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#1
http://derekwebb.tumblr.com/post/13503899950/giving-it-away-how-free-music-makes-more-than-sense
Quote by Derek Webb
On Twitter, I recently said, “I make more money giving records away on @NoiseTrade (in exchange for info) than selling those same records on iTunes (let alone Spotify),” which resulted in some pretty interesting discussions. I said that in response to questions I received after criticizing streaming services like Spotify, which claim to offer a viable alternative to “piracy,” when in reality they offer artists almost no meaningful revenue or fan connection. And while iTunes is certainly a better financial model and more equitable for artists, it does almost nothing to connect the fans to the artists in a way that yields any long-term benefit.

For example, I am paid $0.00029 per stream of a song on Spotify, and even this amount depends on whether the song is being streamed by a paid user or someone using the service for free. This means it will take upwards of 3,500 streams of a single song on Spotify to earn $1.00 versus that same revenue for one iTunes song purchase (not to mention the fact that Spotify refuses to pay the same amount to independent artists as they pay major labels, unlike iTunes).

Most would argue that it’s apples and oranges (no pun intended): iTunes is a digital storefront for artists while services like Spotify are about discovery. People will argue that low-cost streaming is good for the market, that it’s good for the artists, and that it’s still better than people taking your music for free from BitTorrent. But I tend to disagree on almost every point, mainly because it’s just not that simple. It’s true that iTunes is a place for people to purchase music, but it offers all the same benefits of Spotify in terms of discovery. And while Spotify is claiming to occupy the discovery space, it’s clear that the service is operating functionally as a storefront, since people are streaming music as an alternative to purchasing that same music.

I’ll go even further to say that I actually prefer illegal downloading over Spotify because when you get music illegally it’s at least implicit in the transaction that what you’re doing is potentially harmful to the artist. But with Spotify, your conscience is clear because you’re either enduring ads or paying to use the service and access the music. But from the blue-collar artist’s perspective, they’re not receiving any meaningful payment (there’s little discernible difference between $0.00029 and $0.00) and they are learning nothing about their fans, not to mention that music readily available on Spotify for little to no payment completely poaches the record sales upon which middle-class musicians are depending for survival (which is why I will withhold any new releases from Spotify in the future).

But this is about much more than just revenue, which brings me to why neither iTunes nor Spotify can really compete with free music, in either relational or monetary value.

If someone buys my music on iTunes, Amazon, or in a record store (remember those?), let alone streams it on Spotify, it’s all short-term money. That might be the last interaction I have with that particular fan. But if I give that fan the same record for free in exchange for a connection (an e-mail and a zip code), I can make that same money, if not double or triple that amount, over time. And “over time” is key, since the ultimate career success is sustainability. Longevity. See, the reality is that out of a $10 iTunes album sale, I probably net around a dollar. So if I give that record away, and as a result am able to get that fan out to a concert (I can use their zip code to specifically promote my shows in their area), I make approximately $10 back, and twice that if they visit the merch table. I can sell them an older/newer album and make approximately $10 back. The point is, if I can find some organic way to creatively engage them in a paid follow-up transaction, I increase my revenue 10 times on any one of these interactions.

This is all an equation of scale. I might be able to outright sell 20,000 albums for $10 each (again, netting around $1 each). Or I can remove any barrier from someone hearing about or discovering my music by giving it away, which will result in an order of magnitude more albums distributed, maybe around 100,000. If I can then convert 20% of those free downloads into paid transactions of any kind over time, I have probably well over doubled or tripled my money. And I can do this repeatedly as I continue to grow, and learn more about and invest in my tribe, to whom I now have a direct connection (rather than having to go through Facebook, Twitter, or Lord forbid, MySpace to access them).

And all of this by giving the music away for free.


it actually makes a bit of sense considering that most of the actual artist's profit comes from doing shows and such
#4
Quote by CaptainCanti

it actually makes a bit of sense considering that most of the actual artist's profit comes from doing shows and such

It's time to drop this conception like it's the bread-n-butter of pop musicians. Unless the artist already has a very substantial following, the cost of touring/performing yields almost 0 net revenue.

