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Think piracy is killing the music industry? This chart suggests otherwise

124 points by Libertatea 13y ago

ksmith107 13y ago
i guess this proves giving the people what they want isnt a bad thing
timje1 13y ago
"Data provided by the music industry were misleading; contrary to what lobbying organisations were claiming, the music industry was doing reasonably well." In my mind, this is the real clincher, and the reason why this chart runs counter to previous (false?) data - although I'd love to see their evidence for this statement. Edit : their reasoning is explained by http://eprints.lse.ac.uk/33905/1/LSEMPPBrief1.pdf http://eprints.lse.ac.uk/33905/1/LSEMPPBrief1.pdf pages 4-9
TallGuyShort 13y ago
They keep talking about "the industry", but I don't think anyone's been saying the entire industry was being killed. It's the recording companies that have been complaining, and yeah - their orange line doesn't look too healthy. As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?
- kbenson 13y ago
  It does seem a bit disingenuous to show that graph and completely gloss over portion of the graph describing how the record companies are (apparently) making half as much as they used to. To be clear, I don't think that's necessarily a bad thing. At this point I think the record companies can be viewed as quite a bit more parasitic than they could have been in the past. Not because they've changed, but because the ecosystem has changed to provide much of what they offer in alternative, cheaper ways.
  - icebraining 13y ago
    I don't think it's disingenuous at all. It's a reply to their decades-old claim¹ that piracy is killing music. Disingenuous is the implicit assumption in their argument that music and the music industry is all about them. ¹ http://en.wikipedia.org/wiki/Home_Taping_Is_Killing_Music http://en.wikipedia.org/wiki/Home_Taping_Is_Killing_Music
    - kbenson 13y ago
      I agree the record companies haven't been very forthright, but I don't think that's an excuse for how this was presented. I think in a link that consists of a few paragraphs and a big graph showing revenue over time, if the revenue for every segment except one is going up, but that one segment goes down enough to cause the aggregate to go down, that deserves mention. To me, the topic is loaded enough and the case obvious enough that the omission looks purposeful. I applaud the goal of the article, but I can't do the same for the method.
- belorn 13y ago
  Half of the decline on the orange line can be accounted in purchases from streaming/phone market. Reading the original report, I don't see them saying that "the industry" isn't getting a part of the online revenue.
- kevincennis 13y ago
  "As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?" Historically, yes. Labels generally had very little to do with concerts. These days, a lot of artists are signing "360 deals", which means that the label receives a cut of basically all the artist's revenue streams, including touring and merchandise. http://en.wikipedia.org/wiki/360_deal http://en.wikipedia.org/wiki/360_deal
  - kbenson 13y ago
    A (hopefully) smaller cut of everything instead of a large cut of specific revenue streams seems like it might encourage better record company behavior. Rather than highly promoting specific sections of the revenue stream to the detriment to others (overplaying on the radio causing lack of interest before the tour is done, etc), a more holistic approach may emerge, which better benefits all parties.
    - kevincennis 13y ago
      I have a few friends in pretty successful bands, and most of them (and other artists they know) tend to have a pretty negative view of the 360 deal. My impression is that it's generally considered to be the only option in most cases. In certain segments of the music industry, major labels are still basically the gatekeepers. Wanna be the next Modest Mouse? Fine. You can put a few records out on a small indie label and do pretty well. Wanna be the next Taylor Swift? You pretty much need a huge label like Universal. The discovery channels for certain types of music are a lot narrower. If you're an aspiring pop singer, you need pop radio. And you won't get it without major label backing. So the labels have the power to basically say "Here's the deal we're willing to offer. You can take it or leave it". Most artists would probably be better off keeping the majority of their touring profits (since, along with licensing, I think that usually tends to be the biggest source of income) -- but if they're stuck between a bad deal and no deal, a lot of artists will take what they can get.
      - kbenson 13y ago
- apalmer 13y ago
  Newer record contracts often require a significant split of concert/endorsement monies. I don't know if 'most' of the money goes to artists or record labels under these new contracts... I would guess that the artists get much larger percentage of concert/endorsements than raw record sales.
- hipsters_unite 13y ago
  I think the bit that is very galling to everybody that works on the ground floor of the industry - that is, the writers, micro-labels, PRs etc that see the artists starting out - is that people keep talking about these majors as if they are the whole industry. The micro-labels, independent and DIY acts are a big part of how the industry works now, especially for new acts versus established ones. The big labels might have taken a hit, but general consumption patterns have hit smaller artists, venues and labels as bad if not worse, if only because their size of revenue was smaller to begin with.
williamcotton 13y ago
