As soon as they crossed into Serbia, the map on his phone went blank.
Damon Krukowski was driving with his wife, Naomi Yang. They were two-thirds of the late-’80s indie rock band Galaxie 500, touring through Eastern Europe as a dream-pop outfit called Damon & Naomi. After years of war in the former Yugoslavia, Belgrade was still under economic sanctions, and off the grid; tech firms had no access to street maps. “We entered the noncorporate world, out of the reach of the West for political reasons,” Krukowski told me.
He had to find a pay phone and write down directions on paper, a crude throwback to the early days of touring. The venue was behind a radio station that had resisted the Milošević regime. And when Damon & Naomi took the stage and started to play, in a city severed from every method for a band to reach an audience, Krukowski realized that everyone in the room knew their songs.
“It was so moving, but it was about piracy,” he said. The Serbian radio station had downloaded Damon & Naomi’s files and broadcast them, creating a fan base. And Krukowski didn’t really have a problem with that. “Who could complain that their music had been able to reach people who had no means of purchasing it?” he asked. “It was amazing and we could play a show.”
It was the kind of story sold to millions of music acts about the global reach of the internet. In a connected world, ideas, thoughts, and yes, songs could break across borders, building audiences where none before existed. It was a dream that appealed to the do-it-yourself ethos of independent artists. They could play the music they wanted, find their own niche, and thrive. It might even change the world.
Like so many sectors of our economy, government inaction has allowed the music business to consolidate, with devastating effects on musicians.
But that promise of success soon ran into the reality of the digital age. Krukowski doesn’t indulge in that fantasy anymore. “We’re funneling more of the money in the industry to fewer and fewer hands,” he said. “It’s not designed to democratize music or make a million people a living. It’s just a handful and it’s shrinking.”
The music industry was once sprawling enough to accommodate a wide spectrum of artists. But artists today are beset on all sides by monopolists and oligopolists. Like so many sectors of our economy, government inaction has allowed the music business to consolidate, with devastating effects on musicians.
Radio is to a shocking degree in the hands of one company, Liberty Media. Two companies, Live Nation and Anschutz Entertainment Group (AEG), control a large number of venues and artist management services, with Live Nation dominating ticketing. The major labels have been whittled down to three. Record stores, alt-weeklies, and other elements that nurtured local music scenes are largely gone.
Dwarfing all that in significance is streaming, which has become the industry’s primary revenue source, despite giving a pittance to the vast majority of artists. For the main streaming companies—YouTube and Spotify—music is really a loss leader, incidental to data collection, the advertising that can be sold off that data, and the promise of audience growth to investors. “Spotify is benefiting from every single artist on the platform driving fans to them,” said Chris Castle, an entertainment attorney who used to work at A&M Records. “The labels say they give you exposure. The line is that you can die of exposure.”
This radical upending of the industry’s business model has benefited a few stars, while the middle-income artist, like so much of the middle class in America, struggles to survive. The ubiquity of digital recording tools and social media masks this pain; it feels like music is as vibrant as ever. It’s hard to discern an artist’s suffering, until they’re gone.
The pandemic has cruelly brought this home. Performers who subsisted on touring saw their livelihoods vaporized. Some quit the business; others suffered in silence. But a funny thing happened. Musicians who would pass each other on the road began to organize about how to ensure fair compensation for their work.
“We’re trying to continuously put artist needs and rights into the conversation,” said Maggie Vail, a musician, label manager for Bikini Kill Records, and board member with the Artist Rights Alliance, a coalition challenging industry consolidation. “If you don’t have healthy musicians, you don’t have a healthy industry.”
“You can go gold and still owe the record label …” –Ice-T
The notion of a music “business” is relatively new. For centuries, working musicians required patronage, either through churches or royalty or performances for the aristocracy. Mass production of sheet music in the 19th century allowed money to more broadly flow, and this expanded with Thomas Edison’s invention of the phonograph, and later Guglielmo Marconi’s radio. Musicians could record, package, and sell songs as a commodity, and earn money for more than just playing live.
A byzantine system evolved to obtain royalties for songwriters from wherever music is played—on a record, over the radio, in a movie, at a club, or a bar, or a department store, or an elevator. Performance rights organizations (PROs) collect these royalties, and distribute the money to copyright holders. A consent decree between the Justice Department and dominant PROs BMI and ASCAP, in place since the 1940s, attempts to ensure equitable royalty treatment for all artists.
