Death of the Musical Long Tail

MIdiAFigure5

MIdiAFigure5

An intriguing piece about the growing disparity of recorded music revenue popped up a couple days ago at the Music Industry Blog.  The post is based on a consulting report, The Death of the Long Tail: The Superstar Music Economy, which is available for free to subscribers to the blog. The blog describes the music recording revenue climate, which has been dropping for some time as we know from all the news about how music labels are failing:

The 21st century decline in recorded music revenues continues to send shockwaves throughout the music industry and although there are encouraging signs of digital-driven growth, the impact on artists is less straightforward.  Total global artist income from recorded music in 2013 was $2.8 billion, down from $3.8 billion in 2000 but up slightly on 2012.  Meanwhile artists’ share of total income grew from 14% in 2000 to 17% in 2013.  But the story is far from uniform across the artist community.

What’s interesting is that the total income growth to artists is skewed towards Pop Superstars (and realize that this is a growing share of an increasingly smaller pie).

The music industry is a Superstar economy, that is to say a very small share of the total artists and works account for a disproportionately large share of all revenues.  This is not a Pareto’s Law type 80/20 distribution but something much more dramatic: the top 1% account for 77% of all artist recorded music income.

This shouldn’t be surprising, recall that I mentioned in my Pop Music Industry and the Cost Disease post a paper by Connolly and Krueger called Rockonomics: The Economics of Popular Music, that this growing disparity towards Superstars has been noticed for live concert revenue since at least the early 80s.

In 1982, the top 1% of artists took in 26% of concert revenue; in 2003 that figure was 56%.  By contrast, the top 1% of income tax filers in the U.S. garnered “just”14.6% of adjusted gross income in 1998 (see Piketty and Saez, 2003). The top 5% of revenue generators took in 62% of concert revenue in 1982 and 84% in 2003. Surely, this is a market where superstars receive the lion’s share of the income. (pp. 19-20)

For musicians in the recording and live market, the revenue has always been skewed towards the Superstars, and increasingly so.

In her doctoral dissertation, Chamber music in alternative venues in the 21st-century U.S.: Investigating the effect of new venues on concert culture, programming and the business of Classical Music, Sarah May Robinson describes the revenue for the clubbing circuit at which Classical Musicians are increasingly performing:

For some ensembles, club performances can match their concert hall fees.  Sascha Jacobsen said that if the Musical Art Quintet had a well ‐ paid club performance  “we get paid 1,500 to 2,000 (dollars and) that’s pretty much comparable to a regular  concert series.” In general he says club and bar performance income “varies a lot but it’s  pretty comparable, actually” to concert hall and museum series income for the  ensemble. Filling a large club venue, which might produce this kind of fee, is not  something the quintet can do every week, however. “It’s not easy to make what you  need for the month by only working in alternative venues,” said Premawardhana.

Revenue for individual musicians also depends on the number of performers at  an event. A solo cellist can make $400  during an hour set with a crowd of 40 in the back  room of Barbès .  Members of a quartet playing for the same crowd in the same space  would only earn $100 each.  Events that rely on a large number of performers , like the  chamber jams at the Revolution Cafe , provide little or no income to performers in most  cases. At the Revolution Cafe, the organization’s cut of the bar income generally  amounts to around $100, according to former cafe manager, Joe Lewis. 237 Donations  average between $15 0 to  300 according to Premawardhana.  The resulting $250 to  $ 400  is split among the musicians that play over the course of 3  hours, which often includes  several  chamber groups. Premawardhana said payment is “usually between $20 and $40  a player depending on how much they play.”  At Opera on Tap Los Angeles, per concert 80 income ranges from $120 to 380 and is generally used to pay the accompanist while  singers volunteer .  Revenue from many Classical Revolution PDX events goes to fund the  organization, since splitting the income among the musicians would provide them with  only a nominal fee.

This is, frankly, pretty discouraging. I would have thought that in the time that I’ve started playing clubs well over ten years ago, the revenue would be greater than this. More discouraging in that Sarah is discussing larger music markets on the coasts–and what’s happening currently–while I was able to generate this kind of income in the Midwest ten years ago.

Even while I was playing clubs in the late 90s and early 00s, the local pop musicians were already talking about how the money was better “back in the day”–this almost invariably referred to pre-1995.  Clubs were fewer, pay was better, there wasn’t as much competition from DJs and Karaoke machines. In other words, local musicians have noticed a breakdown of their revenue streams from over 20 years ago, and as we can see from the growing disparity above, it is only accelerating.

I think what this shows is that, just as we have this tendency to overestimate the decline of Classical Music by focusing on a few failing institutions, we also tend to overestimate the health and sustainability of popular music due to the focus on a few Superstars who do happen to be doing well. Most of my blog posts in the past about revenue made by popular local acts had been to focus on this over-reliance on a biased sample for Crisis talk.  Some of my recent posts have focused on the over-reliance on knowledge about a few failing institutions to describe the whole field of Classical Music.

Maybe it’s time to revisit what Douglas Dempster said well over ten years ago:

But the studies reviewed here make it perfectly clear that critics have, perhaps in a spate of millennial fever, greatly exaggerated the demise of classical music at the end of the 20th century. Even worse, however, they have witnessed very complex trends in the culture of classical music and reduced them to the morally simplistic calculus of “rise” and “decline.” Musical and cultural critics misinterpret economic, demographic, and technological changes affecting the world of classical music as signaling some spiritual decay in the culture of classical music itself. The audience for classical music is not withering, but technological, sociological, and economic forces are reshaping that audience in important ways.

About these ads

8 thoughts on “Death of the Musical Long Tail

    • I imagine what happened is that the economic activity in the long tail just finally got noticed, and probably got blown out of proportion. Really, isn’t how a lot of fads happen anyway?

      I imagine also that with the ability to self-produce recordings, the report might be underestimating actual releases being sold (or at least actual units).

      • Yeah … there’s also the issue that while most of the money goes to the superstars, most of the expenses associated with the industry are also theirs. You’ve talked about that before in detail. It’s almost like a Ponzi scheme, where the means of creating money then sucks the money up faster than it can be created. It’s yet more evidence that being a soloist by any means possible is the best way to go … That’s almost the only kind of creature that can survive in the ecosystems located deep in the “long tail.”

      • Right! It’s really jsut the Cost Disease at work since so much of what happens in entertainment industries is labor that can’t be automated. And in those instances where it can be automated, it’s usually not the artists that make the majority of the money but the big businesses which have invested in the products.

        The superstar effect is really no different than the movie blockbuster effect. The biggest costs/investements could lead to the biggest returns, but that’s also where the biggest risks are–and individual artists just don’t have the means to invest in that level–hence the usage of industry capital to fund movies, albums, concert tours.

        Individual artists invariably have to start at much more modest levels, and should probably (indeed, have to) focus on slow growth–if luck is with them, that is!

  1. Jon, sometimes I wish that I had the appetite for risk of a typical entrepreneur, or just a rich husband or elder relative. I can write, I can notate, I can play, I like to travel (within reason), I have no kids or husband, I am a soloist, I play the perfect instrument for self-production, I can do graphic arts well, and I am a publicity/communications person by day. I also have a head like a rock. Put that all together, and it is the perfect recipe for a self-publishing musician, with the fatal exception that financial risk puts me into emotional anaphylaxis.

    • It’s not for everyone–and hell, like we were talking about on Facebook–most of us full-timers aren’t spending nearly as much time making music as we’d like to either since we’re always hustling for gigs!

      Sometimes I almost think that if I spent my time only playing/performing, it might drive me crazy!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s