Giving away free music can be a strategy for certain artists, but I think the main thing people need to understand is that there is no silver bullet to the problem of dwindling revenue for content creators in general. You can't just say "musicians just need to tour more and they'll make more money." It's not that simple, and is rarely true.

Spotify in concept is a very promising business model and answer to today's digital environment in which quantity is no longer relevant. In Spotify's case, the issue is economy of scale. If an overwhelming number of the population, for example, paid a negligible subscription fee (let's say $2-5) a month, Spotify would be able to pay a lot more and distribute the cumulative revenue in a more sustainable way. Currently that is not the case so it is a pretty rough period in which the artist has the most to lose.
#6
I hate how your stupid location stretches your 'personal info' side-bar, and thus condenses your post. I'm not going to read that now.
#7
Ya know I think it is hard for us as musicians to make money primarily through album or music record sales. It is important to use the records we have as leverage for other ways of income, such as: touring, teaching, live performances, etc... but it is important to know when to give the cd away for free and when to sell it.
#8
At what point in time did anyone other than the very successful bands/artists ever make a good living at music?
#9
If you're spending:

-$9000 to record an album (which is the norm, but my band is recording/editing/mixing/mastering our album ourselves and spending $1000 to record just the drums)
-$700+ for manufacturing
-$400+ for artwork
-$70-$200 on posters
-$50 on poster artwork
-$40-$75 for promo photography
-Upwards of $300 for a cheap music video
-Banner $150, Stickers $70

You're going to need some friggin financial support. We're not breaking even making our album. The posters themselves eat up the money we get from shows. You can only sell so many tickets to the same people. If we only had music as a job, we'd be dead in a month.

It's like asking a painter, an actor, or a dancer to work for free. Of course what they do has to be of actual value. It's not like some amateur making a picture in MS Paint or some hipster recording himself playing a ukulele cover. We're oversaturated in that shit. HOURS, IMAGINATION, and FEELING have to be in there for there to be any worth.

If we keep giving away music we'll severely limit how good modern music can be, and eventually kill off all the people who deserve to be making it.
#10
I recently had a short conversation with a Grammy winning, platinum selling guitar player about how bands make money on the road, and he basically told me that even at his level, they barely break even on most tours, and they have to work their asses off just to do that. Granted, he's not in the same band that garnered him Grammy ' s and platinum selling albums anymore, but the idea remains the same: bands don't make money touring anymore. And they obviously don't make anything on album sales.
I still totally want to do it, but it isn't a profitable way of living.
#12
It is important to stay positive about touring. Many jazz and classical artists make their living by that and are doing good.
#13
Quote by deadsmileyface
paying for music is dumb



Yes. So is paying for a painting. Or a piece of glass artwork. In fact, paying anybody who has dedicated years of their lives to practicing and perfecting a craft which brings themselves and other people happiness is ridiculous. Just let them starve or get real jobs.
#14
Quote by MeGaDeth2314
Yes. So is paying for a painting. Or a piece of glass artwork. In fact, paying anybody who has dedicated years of their lives to practicing and perfecting a craft which brings themselves and other people happiness is ridiculous. Just let them starve or get real jobs.


https://www.youtube.com/watch?v=QiMK2JVymWw
#15
i listen to a lot of broke bands who don't bother charging for downloading their stuff off bandcamp because they know barely anyone will bother with it and most are in that whole anti-establishment-ish free music, "but when we tour buy some merch so we can eat", leaning.

i always give them a few quid cause I have disposable income.


I went to one band's show the other day who I had donated £5 for their album they were giving free download on and they had cds with them and were like "uh how much are cds worth *derp* " and I just smiled and shoved a tenner into their hand.


as far as I can tell "noisetrade" is the same sort of thing but for bigger bands though. maybe it works out more profitable as we move to an age where being the mega rich musician isn't the expected thing any more and all the cost from record labels cuts disappear and the traditional expense from distribution and promotion are negligible things with the use of the internet. trend has been going this way for a while but I'm still not sure if it yet works out financially for popular musicians.
#16
Quote by theguitarist

i always give them a few quid cause I have disposable income.



i made music one time and put it on da interwebz.


quid plz
#19
Quote by slapsymcdougal
How did giving the music away work for U2?