These articles are pointless. This guy knows nothing about being a professional musician. The investment money is gone. Record labels functioned as venture capital firms. Their bread and butter, the physical audio disc, is no longer. No other entity has yet stepped in to provide mentorship and investment capital for young, bootstrapped musicians. The schedules of musicians do not align with the modern working world. Employers do not look highly on people who take 8 weeks off to tour. In order to make money touring, you have to be pretty well established. Also, unlike software development, there is no 'day job' that musicians can work while saving to bootstrap their own venture. Their only option is are low-paying temp jobs, mainly in the service industry, that they must frequently quit in order to work on their craft. And if concerts and not recorded albums are their craft, they will need to spend lots of time on the road perfecting it. But how? Practice does not make you a good stage performer. And you can't play 10 times a month in your home city and expect fans, promoters, or clubs to think nicely af you. Sure, there are still new music artists that emerge, but nowhere in the numbers that they have in the past. It is ultimately a dying art form and those that don't see that and in fact argue the opposite, don't have any inkling of what is actually going on.
- apalmer 13y ago
  Are you claiming that music is a dying art form? Really? The music industry is at best a 100 year old historical anomaly compared to the at least 4000 year history of music. The life of musician has pretty much always been extremely unlikely to be financially rewarding. Even at the height of the modern music industry maybe 1 in 1000 aspiring musicians ended up being signed to a major label. Musicians by and large have always made the bulk of their income based on in person performances. The only difference now is music companies now are losing out on record sales and starting to design contracts where artists have to split show and endorsement money with the label as well as record sales. Honestly its a moot point, the technology has changed, and the music industry has to change with it or die. The whole music industry was created by the technology of the record, and will change or die with the advent of easily copyable media.
  - hipsters_unite 13y ago
zby 13y ago
A similar study from Norway: http://www.espen.com/thesis-bjerkoe-sorbo.pdf http://www.espen.com/thesis-bjerkoe-sorbo.pdf and from Sweden: http://ec.europa.eu/avpolicy/docs/other_actions/col_2009/pub/kth_annex.pdf http://ec.europa.eu/avpolicy/docs/other_actions/col_2009/pub... Overall? Less sales more concerts - and musicians earn bigger percentage of money from concerts - so there are more musicians and a little bit better earning.
- hipsters_unite 13y ago
  For newer artists though it used to be that labels offered tour support to help with costs. Now, a lot of smaller bands doing national tours that I've spoke to are instead of taking their pay from merch sold while on tour instead using that money to cover costs.
dalai 13y ago
Well the problem with trying to counter the argument that piracy is killing the music industry is that we are talking about potential sales that would have happened in a universe where no piracy existed. I doubt the graph will help much. They can still claim that with the trends before 2004 the total revenue should have exceeded $100 billion so they still lost $40 (imaginary) billion.
danso 13y ago
> To be sure, the industry hasn't enjoyed the strong growth it saw in previous decades. Revenues are down slightly since the peak about a decade ago. But there are still plenty of opportunities to earn a living making music fans love. So, yeah, that'a a big caveat. Notice how the graph, on the left side, cuts off where we see the end of a steep upward slope. How steep was that slope for the previous 20 to 30 years? That's kind of relevant to the argument.
hipsters_unite 13y ago
One thing that graph completely fails to address is the fact that economies of scale have massively driven all the good news there. For example, having a massive back catalogue means you can earn more from Spotify or Rdio. Good news for the biggest players, bad news for everyone else.
beat 13y ago
Major record labels are the venture capitalists of the music world. They invest large amounts of capital in a small number of artists, hoping for big hits that are highly profitable. Most aren't, so they're savagely dumped. Worse, unlike venture capital, record labels insist on control over the reproduction rights of the music they fund, so artists lose control over their own work. It's a really crappy deal for musicians, unless they're one of the lucky handful who go platinum. When these articles talk about "the music industry", they're really talking about the major labels. They're getting beaten up, and for good reason. It's not piracy - it's distribution costs, which are converging on zero due to Internet technology. The labels were needed when it was an incredibly expensive and difficult proposition to put copies of a record in thousands of record stores. Today, artists can just put their music out on the cloud basically for free, and pay a very reasonable and competitive fee on download costs and payment processing from the likes of iTunes, CDBaby, Bandcamp, and others. At this point, what are the major labels bringing to the table? Their increasingly irrelevant marketing prowness? Their marketing was based heavily on de-risking due to the investment expense (which is why the major labels pushed so much tame, crappy music - it was safe). That's exactly the opposite of what many musicians need! So yeah. Musicians are doing fine. It's not as easy to get filthy rich now, but it's a lot easier to make a decent living doing what they love, without compromise. As for the major labels? Don't let the door hit you on the way out.