But artists needed to first get their music heard. “You had thousands of stores and physical products,” said Danny Goldberg, a band manager who was the president of Atlantic Records, and later the indie label Artemis. “You had to have major distribution to get records into stores, and the front of the store instead of the back.”
HUGH D'ANDRADE
Goldberg described the record label as “the investment banker for an artist’s career.” Labels would front the costs of production and marketing, and give advances to artists against performance royalties (there are two royalties, one for songwriting and one for the underlying performance; because songwriting royalties are separate from label advances, writers and publishers make a lot more money). Some labels even provided funding for tour support. A hit record would finance speculation on other singers and bands.
From the outset, this system led to exploitation, as often is the case when art collides with commerce. Labels had a clear information advantage: They controlled the books, and defined profits and expenses. There’s a long history of crooked record deals, Black artists having their music ripped off and sold to white audiences, top bands seeing nothing beyond their advance because the label had to “recoup” costs. The first deal was always bad, and hitmakers would fight to renegotiate. But what made the marriage somewhat tolerable was the flood of money available. Records were a cash cow, and fans were continually updating their catalogs as new technologies like cassettes and compact discs rolled out. Sales increased for three decades; at the peak in the 1990s, music was a $40 billion per year industry.
Nevertheless, there was always an undercurrent of rebellion. In 1994, Pearl Jam filed suit against Ticketmaster for using its dominant position in ticketing to gouge fans. Condemnations against major labels and corporate rock flowed from the punk and alternative scenes, even if some of them signed with the majors eventually. “There was always a sub-music business underneath the ugly one,” said singer-songwriter Kristin Hersh (Throwing Muses, 50FootWave). “The underground functions when we’re allowed to pay rent and keep engaging in our passion.”
For an independent artist, the economics were narrow but understandable. Lower-cost tools allowed for professional-quality recordings in garages. You could press your own CDs and sell them above cost at shows. Independent distributors, labels, and record stores could allow for a national following. You played in your hometown and networked elsewhere, through like-minded venues and community radio and fan zines. “We had a robust industry outside of the mainstream culture,” said Maggie Vail, who spent 17 years at Kill Rock Stars, an indie label that featured Elliott Smith, Sleater-Kinney, and The Decemberists. Artists weren’t getting rich, but they could play music and pay the rent, and maybe get a big break and go national.
And then Napster came around.
“I will upload you, you can download me …” –Warren Zevon
A lot of the artists I spoke to for this story were unmoved by the early days of file sharing. They compared it to superfans taping Grateful Dead shows or songs off the radio. But some even saw its promise. “I was like, this isn’t great, but wow, we can directly distribute to our fans now,” said David Lowery, lead singer of Camper van Beethoven and later Cracker. “Maybe enough of them will pay that the net result is we get paid better as artists.”
The labels, however, flipped out, with good reason. “Digital distribution of singles and the mp3 format would unbundle the album,” said Stephen Witt, author of How Music Got Free. “Think of a song like ‘Ice Ice Baby.’ They sold 20 million albums. There were 14 other songs on the album, nobody listened to them.” You simply couldn’t get people to pay $15 for a CD anymore if the only song they wanted to listen to was available by itself.
Napster only lasted a couple of years, though imitators like LimeWire and Kazaa persevered through the 2000s. The labels sued them out of existence, but hesitated to offer an alternative to instant music downloads. Meanwhile, in 2001, Apple released the iPod. “If music piracy was the pot trade, then Apple was the vaporizer,” Witt said. The iPod had storage for 15,000 songs, but nobody owned that many. As Witt explained, “the model was, go steal everything and load it on your iPod.”
The labels, in denial for years over losing their lucrative business model, needed a solution. So they licensed per-track music sales to Apple’s iTunes Store. “iTunes looks just like Napster, but with one more column added, which was ‘99 cents,’” Damon Krukowski said. “Napster’s window was designed for piracy. It was only title, artist, and file size. iTunes added price. No credits, no information that serves the music community.”
YouTube is the largest music streaming platform in the world, accounting for 47 percent of all on- demand play time globally.