Very well, as they got a nice lump sum off Apple for the favour.
#20
Quote by MeGaDeth2314
Yes. So is paying for a painting. Or a piece of glass artwork. In fact, paying anybody who has dedicated years of their lives to practicing and perfecting a craft which brings themselves and other people happiness is ridiculous. Just let them starve or get real jobs.

exactly
#22
Quote by MeGaDeth2314
Yes. So is paying for a painting. Or a piece of glass artwork. In fact, paying anybody who has dedicated years of their lives to practicing and perfecting a craft which brings themselves and other people happiness is ridiculous. Just let them starve or get real jobs.


The problem comes with the medium that "work" is done in, and how that medium is placed or viewed in our society.

Imagine someone who manages to create this "super apple seed", which creates the most perfect, most delicious apple ever. He spend his whole life perfecting his craft, and now decided to start selling these apples to make a profit.
However, after he started selling the apples, people used the seeds of it and planted their own "super apple trees", and got their own apples off it. Now they stopped buying the super apples from this dude, and so this dude is angry.

Is this dude justified in being angry? People are "pirating" his apples by using the seeds "illegally" to plant their own super apple trees, instead of buying the apples straight from the dude. This dude dedicated years in perfecting the super apple, he deserves credit for his work.

But....would you really say that people taking seeds off an apple and planting them is ridiculous? In the medium of "how plants and fruit as a source as a food work", planting apple seeds to create apple trees is basic stuff. It's very easy for people to do so, and if it weren't for the fact that it means that the dude who created the super apple seed will starve to death, you wouldn't bat an eye.
So who's in the right here, who's in the wrong? Would you advocate for apple police tearing down every super apple tree they see, breaking and entering into people's homes to check if they are growing illegal apple trees?


Something similar (note "similar", not exactly) happens with music. For instance, in music, I can just get a guitar and play a song from a famous artist out in the street for a crowd. It's as "basic" as planting an apple tree. Yet in our world, me doing that, without paying royalties to the creator of the song (and their record label), would be immoral.

It's not as easy "the creator of the work doesn't get paid, therefore you are an immoral demon". It's more of an issue that the system doesn't really work, specially based on the medium that supports it.
Last edited by gonzaw at Nov 17, 2014,
#23
Quote by gonzaw

Something similar (note "similar", not exactly) happens with music. For instance, in music, I can just get a guitar and play a song from a famous artist out in the street for a crowd. It's as "basic" as planting an apple tree. Yet in our world, me doing that, without paying royalties to the creator of the song (and their record label), would be immoral.

It's not as easy "the creator of the work doesn't get paid, therefore you are an immoral demon". It's more of an issue that the system doesn't really work, specially based on the medium that supports it.



Okay...not sure how this really relates to what I said.


I made no mention of morality in my post. What is moral or immoral is irrelevant to the point I was making, which was that paying for music is not stupid because it supports someone who worked hard to accomplish a goal which enriches other peoples lives.

Not saying that all musicians work hard and make good music which they deserve to be paid for, but that is a different story altogether.
Last edited by MeGaDeth2314 at Nov 17, 2014,
#24
Quote by MeGaDeth2314
Okay...not sure how this really relates to what I said.


I made no mention of morality in my post. What is moral or immoral is irrelevant to the point I was making, which was that paying for music is not stupid because it supports someone who worked hard to accomplish a goal which enriches other peoples lives.

Not saying that all musicians work hard and make good music which they deserve to be paid for, but that is a different story altogether.