- res0nat0r 13y ago
  > At this point, what are the major labels bringing to the table? Their increasingly irrelevant marketing prowness? Everyone likes to cite Bieber as making it on his own, but he was a nobody before someone related to Usher at a big label stepped in and helped shoot him into the stratosphere. > So yeah. Musicians are doing fine. I'd argue a lot of musicians see it different. Now many have to debate giving up their day jobs because they're forced to tour 24x7 since they can't rely on selling cd's anymore since it is so easy to pirate them.
- whiddershins 13y ago
  Musicians are doing fine? I'm sorry but you base that on what? Because I live in NYC and am acquainted with a representative cross section of professional and aspiring musicians across several genres and including rock stars, sidemen, classical musicians, jazz musicians, jingle writers, you name it. And overall, most people are hurting. It is harder than it was. Some people who write for TV and commercials are doing ok, some great. Some mid sized bands are doing great. Most everyone else is taking a beating.
trhaynes 13y ago
The x axis is misleading. The gaps (in years) are: 2, 4, 4, 1, 1, 1.
- tonylemesmer 13y ago
  ah yes, the wonderful Excel line graph. Always use scatter!
JesseAldridge 13y ago
The graph doesn't mention whether it's adjusted for inflation. If it isn't then the trend is actually downward. $50K 1998 corresponds to $69K 2011. http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm
Tyrannosaurs 13y ago
Three interesting things here: 1) Revenue from recording IS dropping. Some of that is people consuming it differently (hence the uptick in mobile / internet), some may be piracy, some may be disinterest / people preferring to spend money elsewhere. 2) How the music industry has closed the gap - the biggest increase is in money from concerts, which makes sense - if the record companies are scared, rightly or wrongly, of piracy, focus on something you can't pirate - the live experience. 3) What does this mean for books, movies and other media in the move to digital? In particular books don't have a concert equivalent to pick up the slack. Yes authors tour but they're not going to make money out of it the way a band does. Will they see a similar drop off and if so how will they fill it?
- ScottWhigham 13y ago
  For #2, the 360 deal (and its variants) arose to mitigate this - http://en.wikipedia.org/wiki/360_deal http://en.wikipedia.org/wiki/360_deal For #3, I think we consume books/movies so differently that what happens in the music industry has no effect on other mediums. The biggest change since 1983, for example, is that people today have the opportunity to hear any and every song they want all day, every day without having to pay. Sure, you might need to listen to a commercial every once in a while (Spotify, Youtube, Pandora, etc) but that's okay - you aren't a "pirate" if you use those services so it's cool. And you can go about your daily life while doing so - you can listen to 8+ hours of music at work today if you want and still get your work done. That didn't happen back in 1983 - if you got to listen to music, you'd share that music with everyone else in the office and it would either be muzak (!) or a radio station. You didn't get to have these deep niches and deep preferences that Spotify/et al allow. Movies though - that requires your full attention. Can you read a book while you code? Can you watch a movie while you do your company's books? It's just too different.
  - Tyrannosaurs 13y ago
    Not saying that the music industry impacts the other industries, just that there are parallels in the move to a digital world and these may be things that will apply. But yes, there are differences, but there will be similarities too.
scorcher 13y ago
This graph is pointless, revenue is not the same as profit. Sure total revenue has stayed the same but that tells you nothing about profit. One the the major increases in revenue is concerts. They are expensive and often operated at a loss to promote physical media sales
- tunesmith 13y ago
  The belief that touring is a panacea really cracks me up. Touring does not make money for indie musicians. Maybe for the top 1% or less, fine - there are always anecdotes - but far, far more common is the kind of tour where you save up money, sleep on couches or share a motel 6 bed with a bandmate, eat crappy food, play to mostly empty rooms to people that are turned away from you talking to their friends, for a door fee that doesn't cover your food and gas money. And that's for good musicians. The bad musicians don't tour.
k-mcgrady 13y ago
I don't think piracy has been a problem for a while. Most casual pirates transitioned to free streaming services/YouTube. The odd ranges on the x-axis also make this chart a little misleading. It's also interesting to note how revenues switching from recorded music to concerts will effect artists. Previously you could go into the studio, record an album, and sell it. You then tour behind it to promote it. Now with the money coming mostly from concerts you will have to tour a lot more. In other words revenue from concerts has gone up but it takes a lot more work to make money from concerts than recorded music.
dylandrop 13y ago
Scale of years is uneven, revenue != profit. Also, if the only thing that's countering the loss in album sales is concerts, I think we should take a look at ticket prices for concerts. I think they've grown to be ridiculously (prohibitively) expensive over the years, which is just wrong.
