Why Music Is Broken – The Artist To Consumer Connection

There is a fascinating story on TorrentFreak regarding the revenues for an artist from a streaming service such as Spotify. Or, more correctly, the lack thereof. The popular Lady Gaga makes quasi-nil from Spotify, despite being a top artist on the service.

This is an excellent example of the inherent problem in the musical industry. If we cannot fix this, piracy will never be abated.

The problem is the lack of a connection between the dollar of the consumer, and collection of that money by the artist. Right now, the lengthy and convoluted transfer process sucks the dollar dry, depositing a few spry cents in the hands of he artist.

Of course, this is supposed to be “the way it works,” due to high costs involved with music production and the like, but it seems to be nearly endless. Once an artist has paid back the recording costs in royalties, the rates that artist receives are still pathetic.

If I put my music on Amie Street, and I sell a song, I get the majority of the money. If I am a major label artist, and I sell a song on iTunes, I get a far, far smaller cut.

The connection from the fan to the band, financially, has been broken. The fan knows that their purchase will hardly help the band, or more precisely that the marginal benefit from their purchase to the band is near zero, so why do it? The cost to the fan is much higher than the marginal benefit to the band, so the fan just torrents the damn song.

There was a lot of noise when Brogan and Gary V wrote their books. Pundits said that internet people do not actually buy things, so both books were straight going to fail. Bullshit, it turned out. Crush It and Trust Agents both did well. People will still pay for quality, and they will pay if the know where the money is going.

How many people do you think bought Crush It because it was a good book, versus it being the Gary V book. Something to think about.

The vision from the consumer of the music industry is a dark room with cigar smoking lawyers. A far cry from the mixing board or the stage.

The point is, until there is a much more direct line from my purchase, to the coffers of my favorite band, I will (euphemistically) be inclined to take the lowest cost route, and fire up The Pirate Bay.

What to do? Well, artists need to stand up and attempt to take control of the situation, especially with emerging market openings such as Spotify. There is no industry without artists.

It has long been like this, out of proportion. But there was never an alternative solution to acquiring music. Now there is. I would make a healthy wager that if there was a way for people to buy music, where a full 50% of the total cost went to the band, sales would double. Overnight.

Food for thought. What do you think about the artist pay model with Spotify, and in general?