Your post implied that not paying for music implies the artist that creates that music will starve to death. And that also implies it being immoral (i.e letting someone starve to death is immoral).
Maybe I read too much into it. Even so, just disregard my post as a response to yours, and take it as a standalone.
#25
Quote by RGallagherFan
If we keep giving away music we'll severely limit how good modern music can be, and eventually kill off all the people who deserve to be making it.
Or perhaps it will kill off the people who make the same generic music for profit and what will remain is the musicians who are passionate about making and sharing their music without sacrificing their artistic integrity in order to appeal to a pop audience and generate the largest amount of revenue. Of course the production quality will go down, but there would be more diversity and fewer people releasing music overall so those who do would get more exposure. This could be the best thing to happen to music in forever.
#26
isn't putting your music on spotify practically giving it away anyway? or has that since changed?
#27
Quote by Banjocal
isn't putting your music on spotify practically giving it away anyway? or has that since changed?

spotify pays you like a fraction of a cent for each time your song is streamed
#28
Quote by JackWhiteIsButts
Or perhaps it will kill off the people who make the same generic music for profit and what will remain is the musicians who are passionate about making and sharing their music without sacrificing their artistic integrity in order to appeal to a pop audience and generate the largest amount of revenue. Of course the production quality will go down, but there would be more diversity and fewer people releasing music overall so those who do would get more exposure. This could be the best thing to happen to music in forever.



How do you think those passionate musicians are going to be able to afford to be able to put on shows and travel to different cities to play for their fans if no one is paying them?
#29
There wouldn't be any live performances, who needs them. Or they'd do a kickstarter campaign and their fans could pledge them the money required to go on tour in exchange for tickets.
#30
A similar problem occurs with software. You have people pirating software out there, like illegally downloading Windows or whatever.
On the other hand, you have people developing "open source" software, which is completely free. Yet the people developing these still get paid. They get paid by bigger corporations that also have different products they could sell, or companies that sell "support" for that software, or others.

Something similar could happen with music. Make it so artists release their songs completely free of charge, and allow people to play them anywhere they like, however they want (but still respecting an "open source music" licence). These artists should be paid by bigger organizations that benefit from so much music being free for everybody. Maybe a company that ONLY makes money from touring, presentations, etc, and they hire the artists to create music so they can tour and stuff.
Or maybe the artists could get paid by schools, universities, and such to teach there, and play there, or whatever.

I mean, there could be alternatives you can seek out. Not saying they will work though
#31
Quote by JackWhiteIsButts
There wouldn't be any live performances, who needs them. Or they'd do a kickstarter campaign and their fans could pledge them the money required to go on tour in exchange for tickets.





Good lord, I hope this was not a serious post.
#33
Quote by Xiaoxi
It's time to drop this conception like it's the bread-n-butter of pop musicians. Unless the artist already has a very substantial following, the cost of touring/performing yields almost 0 net revenue.



Glad someone realizes it. When one factors in good, gas, gear, crew, etc, tours are really not at all lucrative. They're more about gaining a following than making money. And if the following is a bunch of idiots that say "lol they make their money from touring" then the band is in trouble.
#34
Quote by gonzaw
The problem comes with the medium that "work" is done in, and how that medium is placed or viewed in our society.

Imagine someone who manages to create this "super apple seed", which creates the most perfect, most delicious apple ever. He spend his whole life perfecting his craft, and now decided to start selling these apples to make a profit.
However, after he started selling the apples, people used the seeds of it and planted their own "super apple trees", and got their own apples off it. Now they stopped buying the super apples from this dude, and so this dude is angry.

Is this dude justified in being angry? People are "pirating" his apples by using the seeds "illegally" to plant their own super apple trees, instead of buying the apples straight from the dude. This dude dedicated years in perfecting the super apple, he deserves credit for his work.

But....would you really say that people taking seeds off an apple and planting them is ridiculous? In the medium of "how plants and fruit as a source as a food work", planting apple seeds to create apple trees is basic stuff. It's very easy for people to do so, and if it weren't for the fact that it means that the dude who created the super apple seed will starve to death, you wouldn't bat an eye.
So who's in the right here, who's in the wrong? Would you advocate for apple police tearing down every super apple tree they see, breaking and entering into people's homes to check if they are growing illegal apple trees?


