Ever since recorded music became the primary way people were exposed to the art, musicians have had a love-hate relationship with recording companies. They love the idea of someone believing in them enough to fund their ability to make music for a living. Then they see how much they’re receiving compared to the record company. And, while there are exceptions (e.g. superstar acts where everyone’s getting rich), that love often turns sour. The record companies directly effect how much musicians make.
Where the Record Company Fits In
Why and how has the relationship between artist and recording company changed over the decades? It requires looking at larger firms that don’t need any particular artist. These are the labels that can treat the vast majority of artists as disposable if they’re not willing to play by the rules. And that means talking about how much artists make directly off their work.
The answer is: not much. Not in the past, and not in the present.
According to RIAA data, a band only receives about 13% of an album’s sales as royalties. From that, over one-quarter goes to the band’s support: personal manager, business manager, lawyer, and producer. This means that for every $1,000 in music sold, the band makes less than $100. If they received a $10,000 advance—which is not much for a four-person band—they’ll need to sell over $100,000 in music to pay it back. That equals around ten thousand albums. Even before the days of heavy streaming, artists needed a hit song to reach ten thousand albums quickly. And it almost certainly took longer than the advance would have lasted.
Thus, in the era stretching from vinyl through cassettes and CDs, artists frequently struggled to make ends meet, even when they were fairly popular. Solo artists fared a little better, with only one person receiving the royalties, but bands were in a tough spot. With the above percentages, the members of a four-person band would make $25 or less for every $1,000 in music sold. Popularity helped with touring income, but for anyone that hadn’t hit it huge, life could easily become a grind. Artists were almost universally at the mercy of recording companies for exposure. Thus, they had little choice but to take the best deal available or give up the dream.
How Online Sales Change the Game
Today, the ease of sharing music online gives some artists the ability to sidestep the recording industry’s abuses. Many have used YouTube to pull in some advertising money and build awareness of their art. Lindsey Stirling, for example, built a following for three years before appearing on America’s Got Talent. However, the goal for most artists is to outgrow a YouTube channel. And, winning broader audiences requires a presence on worldwide streaming platforms like Pandora and Spotify.
Streaming has the benefit of making one’s music more widely available than at any time in history. However, no correlated effect of the artist getting paid through streaming exists. Pharrell’s “Happy” earned him Grammy nominations and numerous opportunities to put his music to work. However, despite the song being streamed over forty-three million times on Pandora, he made a grand total of $2,700 in royalties from the service. Performance rights payments most likely boosted this number to around $25,000. But that is still quite low for such a massive hit. Even Sony/ATV CEO Marty Bandier said it’s a “totally unacceptable situation.”
Money But Not Music
Musicians no longer make money through their art. In fact, a 2012 Rolling Stone article listed “Nine Ways Musicians Actually Make Money Today.” The ways include fashion lines, perfume, investing, and being a talk-show band. The first three have nothing to do with music. Thus, they require that an artist already be so recognized that they can sell non-music-related merchandise off their names. The last seems like great work if you can get it, but there are perhaps a half-dozen talk shows running at any given time. Some of the ideas are good—selling shirts and other band merch and licensing music to various outlets have been mainstays of musician income for decades. Yet, the number of ways even superstar artists can make money that outstrips their music revenue speaks to the difficulty of making a living through music alone.
In short, the recording and distribution industries control music income. Whether by offering paltry percentages of album sales or a barely-existent percentage on streaming, industries dominate musicians’ incomes. Successful exceptions exist; Immortal Technique, for example, remained fully independent for much of his career. He preferred to do shows, burn his own CDs, and sell them himself to maintain the full profit. It was a good idea for him—he could make the same money with one-tenth of the sales. But, even then, he benefited from growing up in Harlem and being both familiar with and immersed in New York City. It’s never been easy to be a professional musician. If the present day has changed anything, it’s simply the number of paths down which an artist can struggle, not the struggle itself.