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.