rootedbox 13y ago
the report doesn't seem to compensate for inflation shrug
sigzero 13y ago
What does the report say about it being ethically wrong?
crucialfelix 13y ago
Always left out of these graphs: there are more musicians than ever before, and vastly more recordings being released. Earnings at the top are higher than ever, and the tail is longer and shallower.
tunesmith 13y ago
There really are some forms of music that are better suited for recordings, as opposed to stages. People insist on conflating them by saying "It's okay that it's harder to sell recorded music - just go on tour!" when that point really doesn't make a lot of sense.
bitwize 13y ago
According to every small-time musician I've spoken to, piracy killed the indie music scene. In particular, Boston used to have a vibrant music scene that's all but dried up now, and every former musician who played that scene I've spoken to points the finger at file sharing. This is because piracy changes the economics of how the major labels behave. Before, major labels used to take risks on what they thought might be the "next big thing" in order to reap the profits when it does turn out to be popular -- and landing a major label contract, and the attendant fame and fortune, is what motivated many bands to get together and play. These days, however, if the "next big thing" is starting to show signs of catching on, that probably means its music is already pirated and all over BitTorrent, and that's like Kryptonite to a major label. So they don't sign that cool new band and the band has to make do with concert and T-shirt sales and word-of-mouth. And that may mean having to choose between your music and putting food on the table. To most musicians, your "big break" is how you make a living with your music. It also brings the quality of music down, as now the major labels will only invest in "sure bets" like Miley Cyrus, Taylor Swift, or Justin Bieber. The ones that don't get signed to major labels either take nine-to-five jobs and stop playing, or are so in love with their music that they don't mind being penniless hipsters. Most can't achieve the critical mass it takes to build a large fan base, so most people's conception of what music is is disproportionately influenced by the formulaic "sure bet" acts. So support your local musicians. Support DRM.
- acuozzo 13y ago
  > So support your local musicians. Yes, I will. > Support DRM. No, I won't.
- skore 13y ago
  Not sure if serious... Music labels have always sold what is popular, they don't care whether it's good or not, they're a business. For a while, they were quite good at it, but then they started to suck at it and then the money dried up. Now all they have left is investing in "sure bets". Filesharing simply accelerated that process and showed the underlying error more quickly. Look - Art is hard. For a little while, there was a lot of money in music. Droves of indie musicians missed that train and now they're jealous of the success of youngsters that you really shouldn't envy for a nanosecond. It's particularly sorry that they blame their fans for it. The reality is: Their music is only good enough for a little filesharing. And that's why they don't get signed. Most "good" musicians who are also reasonably popular have worked their asses off day and night for decades. Success in art is about getting the privilege to translate your innermost into something that can be shared and then seeing it resonate with people so much that they want to share it forward. Translating your innermost into art that resonates with people is frigging hard and takes years and years. Having it resonate with more and more people so you build momentum takes years and years again. Either you're with that, or don't go down that road. There is no manna raining from the sky and there is very definitely no guarantee for manna raining from the sky that is unfortunately wasted on those you think don't deserve it. That's petty and self destructive (hey, indie musicians). If you think you deserve something, but somebody else who doesn't deserve it gets it, you have a lot of soul searching to do. Especially if you're that bitter in your early twenties. As Stephen Fry said: Self Pity (as a superset of hate) will destroy everything except itself.
Tycho 13y ago
I hate this idea that concerts are this more nobel endeavor and the saviour of music. Concerts for most popular music are a low-value-add phenomenon. It's the equivalent of going to a WWE show. They usually involve childish antics which then passes as an 'amazing' concert performance. It's never really about the music, yet is considered 'authentic.'
fnbaptiste 13y ago
Not surprised at all to see the concerts line going up in this chart. The amount of money my friends and I spend on live music is getting out of hand lately, largely because mid-sized acts can now charge big prices for tickets. I like the fact that 'indie' acts now sell out shows in decent venues and can get away with charging $60+ for tickets. I think the pirating of music is making things a lot easier for those mid-sized bands to push their way into getting a decent-sized world-wide audience. I think groups like Chvrches or The Naked and Famous (both of which coming to my city in the next month, selling tickets at $60+, and likely to sell out their venues) have probably benefited a lot from the pirating of their music. I've never paid for either of their music, nor has anyone I know (in fact, I know very few people who still regularly pay for music at all), but most of my social circle are likely to go to one or both of those shows.
Schwolop 13y ago
Worst graph ever. I know! Let's do linear extrapolation from a graph with a non-linear dependent axis!