With the album unbundled, record company revenues began a 15-year slump, which filtered down to artists. The labels consolidated, seeking safety in market share. For years there was a Big Five; then Sony bought BMG and Universal bought EMI, narrowing to a Big Three that by 2016 controlled two-thirds of the music market. (Warner Music is the other.)
Recording and marketing budgets started to dip. Advances decreased. Promotional staffs were sacked. Labels invented the “360 deal,” entitling them to a share of all revenue from an artist under contract, in addition to what they could recoup from composition rights. This quickly became the industry standard. The labels compensated for the death of the album by sticking their hands in their artists’ pockets.
“I’m like a faucet, monopoly’s the object …” –The Roots
Apple’s digital distribution killed record stores, a node in any local music scene. Physical sales became a dinosaur, limited to sentimentalists and collectors. The concurrent decline of alt-weeklies, which featured music listings and interviews and show reviews, inflicted similar damage. Music-focused magazines also suffered from cutbacks. “The first thing that happened is we stopped advertising in small publications,” said Vail. “That just radiated out.”
Radio, another way to reach fans, was also transforming. The Telecommunications Act of 1996 allowed consolidation across terrestrial radio, with two big networks, Cumulus Media and Clear Channel, dominating the airwaves. Sirius and XM launched satellite radio networks in the early 2000s, and then merged with one another. In a concentrated radio landscape, formats narrowed, diverse artists couldn’t break through, and local content became nonexistent. Local stations became ghost towns; programmers in remote office buildings determined playlists, and robots replaced the DJs.
Even that level of concentration didn’t work. Cumulus and Clear Channel, now known as iHeartMedia, fell into bankruptcy. And one company picked up the pieces. Liberty Media bought SiriusXM, and then bought Pandora, an online radio company. Liberty has a one-third stake in Live Nation, the venue and ticketing giant. And in 2020, it took a controlling stake in iHeartMedia, which owns 850 AM/FM stations (more than any other company) and the nation’s largest online radio network and commercial podcast producer. They’re pushing to loosen restrictions on local radio ownership even further.
A company this vertically integrated, combining terrestrial, satellite, and online radio, streaming, artist management, ticketing, venues, and concert promotion, makes airplay an impossibility for all but a handful of artists. “At this point, it’s something I ignore as a label,” said Vail. “I’m not going to spend any time or effort pushing.”
In place of that offline network that nurtured artists was the internet, pitched as a connection point for fan discovery and artist access. There’s a kernel of truth there. Pitchfork and music blogs opened up weird genres and niche artists, and Myspace and later Facebook gave bands a home on the web. If you collected social media users, you could message them about upcoming shows and record sales. But an early shift signaled how the web would inevitably change. “Facebook did this crazy bait and switch,” Lowery said. “We built these band pages where we had access to friends. But when we posted to our page, they didn’t show it to our fans. Then we had to start paying Facebook to access our fans.”
That signaled how artists were wading into the deep end of the pool, where so much about their livelihoods would slip out of their control. “The rhetoric of the early days of the internet was triumphalist bullshit,” said Astra Taylor, a writer, filmmaker, and activist whose husband, Jeff Mangum, fronts the lo-fi rock band Neutral Milk Hotel. (Astra has occasionally played with the group.) “Nothing’s free of political economy. It was obvious to me ten years ago that something like Spotify was endgame and nothing like cultural democracy.”
And that’s exactly what happened. Chris Castle could see it coming when he caught wind of an advertisement for a rebooted version of Napster that operated as a primitive streaming service. The tagline was: Own Nothing, Have Everything. Castle recalled: “I thought right there, that’s the end.”
“Type it in, Google’s your friend bruh …” –Jay-Z
David Lowery, who now lectures at the University of Georgia in addition to making music, described the internet as reassembling all the gatekeepers that kept artists away from fair compensation. “We celebrated disintermediation, and went through a process of re-intermediation,” he said.
This started in 2005 with YouTube, a repository for virtually all recorded music, accessible to anyone with a broadband connection, for free. YouTube encouraged users to post content, and almost immediately that included songs. Before Google bought YouTube in 2006 for just $1.65 billion, it alleged that the site was “a rogue enabler of content theft.” Google estimated that over 60 percent of all YouTube views were of “premium” copyrighted material.
