Wednesday, October 17, 2007

What if...We are Destroying the Music Industry?

Who doesn't want something for nothing? Who doesn't want to get whatever they can for free? Everyone knows that everyone else is trying to do the same thing they are, get something for nothing. But since I was little, I've been told that nothing is free.

Somewhere in the chain of command and economics, your free item costs someone else and in turn costs you something.

This same concept holds true for the music industry. In my last post, I was talking about the music industry and the shift, that many artists are beginning to make, away from recording labels. This shift, however, was dependent on that fact that the artists were still rewarded for their hard work on albums through song purchases on services like iTunes, Napster, Amazon and Real.

With the news yesterday that iTunes was dropping prices on DRM-free music, I began to think that with no limits on the way songs are controlled and used by users, what will happen? As people are creating more and more services that allow users to share content legally through loop holes like BitTorrent and the hundreds of online file sharing services, we see a decline in album and song purchases.

It makes sense right? One person buys a CD or online album/song, shares it with their friends or other users on their service who in turn share it with their friends and so on. Pay It Forward anyone?

The issue arises when artists realize they are losing a lot of money because only a few people are actually buying their songs, yet everyone is listening to them. Concert numbers stay high or rise further because they are still getting the exposure, but albums sales are down. Is this going to be an issue for artists? It's obviously not at the moment, but it may become one shortly.

Is a there a lesson to be learned here? Buy your music or use services that reimburse artists for the work that they do.

Anyone thing I'm wrong? PROVE IT!

Link up, subscribe, leave comments and enjoy!

Have a great day!

2 comments:

gregstrander said...

"Concert numbers stay high or rise further because they are still getting the exposure, but albums sales are down. Is this going to be an issue for artists? It's obviously not at the moment, but it may become one shortly."

I admire you're well written article, but I do disagree with you. While yes, artists may lose some money in cd sales, their fan base grows, and if you have good music, it will grow fast and become huge, and as you stated, concert sales rise, which, is where most of the money comes from. Let's say a band does a nation wide tour, with at least 2 stops in every state, that's 98 shows if it's continental. Concert ticket sales vary quite a bit, but on average I'd say they're about $40 a piece. Venue's also vary, but I'll round down and say you get 1000 a piece if you're a rather large artist, or even 300 if you're smaller or the venue is smaller. So, using the figures I just stated, the venue will gross from $12,000 to $40,000. That's not including merch, but I won't figure that in anyway, even though that's probably a few thousand more. So let's say the artist probably makes 1/10 of that, after you figure the venue cut, all the roadies/stage hands, the label and whatever other costs there are. For one tour for one album at 98 shows, they're taking home $117,600 to $392,000. Now, those aren't extremely accurate figures, but still, even if the artist made half of what the smallest figure I mentioned was, for maybe 6 months of touring, they're not doing too bad for themselves, and that would be a rather small artists. I didn't even bother with these groups that sell out 20,000 tickets for one show. I just can't really feel sorry for these people. They're not losing money, they're just not making an obscene amount anymore. Boohoo.

Mag22 said...

Great comment! I will agree with 100% on that one. That is what I like to see!