124 points by Libertatea 13y ago

i guess this proves giving the people what they want isnt a bad thing

"Data provided by the music industry were misleading; contrary to what lobbying organisations were claiming, the music industry was doing reasonably well." In my mind, this is the real clincher, and the reason why this chart runs counter to previous (false?) data - although I'd love to see their evidence for this statement. Edit : their reasoning is explained by http://eprints.lse.ac.uk/33905/1/LSEMPPBrief1.pdf http://eprints.lse.ac.uk/33905/1/LSEMPPBrief1.pdf pages 4-9

TallGuyShort 13y ago

They keep talking about "the industry", but I don't think anyone's been saying the entire industry was being killed. It's the recording companies that have been complaining, and yeah - their orange line doesn't look too healthy. As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?

kbenson 13y ago
It does seem a bit disingenuous to show that graph and completely gloss over portion of the graph describing how the record companies are (apparently) making half as much as they used to. To be clear, I don't think that's necessarily a bad thing. At this point I think the record companies can be viewed as quite a bit more parasitic than they could have been in the past. Not because they've changed, but because the ecosystem has changed to provide much of what they offer in alternative, cheaper ways.
- icebraining 13y ago
  I don't think it's disingenuous at all. It's a reply to their decades-old claim¹ that piracy is killing music. Disingenuous is the implicit assumption in their argument that music and the music industry is all about them. ¹ http://en.wikipedia.org/wiki/Home_Taping_Is_Killing_Music http://en.wikipedia.org/wiki/Home_Taping_Is_Killing_Music
  - kbenson 13y ago
    I agree the record companies haven't been very forthright, but I don't think that's an excuse for how this was presented. I think in a link that consists of a few paragraphs and a big graph showing revenue over time, if the revenue for every segment except one is going up, but that one segment goes down enough to cause the aggregate to go down, that deserves mention. To me, the topic is loaded enough and the case obvious enough that the omission looks purposeful. I applaud the goal of the article, but I can't do the same for the method.
belorn 13y ago
Half of the decline on the orange line can be accounted in purchases from streaming/phone market. Reading the original report, I don't see them saying that "the industry" isn't getting a part of the online revenue.
kevincennis 13y ago
"As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?" Historically, yes. Labels generally had very little to do with concerts. These days, a lot of artists are signing "360 deals", which means that the label receives a cut of basically all the artist's revenue streams, including touring and merchandise. http://en.wikipedia.org/wiki/360_deal http://en.wikipedia.org/wiki/360_deal
- kbenson 13y ago
  A (hopefully) smaller cut of everything instead of a large cut of specific revenue streams seems like it might encourage better record company behavior. Rather than highly promoting specific sections of the revenue stream to the detriment to others (overplaying on the radio causing lack of interest before the tour is done, etc), a more holistic approach may emerge, which better benefits all parties.
  - kevincennis 13y ago
    I have a few friends in pretty successful bands, and most of them (and other artists they know) tend to have a pretty negative view of the 360 deal. My impression is that it's generally considered to be the only option in most cases. In certain segments of the music industry, major labels are still basically the gatekeepers. Wanna be the next Modest Mouse? Fine. You can put a few records out on a small indie label and do pretty well. Wanna be the next Taylor Swift? You pretty much need a huge label like Universal. The discovery channels for certain types of music are a lot narrower. If you're an aspiring pop singer, you need pop radio. And you won't get it without major label backing. So the labels have the power to basically say "Here's the deal we're willing to offer. You can take it or leave it". Most artists would probably be better off keeping the majority of their touring profits (since, along with licensing, I think that usually tends to be the biggest source of income) -- but if they're stuck between a bad deal and no deal, a lot of artists will take what they can get.
    - kbenson 13y ago
apalmer 13y ago
Newer record contracts often require a significant split of concert/endorsement monies. I don't know if 'most' of the money goes to artists or record labels under these new contracts... I would guess that the artists get much larger percentage of concert/endorsements than raw record sales.
hipsters_unite 13y ago
I think the bit that is very galling to everybody that works on the ground floor of the industry - that is, the writers, micro-labels, PRs etc that see the artists starting out - is that people keep talking about these majors as if they are the whole industry. The micro-labels, independent and DIY acts are a big part of how the industry works now, especially for new acts versus established ones. The big labels might have taken a hit, but general consumption patterns have hit smaller artists, venues and labels as bad if not worse, if only because their size of revenue was smaller to begin with.

