Off the Charts: Examining Musicians’ Income from Sound Recordings
To music industry experts and musicians reading this, a lot of what is included in this report is probably no surprise, since many of you are living it every day. But the reason that we conducted the Artist Revenue Streams work was not to reveal some explosive findings or to come up with some sweeping conclusions, it was to capture a rich snapshot of musicians’ earning capacity now so that we are able to more accurately measure change in years to come.
Based on the data collected through interviews and the Money from Music survey, we propose three broad takeaways about income from sound recordings:
- For many musicians, the income derived from sound recordings is a small part of their overall revenue pie, and it’s decreasing. In aggregate, 88% of survey respondents derived between 0% and 10% of their music-related income from sound recordings in the past 12 months. Respondents who identified themselves as composers and/or recording artists were making a bit more, as were rock and hip hop musicians, but even when examined through various lenses like role or genre, income from sound recordings hovered under 15% of music-related income. Though differences exist by role and/or genre, the survey data suggests that income from sound recordings is a modest slice of most musicians’ income pies – a sentiment also expressed by a number of interviewees.
- The sources of income from sound recordings are shifting. In the Artist Revenue Streams project, we asked specific questions about a number of sound recording-related income streams. The data suggests that income from physical retail sales has been shifting down and that sales at shows holding steady, while income from digital sales, on-demand streaming, synchs and digital performance royalties have been shifting up. But it’s important to note that the survey data can only indicate the direction of change, not the dollar value of change. As one survey respondent so aptly noted, the fact that his income from digital sales was moving in a positive direction does not mean that the income derived from digital sales was greater than that previously earned from physical sales.
- Technology has had a significant impact – both good and bad – on the sound recording landscape. Clearly, the traditional mechanisms for selling sound recordings have been severely impacted by unauthorized filesharing. Piracy has not only cut deeply into the retail sales marketplace, it has also impacted the value of music, and the prices that musicians can charge for recordings. But, technology has also led to growth in licensed digital platforms, and given individual musicians the ability to experiment with bundling options and variable pricing in ways that would have been nearly impossible 15 years ago. And, emerging technologies have led to the development of new revenue streams – digital performance royalties, in particular – which is steadily becoming a noticeable source of income for an increasing number of recording artists.
The goal of the Artist Revenue Streams project is to document musicians’ sources of income in 2010-2011. To really measure changes in musicians’ earning from sound recordings, and from which specific revenue streams, we would need to replicate this study in two to five years. For now, we have some benchmarking numbers, and a general sense of the role that income from sound recordings plays for US-based musicians.
The data suggests it’s an income stream of varying relevance, depending on a number of factors. For some musicians, income from sound recordings is not applicable, because it’s simply not part of their career composition. For others, it is one revenue stream of many. And for others still, income from sound recordings is a shifting puzzle. Faced with the challenges of near ubiquity of recorded music (with almost all of it available for free on the internet), they are using any means possible – technological and otherwise – to extract value from their work. Some musicians have become the largest vendor of their own music, selling CDs off the merch table after performances. Others are pressing limited edition vinyl, or bundling digital sales with t-shirt purchases, or trying variable pricing to super-serve their fan base.
As is the case with many parts of this digital transition, musicians’ experiences are unique, and there is no one-size-fits-all solution. Sound recordings are valuable for many musicians, serving as an artifact of creativity that can not only earn money, but be used to leverage other income sources, from live performance money, to merchandise, radio airplay, and synchs. Sound recordings will remain an important part of the ecosystem for years to come; what will likely change is the delivery mechanisms, the licensing structures, and the pricing.
We encourage you to take a deeper look at the findings, and at our future releases where we will continue the conversation about how musicians and composers’ revenue streams are changing in the 21st century.