Something similar (note "similar", not exactly) happens with music. For instance, in music, I can just get a guitar and play a song from a famous artist out in the street for a crowd. It's as "basic" as planting an apple tree. Yet in our world, me doing that, without paying royalties to the creator of the song (and their record label), would be immoral.

It's not as easy "the creator of the work doesn't get paid, therefore you are an immoral demon". It's more of an issue that the system doesn't really work, specially based on the medium that supports it.

true
#35
Quote by JackWhiteIsButts
Or perhaps it will kill off the people who make the same generic music for profit and what will remain is the musicians who are passionate about making and sharing their music without sacrificing their artistic integrity in order to appeal to a pop audience and generate the largest amount of revenue. Of course the production quality will go down, but there would be more diversity and fewer people releasing music overall so those who do would get more exposure. This could be the best thing to happen to music in forever.

yeah that's a possibility... but considering pop stars still get millions invested in them and still make a lot of money with merch and live shows I'm not too convinced the "manufactured" artists are going anywhere. Sadly.

I don't think there would be fewer people releasing music if what you said happened though, since it's still quite a popular/fun thing to do. Nobody releasing music these days is making any money for it, and there are still thousands of albums being released every day regardless of it.
#36
Has anyone addressed why it might not be a good idea because labels wouldn't make any money? Musicians want to make and play music, they don't want to do all of the extra promotion, marketing, and distribution. From my understanding, a good chunk of labels' money is album sales, how would this work?
#37
A band of 4 people only need about 11,000 fans spending a net £6 (i.e. profit after costs) per year on the band for each member to not have to work a day job.

11,000 out of 7 billion is 0.0016% of the planet's population, roughly 1 in every 6400 people.

Not impossible, but difficult...
#38
Quote by Xiaoxi
It's time to drop this conception like it's the bread-n-butter of pop musicians. Unless the artist already has a very substantial following, the cost of touring/performing yields almost 0 net revenue.

Giving away free music can be a strategy for certain artists, but I think the main thing people need to understand is that there is no silver bullet to the problem of dwindling revenue for content creators in general. You can't just say "musicians just need to tour more and they'll make more money." It's not that simple, and is rarely true.

Spotify in concept is a very promising business model and answer to today's digital environment in which quantity is no longer relevant. In Spotify's case, the issue is economy of scale. If an overwhelming number of the population, for example, paid a negligible subscription fee (let's say $2-5) a month, Spotify would be able to pay a lot more and distribute the cumulative revenue in a more sustainable way. Currently that is not the case so it is a pretty rough period in which the artist has the most to lose.


For pop musicians of a certain size, touring and mechandising is going to make a huge amount of money. However if you're a mid level rock band or whatever, touring and merch is barely going to make ends meet. There's a Vice article here about loads of big UK rock bands still having day jobs:

http://noisey.vice.com/en_uk/blog/our-favourite-bands-and-their-day-jobs

Plus some bands are killed by too much touring.

Anywhere, there's pros and cons to online music and piracy. Without piracy, bands would make a lot more money from their record sales, however without it their music might be a huge niche, very hard to get a hold of so they wouldn't have the fans to book tours in the first place and out of the day job and being a local band.
Last edited by EndTheRapture51 at Nov 18, 2014,
#39
Quote by The Judist
A band of 4 people only need about 11,000 fans spending a net £6 (i.e. profit after costs) per year on the band for each member to not have to work a day job.

11,000 out of 7 billion is 0.0016% of the planet's population, roughly 1 in every 6400 people.

Not impossible, but difficult...


11,000 x £6 = £66,000

/4 = £16,500 a year. That's not a high paying salary, and once studio and marketing costs come out of that you're probably looking at dropping into a tiny salary.
#40
Quote by EndTheRapture51
11,000 x £6 = £66,000

/4 = £16,500 a year. That's not a high paying salary, and once studio and marketing costs come out of that you're probably looking at dropping into a tiny salary.

He said the figures were after costs, so studio and marketing are already 'accounted' for.

Though as already mentioned, those figures don't appear to be supported by anything except wishful thinking.
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