Show Me the Money!

Money. Money, money, money, money, money, money, money, money.

When you go into the music industry, that is all your support system, your desires to advance, and even your fans want to talk about. Eventually, you kinda want it to go away and just make music in a cave where the IRS can’t hear you or find you. Pain in the bum as it is, it is quite necessary to further your career. We all know that a major label is good for “star power” and bad for money, but how bad can it really be? Well, let’s take a look at it through a topic near and dear to this blog’s heart: streaming!

Now, we all know that, because of severely outdated copyright laws, real money isn’t in streaming yet. However, you can still be paid via streaming. The chart below shows recent estimations of how much an artist can expect per stream across a few popular streaming services:

ryaltypayouts1

While it does take quite a few streams to generate a dollar, let’s talk about where that dollar goes. Regardless of whether or not you are indie or a major label artist, you have middle med to go through before you can see any of that sweet lifeblood of your career. You may end up having more or less middlemen depending on your career path, but one thing remains true: the major lables don’t care about your wallet.

When you’re signed to a major label, a lot of your fees may look like they go to a lot of different middlemen. In reality, they’re all label affiliates. So, when all is said and done and you have the $1 of streaming royalties, you, you lucky soul, you get to keep a whopping $0.16! That’s right, you’re not even a quarter of your own royalties!

When you’re an indie artist, your middlemen are actually spread out and in your favor. And, if you’re really DIY when it comes to your career, you can actually eliminate some middle men. Once you’ve made that $1 of streaming, you know what you get to keep on average? $0.64 – that’s four times what an artist on a major label makes.

This absolutely does not surprise me. It takes so much to break even on a major label, you have to – at least – sell gold. In fact, you may never achieve a good financial success until diamond status, if your label promotes you enough and you can recover your losses from the highly expensive promotion a lable will do for you. Really, for me, this is just more incentive to be indie; more direct pay is the obvious way to go.

With these stats being released and an increasing number of direct pay options emerging for creators, the major lables should be in the process of ordering their caskets. The suits don’t care that creators need to make a living and creators are finally taking notice on a wider range. Really, if an artist can find 1,000 true fans, a major lable is a superfluous expense at this point. Instead of trying to model your career off of Michael Jackson, Cindy Lauper, or Madonna, realize that today’s market is for more Amanda Palmers, Icon For Hires, and The Black Keys.

If you would like to read the article that prompted this post, you can click here.

 

 

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