williamcotton 13y ago

These articles are pointless. This guy knows nothing about being a professional musician. The investment money is gone. Record labels functioned as venture capital firms. Their bread and butter, the physical audio disc, is no longer. No other entity has yet stepped in to provide mentorship and investment capital for young, bootstrapped musicians. The schedules of musicians do not align with the modern working world. Employers do not look highly on people who take 8 weeks off to tour. In order to make money touring, you have to be pretty well established. Also, unlike software development, there is no 'day job' that musicians can work while saving to bootstrap their own venture. Their only option is are low-paying temp jobs, mainly in the service industry, that they must frequently quit in order to work on their craft. And if concerts and not recorded albums are their craft, they will need to spend lots of time on the road perfecting it. But how? Practice does not make you a good stage performer. And you can't play 10 times a month in your home city and expect fans, promoters, or clubs to think nicely af you. Sure, there are still new music artists that emerge, but nowhere in the numbers that they have in the past. It is ultimately a dying art form and those that don't see that and in fact argue the opposite, don't have any inkling of what is actually going on.

apalmer 13y ago
Are you claiming that music is a dying art form? Really? The music industry is at best a 100 year old historical anomaly compared to the at least 4000 year history of music. The life of musician has pretty much always been extremely unlikely to be financially rewarding. Even at the height of the modern music industry maybe 1 in 1000 aspiring musicians ended up being signed to a major label. Musicians by and large have always made the bulk of their income based on in person performances. The only difference now is music companies now are losing out on record sales and starting to design contracts where artists have to split show and endorsement money with the label as well as record sales. Honestly its a moot point, the technology has changed, and the music industry has to change with it or die. The whole music industry was created by the technology of the record, and will change or die with the advent of easily copyable media.
- hipsters_unite 13y ago

zby 13y ago

A similar study from Norway: http://www.espen.com/thesis-bjerkoe-sorbo.pdf http://www.espen.com/thesis-bjerkoe-sorbo.pdf and from Sweden: http://ec.europa.eu/avpolicy/docs/other_actions/col_2009/pub/kth_annex.pdf http://ec.europa.eu/avpolicy/docs/other_actions/col_2009/pub... Overall? Less sales more concerts - and musicians earn bigger percentage of money from concerts - so there are more musicians and a little bit better earning.

hipsters_unite 13y ago
For newer artists though it used to be that labels offered tour support to help with costs. Now, a lot of smaller bands doing national tours that I've spoke to are instead of taking their pay from merch sold while on tour instead using that money to cover costs.

dalai 13y ago

Well the problem with trying to counter the argument that piracy is killing the music industry is that we are talking about potential sales that would have happened in a universe where no piracy existed. I doubt the graph will help much. They can still claim that with the trends before 2004 the total revenue should have exceeded $100 billion so they still lost $40 (imaginary) billion.

danso 13y ago

> To be sure, the industry hasn't enjoyed the strong growth it saw in previous decades. Revenues are down slightly since the peak about a decade ago. But there are still plenty of opportunities to earn a living making music fans love. So, yeah, that'a a big caveat. Notice how the graph, on the left side, cuts off where we see the end of a steep upward slope. How steep was that slope for the previous 20 to 30 years? That's kind of relevant to the argument.

hipsters_unite 13y ago

One thing that graph completely fails to address is the fact that economies of scale have massively driven all the good news there. For example, having a massive back catalogue means you can earn more from Spotify or Rdio. Good news for the biggest players, bad news for everyone else.

beat 13y ago

Major record labels are the venture capitalists of the music world. They invest large amounts of capital in a small number of artists, hoping for big hits that are highly profitable. Most aren't, so they're savagely dumped. Worse, unlike venture capital, record labels insist on control over the reproduction rights of the music they fund, so artists lose control over their own work. It's a really crappy deal for musicians, unless they're one of the lucky handful who go platinum. When these articles talk about "the music industry", they're really talking about the major labels. They're getting beaten up, and for good reason. It's not piracy - it's distribution costs, which are converging on zero due to Internet technology. The labels were needed when it was an incredibly expensive and difficult proposition to put copies of a record in thousands of record stores. Today, artists can just put their music out on the cloud basically for free, and pay a very reasonable and competitive fee on download costs and payment processing from the likes of iTunes, CDBaby, Bandcamp, and others. At this point, what are the major labels bringing to the table? Their increasingly irrelevant marketing prowness? Their marketing was based heavily on de-risking due to the investment expense (which is why the major labels pushed so much tame, crappy music - it was safe). That's exactly the opposite of what many musicians need! So yeah. Musicians are doing fine. It's not as easy to get filthy rich now, but it's a lot easier to make a decent living doing what they love, without compromise. As for the major labels? Don't let the door hit you on the way out.

