It’s no secret that independent musicians are struggling out there.  There are some out there you have heard of, and some you haven’t heard of, working incredibly hard to get their artistic expressions out in front of audiences.  A lot of times, that grind can start to look pretty bleak and exhausting if you are moving through it without any plan or strategy.

The old joke goes that only a musician would put a $1000 guitar into a $500 car to go earn $25 at a gig.  The economics of the music business are tough, not just for live performance revenues, but especially so for the revenue that artists can earn from the sales and streams of their recordings.

It’s been a tough road for the last twenty years, to say the least.

The forces at work against independent musicians are many.  Mass audiences crave convenience over all else and have embraced streaming services, regardless of the degradation of sound quality that streaming services provide. There is an absolute flood of music being posted for free on SoundCloud and similar websites that can blind the audience by providing too much choice – yes, there is such a thing.

Despite the drawbacks of streaming services, some artists view streaming as an avenue to building an audience. Shawn Cav, a bassist and composer, weighed in on the subject.

“Streaming has really changed the music industry, not all of it is good or bad, but it does help the smaller names get their music out to the masses easier,” Cav noted. “People are also more inclined to click on an album and check it out, versus take a chance of spending $9.99 on an album they end up not being very into. Streaming eliminates the risk and invites listeners to take a chance on something they aren’t familiar with, which is a huge perk to all the original artists in the world.”

According to statistics from the Recording Industry of America (RIAA), sales volumes from all physical formats – vinyl, CDs, and cassettes – peaked at more than 1,000,000,000 units in 1999.  Then, the wheels came off and sales declined precipitously, all the way down to 200,000,000 units in 2015, roughly one-fifth of the peak year. Napster, file sharing, and the beginning of file streaming transformed the industry in ways that most independent artists have come to intensely dislike.

In terms of dollars generated, the story is a bit different. While the sales of units has decreased significantly over the last twenty years, revenue has been on the upswing. How can this be?

In 2017, the RIAA reported that the US Music Industry generated a total of $8.7 Billion.  Over half of that (65% to be precise) was generated from streaming revenues from paid music subscriptions to services such as Apple Music, Spotify, Pandora, Sirius XM, and ad-supported on demand streaming services such as YouTube and Vevo.

A recent article on CNET.com touted that “US Music subscriptions equal the entire population of Canada now.” First, exactly what the population size of Canada has to do with anything as a metric is a mystery. Secondly, the approach to assessing the health of the music industry by looking at the number of streaming subscriptions is misguided. Not one sentence in the article addresses what percentage of that streaming revenue goes to the artists who created the works in the first place. The untold story here is that the net of the gross sales proceeds that goes to the artists is miniscule.

In any commercial transaction, or when assessing the financial health of any business, the gross is a one metric to examine, but the story is really told in the net. If Spotify earns $20 from the streams of my music, but I only receive $1, that’s a great deal for the gatekeeper – in this case, Spotify – and a terrible deal for me.

Vinyl is the real story here. People are clearly going back to physical product. While sales of all formats (CDs, digital downloads, etc.) has declined and continues to decline, the RIAA reports that vinyl sales in 2017 were actually up 10% over prior year, with a total sales volume of $395,000,000.  That is the one bright spot for artists that want to earn money from the sales of their music.

Bryan Tuk is a writer, attorney and musician.  His recent book: risk, create, change: a survival guide for startups and creators, is available on Amazon and blurb.com.  You can find out more about Bryan’s writings and music at http://thehouseoftuk.com.

His law practice represents clients throughout Pennsylvania and New Jersey and focuses on arts & entertainment law matters, copyrights, trademarks, nonprofit organizations, startups and entrepreneurs.  You can learn about Bryan’s law practice at http://tuklaw.com.