In most cases the record labels don't have any say over the price of concert tickets. These days there are more and more artists who do give up some of of their concert revenue to the labels, but in most cases the price is set by the artist and promoter. Obviously if it is a big show with a huge stage, tons of lighting and effect etc it costs more to put that show on so the tickets are going to cost more, but when Neil Young comes to my local 1000 seat theater and charges $250 a seat it is because he wants to charge $250 a seat not because his record label is setting the prices.

[DamianJ]

Originally Posted by kane

In most cases the record labels don't have any say over the price of concert tickets. These days there are more and more artists who do give up some of of their concert revenue to the labels, but in most cases the price is set by the artist and promoter. Obviously if it is a big show with a huge stage, tons of lighting and effect etc it costs more to put that show on so the tickets are going to cost more, but when Neil Young comes to my local 1000 seat theater and charges $250 a seat it is because he wants to charge $250 a seat not because his record label is setting the prices.

Citation needed

[kane]

Originally Posted by DamianJ

Citation needed

Here is one that talks about how some artists go the route of signing with a large promoter like Live Nation who pays them a set fee and the artist is guaranteed that money no matter how many tickets get sold. In these cases it is mostly the promoters that set the prices, but there are several things that influence that price.

Here is an article that shows how the price of a concert ticket is broken down and who makes what from the sale. The artists, according to this story, pocket 74% of the face value of a ticket. When you control that amount of the earnings it is logical to assume you have a big say in the price of the ticket.

Here is one more that talks about ticket pricing overall. It basically says that the artists give the promoter a dollar amount they want to earn per show and the promoters then set out to determine a good ticket price that will make sure they bring in enough revenue to pay the artist, cover the costs and still make money.

[tony286]

Originally Posted by kane

Here is one that talks about how some artists go the route of signing with a large promoter like Live Nation who pays them a set fee and the artist is guaranteed that money no matter how many tickets get sold. In these cases it is mostly the promoters that set the prices, but there are several things that influence that price.

Here is an article that shows how the price of a concert ticket is broken down and who makes what from the sale. The artists, according to this story, pocket 74% of the face value of a ticket. When you control that amount of the earnings it is logical to assume you have a big say in the price of the ticket.

Here is one more that talks about ticket pricing overall. It basically says that the artists give the promoter a dollar amount they want to earn per show and the promoters then set out to determine a good ticket price that will make sure they bring in enough revenue to pay the artist, cover the costs and still make money.

Stop your killing Damian's greedy record company theory lol

[Varius]

Ticket prices are set by the promoter; sometimes in conjunction with the band/artist/booking firm.

For example, say you have a 5000-person venue.

Scenario A) Booking Agent/Artist receives flat $100,000 fee.

Perhaps, the venue knows it averages $30 a head on drinks, so can afford to charge $15 a ticket and still make a profit. Maybe they want to be greedy and charge $25 as they know they will still sell out at that price level. This has zero to do with the artist, booking agent OR especially record company.

Scenario B) Booking Agent/Artist receives flat $50,000 fee + 50% of the ticket revenue.

The Booking Agent/Artist have a figure in mind. They may have some say in the pricing, but ultimately will trust the venue/promoter knows his venue and demographic and what price range will work best to make them all happy. Record company has zero involvement.

Scenario C) Primadonna artists

Here is where the artist will be someone like Madonna; who, for reputation, never wants her tickets to be sold below X$ no matter the venue. Again, this very likely has absolutely nothing to do with the record company but 99% is the artist and their agent, or PR/reputation people (feeding the artist this input).

Record companies may have a % (depends on their contract with the artist) they receive of all artist's appearance revenue; but they have pretty much ZERO say in ticket prices.