HUGH D'ANDRADE
Google’s investment was protected thanks to the Digital Millennium Copyright Act, Section 512, which granted a safe harbor from prosecution to tech companies whose users post copyrighted materials, as long as they institute a process of taking down infringing content when asked. But for a platform as massive as YouTube, “notice and takedown” is an exercise in futility. Five hundred hours of video are uploaded to YouTube every minute. As soon as you take one down, another pops up. “YouTube has a kind of protection scheme,” said Jon Taplin, former tour manager for Bob Dylan and The Band. “They say, ‘Record company, your content will be up here whether you like it or not.’”
YouTube does run a service called Content ID, a “digital fingerprint” that compares uploaded videos to existing copyrighted material provided by the major labels, and automatically takes down copies. But smaller artists are inexplicably barred from the Content ID system. “The rights of large creators with the resources to take [YouTube] to court on their own are protected,” reads a class action lawsuit against YouTube filed last year, “while smaller and independent creators … are deliberately left out in the cold.” The lawsuit argues that this two-tiered system should invalidate YouTube’s safe harbor. It’s still in litigation.
Though not always thought of in this fashion, YouTube is the largest music streaming platform in the world, accounting for 47 percent of all on-demand play time globally, according to the 2018 report of the International Federation of the Phonographic Industry (IFPI), a nonprofit trade group. Most of the views cycle through a continuous auto-playing stream based on a proprietary algorithm, unbundled from the album. This tends to concentrate who gets played, as YouTube serves up reliable crowd-pleasers to keep people addicted. “It becomes a winner-take-all business,” Taplin says. “You get this crowding at the bottom, people getting their mother and their girlfriend to listen to their music and that’s it.”
YouTube’s complicated and opaque payment structure changes dynamically based on various factors, including time of day, location of the listener, and ad revenues tied to the stream. But the average money that comes back to an artist can barely be calculated. An estimate from the Trichordist’s most recent Streaming Price Bible shows that YouTube’s Content ID, with songs connected mostly to the major labels, yields $0.00022 per stream. Combined with rates given to uploaders who monetize their videos, you get something closer to what Chris Castle supplied to a U.K. parliamentary committee, showing $0.00074 per stream. At that rate, 10,000 streams—that’s 10,000 different people listening to an artist’s music—translates to about $7, less than the price of one album on iTunes.
Maria Schneider is a Grammy-winning jazz and classical artist and the lead plaintiff in the YouTube lawsuit. “They pushed this discourse that it was good for artists to monetize their works by putting ads on them,” she said. “I’ve talked to people I know that are very bright people. When I tell them what the money really looks like, they’re just shocked, they have no idea.”
You can certainly view YouTube as more of a promotional consideration for live performances. The company constantly touts success stories about artists who broke through thanks to its streams. And even grizzled veterans can benefit. Stephen Witt recounted a conversation he had with Geoff Barrow of the trip-hop outfit Portishead. “He was complaining that he’d have some songs with 200 million, 300 million views on YouTube and he made $30,” Witt said. “But the next year, Portishead headlined the Glastonbury Festival. They hadn’t had an album in ten years. I said, ‘Jeff, you wouldn’t have this headline gig if YouTube wasn’t around.’”
That narrative would be easier to swallow if streaming hadn’t cut off other revenues like music sales, and if YouTube’s parent company Google wasn’t one of the most valuable and rapacious businesses on the planet. Google takes all the data collected from YouTube and agglomerates it with other information it captures, using that to target ads. Artists don’t share in their contribution to data collection; that money is generated outside their videos and sometimes off the YouTube website. But they’re responsible for attracting the eyeballs that make Google fabulously rich.
“The platforms have driven the price of content to zero,” said William Deresiewicz, author of The Death of the Artist. “This demonetized content is still generating a fortune. But the artists aren’t getting that money.”
“No one man should have all that power …” –Kanye West
Daniel Ek, co-founder and CEO of Spotify, promoted what he called an artist-friendly streaming solution. An extension of the internet radio craze of the early 2000s, Spotify would license content from record labels, and then support artists as people listened to their music. The “freemium” service requires users to either listen with ads or pay a subscription fee for ad-free streaming. Users can’t upload, avoiding piracy and guaranteeing tracking of royalties.
