How The Music Industry Is Putting Itself Out Of Business – Forbes
There was once a time when mid-level bands with a modest following could make a pretty decent living playing music. Theyâd put out a record, sell a couple hundred thousand copies and then go on tour to promote it â which would drive additional sales, even as the tour itself was lucky to break even.
For the largest acts, this formula was a bona fide money-making bonanza, lining the pockets of all involved, including the musicians, managers, promoters and record labels. For everyone else, it didnât produce vast riches but nonetheless supported careers and promoted the creation of new music.
Times, however, have changed. Besides a handful of superstars, itâs impossible for bands and musicians to generate significant revenue taking this approach. And the reason is simple: Consumers wonât pay much for music.
Napster jump-started this trend back in the 90s, pirating content and making it available online, producing a generation of listeners who didn’t value music because they were able to download it for free. Then, streaming services basically continued the practice.
The likes of Pandora and Spotify donât steal content, but they still offer it for free with the support of ads. Others such as Apple Music and Amazon Music obviously arenât stealing either and do charge users, but itâs a nominal fee. Both models result in most artists getting the shaft, receiving, in most instances, less than a penny per stream.
(Incidentally, the streaming services themselves arenât fairing much better. Pandora and Spotify have always struggled to turn a profit, while Apple Music and Amazon Music are money losers, in place as part of broader distribution play that merely supports other parts of their companyâs other businesses. Another irony is that music has become devalued at a time when there are more ways than ever to promote it, thanks to social media platforms like Facebook, Twitter, Instagram and Snapchat).
Because of this, musicians have had to adjust. Some have begun to focus their efforts on brand building, using their music, in effect, as a form of advertising to hock products and services for companies. Megastars like Beyonce and Lady Gaga, and Michael Jackson before them, have always done this, pushing everything from soft drinks to clothing to fragrances.
But more and more, musicians from across the spectrum are pursuing this path to prosper. One good example is Gary Clark Jr., a talented artist but hardly a household name who has endorsement deals with Lincoln and John Varvatos. In the past, purists probably would have called him a âsell out.â Now, it’s called getting paid.
Ostensibly, playing concerts is another way to boost the bottom line. But save a precious few, most musicians are neither able to draw big audiences nor command the type of prices that make touring worthwhile â and the ones that can are senior citizens who play to audiences that are either roughly the same age or only slightly younger.