res0nat0r 13y ago
> At this point, what are the major labels bringing to the table? Their increasingly irrelevant marketing prowness? Everyone likes to cite Bieber as making it on his own, but he was a nobody before someone related to Usher at a big label stepped in and helped shoot him into the stratosphere. > So yeah. Musicians are doing fine. I'd argue a lot of musicians see it different. Now many have to debate giving up their day jobs because they're forced to tour 24x7 since they can't rely on selling cd's anymore since it is so easy to pirate them.
whiddershins 13y ago
Musicians are doing fine? I'm sorry but you base that on what? Because I live in NYC and am acquainted with a representative cross section of professional and aspiring musicians across several genres and including rock stars, sidemen, classical musicians, jazz musicians, jingle writers, you name it. And overall, most people are hurting. It is harder than it was. Some people who write for TV and commercials are doing ok, some great. Some mid sized bands are doing great. Most everyone else is taking a beating.

trhaynes 13y ago

The x axis is misleading. The gaps (in years) are: 2, 4, 4, 1, 1, 1.

tonylemesmer 13y ago
ah yes, the wonderful Excel line graph. Always use scatter!

JesseAldridge 13y ago

The graph doesn't mention whether it's adjusted for inflation. If it isn't then the trend is actually downward. $50K 1998 corresponds to $69K 2011. http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm

Tyrannosaurs 13y ago

Three interesting things here: 1) Revenue from recording IS dropping. Some of that is people consuming it differently (hence the uptick in mobile / internet), some may be piracy, some may be disinterest / people preferring to spend money elsewhere. 2) How the music industry has closed the gap - the biggest increase is in money from concerts, which makes sense - if the record companies are scared, rightly or wrongly, of piracy, focus on something you can't pirate - the live experience. 3) What does this mean for books, movies and other media in the move to digital? In particular books don't have a concert equivalent to pick up the slack. Yes authors tour but they're not going to make money out of it the way a band does. Will they see a similar drop off and if so how will they fill it?

ScottWhigham 13y ago
For #2, the 360 deal (and its variants) arose to mitigate this - http://en.wikipedia.org/wiki/360_deal http://en.wikipedia.org/wiki/360_deal For #3, I think we consume books/movies so differently that what happens in the music industry has no effect on other mediums. The biggest change since 1983, for example, is that people today have the opportunity to hear any and every song they want all day, every day without having to pay. Sure, you might need to listen to a commercial every once in a while (Spotify, Youtube, Pandora, etc) but that's okay - you aren't a "pirate" if you use those services so it's cool. And you can go about your daily life while doing so - you can listen to 8+ hours of music at work today if you want and still get your work done. That didn't happen back in 1983 - if you got to listen to music, you'd share that music with everyone else in the office and it would either be muzak (!) or a radio station. You didn't get to have these deep niches and deep preferences that Spotify/et al allow. Movies though - that requires your full attention. Can you read a book while you code? Can you watch a movie while you do your company's books? It's just too different.
- Tyrannosaurs 13y ago
  Not saying that the music industry impacts the other industries, just that there are parallels in the move to a digital world and these may be things that will apply. But yes, there are differences, but there will be similarities too.

scorcher 13y ago

This graph is pointless, revenue is not the same as profit. Sure total revenue has stayed the same but that tells you nothing about profit. One the the major increases in revenue is concerts. They are expensive and often operated at a loss to promote physical media sales

tunesmith 13y ago
The belief that touring is a panacea really cracks me up. Touring does not make money for indie musicians. Maybe for the top 1% or less, fine - there are always anecdotes - but far, far more common is the kind of tour where you save up money, sleep on couches or share a motel 6 bed with a bandmate, eat crappy food, play to mostly empty rooms to people that are turned away from you talking to their friends, for a door fee that doesn't cover your food and gas money. And that's for good musicians. The bad musicians don't tour.

k-mcgrady 13y ago

I don't think piracy has been a problem for a while. Most casual pirates transitioned to free streaming services/YouTube. The odd ranges on the x-axis also make this chart a little misleading. It's also interesting to note how revenues switching from recorded music to concerts will effect artists. Previously you could go into the studio, record an album, and sell it. You then tour behind it to promote it. Now with the money coming mostly from concerts you will have to tour a lot more. In other words revenue from concerts has gone up but it takes a lot more work to make money from concerts than recorded music.

dylandrop 13y ago

Scale of years is uneven, revenue != profit. Also, if the only thing that's countering the loss in album sales is concerts, I think we should take a look at ticket prices for concerts. I think they've grown to be ridiculously (prohibitively) expensive over the years, which is just wrong.