What made it work was having practically all the music in the world for one low price, or no price on the ad-supported tier. That meant getting the major labels on board to give up the copyrights. They agreed for one key reason: Spotify gave the majors 18 percent stock equity in the company, before its initial public offering, in exchange for streaming rights. Even Merlin, a network representing thousands of indie labels, got 1 percent equity.
Danny Goldberg related it to those old Columbia House record clubs, where consumers could get eight CDs for a penny. “These companies would pay the labels advances of $50 million at the beginning of the year,” Goldberg explained, along with a low royalty rate. But the royalty rate had to be shared with the artists; the advances did not. Similarly with Spotify, the labels minimized the royalty through a revenue-sharing deal, and maximized their share of equity, money they weren’t obligated to pass on.
HUGH D'ANDRADE
Artists had no say in this development. “There’s not as much money in ads in digital broadcasting, and the (performance) royalty is often calculated as a percentage of revenue,” said David Lowery. The songwriting royalty is a percentage of the performance royalty, so this brings the entire level down. The royalty system was designed for negotiating equitably with thousands of small radio stations, Lowery explained. “That rationale doesn’t work today. You have these huge digital monopolies.”
Spotify also pays out absurdly low per-stream rates, though not as bad as YouTube. “Last year, the COVID year, Galaxie 500 had 8.5 million streams on Spotify,” Damon Krukowski explained. “We also released a 2,000-copy, limited-edition LP. They raised the same amount of money. Neither is enough to live on.” Krukowski calculated that to earn the equivalent of a $15-an-hour living wage, a band would have to get 650,000 streams per month per band member.
The Trichordist Streaming Price Bible estimated that Spotify revenue actually went down in 2019, to $0.00348 per stream. Cellist Zoe Keating corroborated this trend by revealing her declining revenues on Twitter. “If ya’ll could listen to my music an additional 48,000 streams per month,” Keating wrote, “then I will be able to use Spotify royalties to cover the $924 per month health insurance premium for me and my son.”
Spotify and YouTube even appealed a decision to increase the “mechanical” royalty rate for songwriting, set by a government body called the Copyright Royalty Board. A federal appeals court ruled that the Copyright Royalty Board must consult streaming companies before raising rates.
Several artists, like Taylor Swift, have been angered enough by low rates and artist exploitation to take their music off Spotify. But you have to be Taylor Swift, or someone equally famous, to do that. (Even Swift, er, swiftly put her music back on the service.)
Swift is among the few big winners from Spotify, whose playlists, often focused on a mood or activity rather than a particular artist, really only pay off for the already famous. (This partially explains the strange gold rush in back catalogs, where veteran artists like Bob Dylan and Neil Young have sold their songwriting to publishing companies that expect decades of micropayments from streams.) The concept of the “infinite shelf,” where every artist would be able to find a niche fan base, never materialized. “People never go below the first page of a search engine or recommendation algorithm,” said Jon Taplin. “It’s set to give you what you like.”
Though the secret sauce of human and algorithmic playlist creation is obscure, there’s a lot of talk of payola, something that’s been tightly restricted in radio since pay-to-play DJ scandals in the 1950s. Money changing hands can push an artist up the lists, where a song is more likely to be played. The major labels own companies that create many of the playlists, pushing their established artists. Last November, Spotify announced an “artist recommendation” program that would lead to more streams for artists who accepted a lower “promotional” royalty rate. Federal payola rules do not apply to streaming.
While artists struggle, Daniel Ek has gotten rich off their boundless creativity. Spotify had 345 million monthly active users at the end of 2020 (a 27 percent annual increase), and 155 million paid subscribers. The company pays 70 percent of all revenue out to artists, and it has almost never turned a profit, but according to Castle, that’s not the goal. He has assembled what he calls the “COVID Misery Index,” a selection of tech stocks whose prices have soared as people stay home. Spotify has outperformed Facebook, Amazon, Apple, Netflix, and Google between January 2020 and January 2021, reaching a market cap of $57.65 billion. Ek owns 9 percent of the shares (but through a special mechanism, 37 percent of the voting shares) and had a net worth at the end of February of $5.3 billion.
Musicians, despite supplying virtually all the value for Spotify, share in none of that value. Ek could deposit some of those billions into accounts of the artists that keep Spotify successful, but that’s not on the table. “Daniel Ek says he’s the savior of the music business,” Castle said. “I think the music business is the savior of Daniel Ek.”
