Photo: Paul Yeung/Bloomberg/Getty Images
Music Revenue: Where The Money Comes From & Where It Goes
"How can we expect a music industry revenue boom if the musicians making the music aren't earning a livable wage?" –Conversations In Advocacy #58
Things are looking up in the music business, depending on who you ask... In a recent piece, Pitchfork highlighted positive projections by several financial institutions of a $25 billion in revenue by 2023, booming to $41 billion by 2030 – all of this compared to last year's revenue of just over $19 billion.
But what do these lofty industry numbers mean for musicians themselves? Where will all that money come from and, more importantly for the working musician, where will it go?
The report pulls figures from an enlightening 2018 survey conducted by the Music Industry Research Association and the Princeton University Survey Research Center, in partnership with MusiCares, the Recording Academy's very own health and human services charitable organization. One particular graphic breaks down the sources and reveals the reality of what a typical musician earns each year.
But according to the report, streaming royalties account for just $100 of income each year for the typical American musician. Streaming revenue, both from increased paying subscribers and from projected international expansion, plays a huge role in the expected boom. This turns out to be good news for record labels, as streaming offers them a higher return on their dollar than previous formats.
According to a Deutsche Bank report on the music industry from earlier this year cited by Pitchfork, "for every $100 of consumer spending on CDs or vinyl, a label’s profit is $8; for every $100 spent on iTunes downloads, it’s $9; and for every $100 spent on streaming, a label’s profit is $13."
How does a songwriter make a living from his/her craft in the streaming age?
In celebration of #WorldIPDay, we spoke with songwriter, producer and keyboardist @SamBarsh about this topic.https://t.co/F8SYgRcrFI
— GRAMMY Advocacy (@GRAMMYAdvocacy) 26 de abril de 2019
But one look at the breakdown of musician income streams above reveals how much work is left to be done. Even the top income source listed, live performance, is a deflating number. As Pitchfork puts it, "For everyday professional musicians, live shows were the most common source of income in 2017; the median amount earned was just $5,427. Most survey respondents said they don’t earn enough from music to cover their living expenses."
How can an industry be expected to boom if those creating its product aren't earning a livable wage? These projected numbers might create optimism for labels and the industry at large, but should also underscore the urgency to support music creators with fair compensation for their work, wherever the money is coming from.
And it's worth mentioning one very conspicuous place the money isn't coming from: radio. In fact, radio does not even register as a revenue bucket as they still don't pay artist royalties for the recordings they broadcast. As we'll see below, these unpaid royalties would go a long way toward fair compensation to music makers for their work and allowing them to make a livable wage. The Recording Academy continues to lead the charge to change this antiquated and unfair omission of due revenue via its ongoing Advocacy efforts in Washington.
— GRAMMY Advocacy (@GRAMMYAdvocacy) June 21, 2018
The numbers don't lie. Despite the explosive growth of streaming, the system in place doesn't even come close to providing a sustainable living for artists to create music, record and tour. How can an industry celebrate a return-to-form financially without acknowledging and compensating the music creators who fuel it?