rootedbox 13y ago

the report doesn't seem to compensate for inflation shrug

sigzero 13y ago

What does the report say about it being ethically wrong?

crucialfelix 13y ago

Always left out of these graphs: there are more musicians than ever before, and vastly more recordings being released. Earnings at the top are higher than ever, and the tail is longer and shallower.

tunesmith 13y ago

There really are some forms of music that are better suited for recordings, as opposed to stages. People insist on conflating them by saying "It's okay that it's harder to sell recorded music - just go on tour!" when that point really doesn't make a lot of sense.

bitwize 13y ago

According to every small-time musician I've spoken to, piracy killed the indie music scene. In particular, Boston used to have a vibrant music scene that's all but dried up now, and every former musician who played that scene I've spoken to points the finger at file sharing. This is because piracy changes the economics of how the major labels behave. Before, major labels used to take risks on what they thought might be the "next big thing" in order to reap the profits when it does turn out to be popular -- and landing a major label contract, and the attendant fame and fortune, is what motivated many bands to get together and play. These days, however, if the "next big thing" is starting to show signs of catching on, that probably means its music is already pirated and all over BitTorrent, and that's like Kryptonite to a major label. So they don't sign that cool new band and the band has to make do with concert and T-shirt sales and word-of-mouth. And that may mean having to choose between your music and putting food on the table. To most musicians, your "big break" is how you make a living with your music. It also brings the quality of music down, as now the major labels will only invest in "sure bets" like Miley Cyrus, Taylor Swift, or Justin Bieber. The ones that don't get signed to major labels either take nine-to-five jobs and stop playing, or are so in love with their music that they don't mind being penniless hipsters. Most can't achieve the critical mass it takes to build a large fan base, so most people's conception of what music is is disproportionately influenced by the formulaic "sure bet" acts. So support your local musicians. Support DRM.

acuozzo 13y ago
> So support your local musicians. Yes, I will. > Support DRM. No, I won't.
skore 13y ago
Not sure if serious... Music labels have always sold what is popular, they don't care whether it's good or not, they're a business. For a while, they were quite good at it, but then they started to suck at it and then the money dried up. Now all they have left is investing in "sure bets". Filesharing simply accelerated that process and showed the underlying error more quickly. Look - Art is hard. For a little while, there was a lot of money in music. Droves of indie musicians missed that train and now they're jealous of the success of youngsters that you really shouldn't envy for a nanosecond. It's particularly sorry that they blame their fans for it. The reality is: Their music is only good enough for a little filesharing. And that's why they don't get signed. Most "good" musicians who are also reasonably popular have worked their asses off day and night for decades. Success in art is about getting the privilege to translate your innermost into something that can be shared and then seeing it resonate with people so much that they want to share it forward. Translating your innermost into art that resonates with people is frigging hard and takes years and years. Having it resonate with more and more people so you build momentum takes years and years again. Either you're with that, or don't go down that road. There is no manna raining from the sky and there is very definitely no guarantee for manna raining from the sky that is unfortunately wasted on those you think don't deserve it. That's petty and self destructive (hey, indie musicians). If you think you deserve something, but somebody else who doesn't deserve it gets it, you have a lot of soul searching to do. Especially if you're that bitter in your early twenties. As Stephen Fry said: Self Pity (as a superset of hate) will destroy everything except itself.

Tycho 13y ago

I hate this idea that concerts are this more nobel endeavor and the saviour of music. Concerts for most popular music are a low-value-add phenomenon. It's the equivalent of going to a WWE show. They usually involve childish antics which then passes as an 'amazing' concert performance. It's never really about the music, yet is considered 'authentic.'

fnbaptiste 13y ago

Not surprised at all to see the concerts line going up in this chart. The amount of money my friends and I spend on live music is getting out of hand lately, largely because mid-sized acts can now charge big prices for tickets. I like the fact that 'indie' acts now sell out shows in decent venues and can get away with charging $60+ for tickets. I think the pirating of music is making things a lot easier for those mid-sized bands to push their way into getting a decent-sized world-wide audience. I think groups like Chvrches or The Naked and Famous (both of which coming to my city in the next month, selling tickets at $60+, and likely to sell out their venues) have probably benefited a lot from the pirating of their music. I've never paid for either of their music, nor has anyone I know (in fact, I know very few people who still regularly pay for music at all), but most of my social circle are likely to go to one or both of those shows.

Schwolop 13y ago

Worst graph ever. I know! Let's do linear extrapolation from a graph with a non-linear dependent axis!