If Spotify released the data of who streamed music to the artists, then they could at least use it for direct marketing or planning tour schedules. They could share in the data’s value. But that’s all hidden. “Maybe you find out you have 25 people listening to your music in Seattle, but you don’t know who they are,” said Maria Schneider. “Musicians are underwriting this streaming experiment and it’s not working.”
Perhaps most distressing of all, Spotify has changed how we listen to music, and maybe even what gets made. Albums used to be taken home and savored, played with headphones on, free from distractions. The ubiquitous stream is more background noise, one device among many screaming for attention.
The pressures of being noticed above the din overtake the instincts of the musician, diminishing it to the level of fast food or fast fashion. Hooks must be simpler and more immediate within the song, to prevent skipping ahead. Hastily produced pop or dance music that grabs the listener gets foregrounded. And the beast must be constantly fed with newer tracks, working at Spotify speed to constantly attract notice. Ek himself counseled this in an interview last year, warning artists, “You can’t record music once every three to four years and think that’s going to be enough.” It’s the attention economy, embedded in the songs.
“Daniel Ek says if you want to make more money, make more music,” Schneider said. “Make it cheaper and shorter and make more. It’s antithetical to artistry. It’s the death of creative music.”
“I need a dollar, dollar, dollar that’s what I need …” –Aloe Blacc
In a little over a decade, streaming has swallowed the music industry. Though total industry revenue has finally begun to increase, streaming now accounts for 83 percent of all recorded income in the U.S., according to the most recent report from the Recording Industry Association of America. Soundtracks for movies and television, radio play, physical products, and everything else sits in that other 17 percent. Streaming even killed iTunes; last year, digital music downloads returned less revenue than vinyl.
“Spotify is not a music company, YouTube is not a music company. None of them need me, but I need them.” –Damon Kukowski, Galaxie 500, Damon & Naomi
This has severed the traditional relationship between musicians and commerce. Artists used to rely on labels, and while that could get antagonistic, the labels still needed hit music to stay alive. “Apple stepped in, if they abandoned music tomorrow, it wouldn’t change their bottom line,” said Damon Krukowski. “They’re not a music company, Spotify is not a music company, YouTube is not a music company. None of them need me, but I need them. That is unsustainable for music.”
Indeed, Spotify appears to be pushing away from music by becoming a podcasting juggernaut. Reduced music listening on Spotify reduces royalties. Recently, Spotify shut down a live jazz performance podcast that had permission from artists, songwriters, and labels to play their music. Spotify told the podcasters, “Regardless of the licensing status of the music, our podcast service is not intended to be a music distribution tool.”
While there were options before for staying outside the mainstream, which is now the stream, those have narrowed. “Think of the indie music movement of the 1990s as an anti-monopoly moment,” said Kevin Erickson, director of the Future of Music Coalition, an advocacy group for musicians. “We’re seeing now the limitations of that approach. In 1996, you could put out your own record and go around major labels, put it in stores, have a little mail-order business. You can’t go around Spotify. The dominant businesses have too much market power.”
Some artists have figured out how to make it work, through a digital-age throwback to the old patronage system. Back in the late 1990s, rocker Todd Rundgren created “PatroNet,” a subscription-based service that delivered unreleased tracks and works in progress to fans. PatroNet didn’t last long, and Rundgren is now on Spotify. But the model lives on.
In 2007, Kristin Hersh helped launch CASH (Coalition of Artists and Stakeholders) Music, a nonprofit that offered free tools for artists to manage digital distribution and merchandising, with open-source, customizable software. Hersh set up a subscription service, where members received album releases, downloads, and guest list passes for concerts, in exchange for a suggested fee. At the highest level of $5,000 a year, subscribers could get visits with Hersh in the studio and an executive producer credit on her albums.
CASH Music folded, unable to sustain funding. But Hersh still uses the direct-to-consumer model, now named Strange Angels. “Strange Angel listener-supporters treat me like a human because I treat them like humans and we lose no self-respect in our engagement,” she told me over e-mail. “They pay my studio costs and I give them free music. I don’t know any true musicians or songwriters for whom this isn’t the dream.”
