There has been a lot of discussion over the past couple of years about the “problem” of sharing music files online. It’s often painted as a battle between the record companies on one side and the file sharing services on the other. But there is a growing opinion that constant law suits and the criminalisation of downloaders is not the way forward (unless you’re a lawyer I guess) and that the whole business model for recorded music has to change.
Before we start though, Go and take a look at this site which shows how much money bands actually make from selling their music. The figures are startling to say the least. By that sites data to make the US minimum wage of $1160 per month a band would need to sell 143 self-produced CDs at $10 each, assuming $2 from each sale goes on manufacture and shipping.
Assuming it’s a 10 track album, that would be 1430 track sales to make the £1160. So how many tracks do you think they would need to sell via iTunes to make the same amount ? 2,000…. 3,000 …..?
Nope, more. Much more. In fact they reckon over 12,000.
OK, so how about the new fangled streaming services like Spotify. How many listens would a band need on there to make the same amount…
Ready for this… The answer is… over 4 million !!!!
So that’s some simple industry economics type stuff from informationisbeautiful.net
Looking at Spotify for a moment, it’s a service that almost everyone I know uses. It has a massive database of tracks and, if you can live with the adverts, is free to the end user. OK, the ads are bloody annoying but for many that annoyance is worth it when the alternative is paying money to listen to the music.
Right, soo, we know that people download music for free. It’s often illegal and you;re not going to stop us, I mean them. And we also know that most bands aren’t going to retire to their own tropical island off the proceeds of free alternatives to illegal downloads such as Spotify. So how do these bands make money through their music ?
We spoke to “one man guitar orchestra” Matt Stevens who has some innovative ideas, and some surprising opinions, on the state of the music industry. You can check out his amazing work on his website at http://www.mattstevensguitar.com/. Matt’s approach to making money through his music is an interesting one. He uses Bandcamp to make his work available for download on a “pay what you want” basis. This means that his music is available free if you don’t feel like parting with your cash.
And as Matt uses Bandcamp you can hear his amazing work using this player widget thing.
I started off by asking Matt the obvious question, is the music industry’s fight against piracy winnable ? His answer surprised me…
“I think its not that people think of it as piracy – its more sharing of things they love. Only the good content gets shared. The web is a bit of a double edge sword really, you gain an audience but they don’t have to pay for your content. I don’t believe the fight against downloading can be won and a lot of (not all) of the generation under 20 are moving away from even downloading and collecting as a concept, they just stream what they like off Youtube. For many ownership of music is becoming an outdated concept. In many niche genres ie Prog, Metal etc people still love physical product but its loosing ground in the mainstream. Even my mum uses Spotify now!”
So if you can’t win the fight and music is going to be available free anyway then the “pay what you like” model seems like a good one. If your music is going to be downloaded you may as well try to make something from it, even if it’s just an email address of someone who may buy a CD or pay for a gig ticket somewhere down the line. Matt reckons that this model isn’t for everyone though
“It depends on your audience, it varies from artist to artist what method would work and how connected the artist is with the audience. It worked extremely well for me in the early stages of building an audience and its given me a mailing list and people within my small niche know who I am. I believe obscurity is more of a problem than piracy and the more paywalls you put up on the web the more marketing you have to do before people discover your music. It needs to work as discovery, community then money. Once you have a supportive community of listeners you can then make a living from what you are doing.”
So, at the early stages of a career it’s clearly most important to get your name known, discovery, community, then money. Many of the people who buy Matt’s music at the moment “know” him through Facebook or Twitter, although as an artists profile grow will people who have had no previous interaction with them be as inclined to part with money for their wares ?
“This is a difficult one. Its worked well for me so far but that because up until fairly recently I had a very direct relationship with the audience, they knew me and liked the music and wanted to support me by paying. However recently the audience has grown in the thousands and that element of me knowing the people listening has changed slightly. I sell more signed CDs and the like now. People still pay for downloads, one guy paid £40 and that is hugely appreciated and my audience generally speaking are bloody lovely people. I reckon I’ll experiment with different methods of payment for music in the future, but pay what you want will always be an element of that.”
But it must be difficult to convince certain people that downloaded music is worth paying anything for, as there is no physical “thing” involved ?
“Yeah, there are some fairly militant people who believe all content should be free. But music costs a lot of money to record to a high standard, I’m happy to work for free to get to my musical goals but I don’t expect the engineer to, these people should be paid for what is highly skilled work. I want to make really great records and i am not prepared to compromise on that, the music is all important to me, its what I do all this for. I think its better to offer at least some sort of free option on your website or they would just torrent the music anyway, surely its better to engage in communication and get their email. I encourage people to copy and share my music with friends, at least then I have some chance that somewhere down the line it will reach someone who will pay for the music.”
Personally I like to have the CDs, but even in this increasingly digital age if people are paying for music are they more prepared to pay for a physical object rather than a download ? Matt’s answer is fairly unequivocal
“Very much so especially recently, people really want CDs and around 50% want signed ones, its something real and I understand that. Also if you hard drive goes you won’t loose it!”
There have been some experiments by labels with changing their ideas, for example Two years ago Gama Bomb became the first signed band to give away their album for free (and you can still get it here), a business model that relies on touring revenue and merch sales for income and effectively uses the recorded product as a promotional tool for that. What did Matt think of this approach ?
“Well this approach kind of dates back to the Grateful Dead who used to let people tape and trade their concerts. The basis of the model is you will create a community which you can monetize later on, like tech start ups like Google and Twitter did – once you have people there you can figure out how to make money from them. With most labels bands get paid little to nothing anyway after they often fail to recoup. Why you’d need to be signed to do this I don’t really know unless the label can help with PR/Marketing/Tour support, many people at labels have some really useful skills but there is no reason you can’t hire PR etc yourself . I would imagine Gama Bomb must be signed to some kind of 360 degree deal where the label takes a percentage of touring/merch. Most bands would be better off with a bank loan than a label. With a label you often end up paying back the costs anyway, but the label still own all the rights to your work, which is ridiculous. Just because its been standard practice in the industry for years doesn’t make it any less bullshit.”
And it’s this building up a community that’s important for smaller bands and artists. Although many are prepared to give their music away for free they still want people to obtain it through the band’s site and add themselves to the mailing list etc. I guess that still means that band’s material being on the “pirate” sites takes away this possibility of interaction, even though there’s no immediately obvious commercial impact ? Again the answer surprised me”
“I was really pleased when I saw my album on the torrent sites to be honest, some people just use the torrents to get music like some people use iTunes and some use HMV. That’s their way of getting music so you need to be there. If my album hadn’t been torrented I would be busy figuring out a way of getting it up there!! Like I say people only share the music they like so its a compliment really, its great to get mail from Japan and Korea and Germany and Brazil – its amazing the music is being found across the world.
Look at the resent resurgence in progressive rock – i believe that’s due to fans being able to share and a discover music that the mainstream wasn’t interested in up until recently. What chance would my music have stood in the the 90s – you can’t go into a label and say i want to make an album of esoteric guitar music in funny time signatures and by the way I’m a 35 year old fella with a beard!!? So the web as a sharing tool is wonderful thing, bands just need to be a bit more imaginative with their business model i.e. monetize streaming gigs, signed stuff, box sets etc. It can be done, its not the end of the music industry its just evolution.”
Or, better still, why not go buy a CD from his Bandcamp page ?