HUGH D'ANDRADE
The slightly more corporate version of this is Bandcamp, a kind of virtual underground record store for fans, and a way to directly support artists. Bandcamp claims that between 80 and 85 percent of everything sold on its website—from vinyl to downloads to concert tickets to T-shirts—goes directly to creators, with payouts on a daily basis. As of the end of February, this had generated $684 million for artists since its inception in 2007. The more they make, the more Bandcamp makes, so the interests are aligned.
Artists retain the data on their fans at Bandcamp, and can choose what to charge for music. Damon & Naomi records are free on the site, with an option to pay. “Our income went up when we lifted the prices on our downloads,” Krukowski told me. “People are really decent. Nobody has cornered the market treating people as decent, but you can make a living that way.”
Rock group Kings of Leon innovated even further, becoming the first to release an album as a non-fungible token (NFT), a cryptocurrency bundled with digital art and concert tickets. The NFT can be collected and traded, while giving direct proceeds to the artists.
Some musicians doubt these are scalable solutions for anyone without a built-in audience, or for session players who rely on appearance fees, or songwriters who used to make their year by having a credit on a hit record, which has gone away as the album unbundled. Plus, the economics of these crowdfunding sites are fragile. PledgeMusic, a British-based service, went dark in 2019 and fell into bankruptcy, leaving artists owed thousands of dollars.
Marc Ribot, a guitarist who has played with Tom Waits and Elvis Costello, doubts that these direct-to-consumer sites are much more than a Band-Aid. “The same neoliberals in anarchist drag boosting indie labels in the ’90s are now boosting Bandcamp,” he said. “I love Bandcamp. I love the food co-op too. They’ve been around since the 1930s, they’re 3 percent of the market, will never be any bigger.”
The patronage model, Ribot argued, is really a tipping model for musicians, which isn’t sustainable. “If you go to Bandcamp and pay, that’s great,” he said. “But we don’t need voluntary charity. We need to either tear the whole thing down and create real socialism where I get an apartment for my good looks, or a functioning market.”
“I just can’t wait to get on the road again …” –Willie Nelson
After a century or so of living off recorded music, the economics of the business has returned musical artists to their original state as troubadours, with touring making up the bulk of their income. Where touring was previously done to promote records, now records are made to support the tour. The multi-billion-dollar industry of selling studio-recorded music is now a sidelight. The phrase “gig economy” was derived from musicians playing a gig. Now musicians have gone back to being gig workers.
But concentrated power exists in touring as well. Live Nation and AEG control a substantial number of stages and venues in the U.S. They are also the two biggest concert promoters and artist management companies in the world, and control most of the nation’s biggest music festivals.
Live Nation added to their market power with the 2010 merger with Ticketmaster, which still boggles the mind, since Ticketmaster was already a notorious monopolist that artists and fans loathed. Ticketmaster controls 80 percent of the ticketing market, and a 2018 Government Accountability Office report found that ancillary fees attached to every sale total out to 27 percent of the face value of a ticket. About half of Live Nation’s total revenue has historically come from these overages.
The 200 venues and 500 major artists that Live Nation manages give them leverage to make Ticketmaster the exclusive broker for those sites and musical acts. It took AEG, the only other big player in the space, to complain about this anti-competitive behavior, which violated the Justice Department’s consent decree from when they approved the merger. However, that led only to a slap-on-the-wrist modification of that consent decree. Ticketmaster was also recently fined $10 million for hacking into a competitor’s computer systems, in a scheme to collect intelligence and limit its business.
A united front of artists could prove key to raising public sympathies against exploitation and toward basic fairness.
The Live Nation/AEG duopoly also funnels revenue to the top: 60 percent of worldwide concert revenue went to the top 1 percent of performers in 2017. But even given that reality, independent venues and artists still had a means to earn a living. “2020 was going to be everybody’s best year,” said Audrey Fix Schaefer, whose company manages the 9:30 Club and other venues in Washington, D.C. “It’s the thirst for live entertainment, the thirst for community.”
And then the pandemic hit, and the live music industry vanished overnight. A year later, it still hasn’t come back. Marc Ribot archly notes that Live Nation waited until a few hours after the U.N. announced a global pandemic to cancel tours. This triggered force majeure clauses in the contracts so Live Nation didn’t have to pay artists for the postponed shows.
In a sense it was a final blow, the capper for an industry that seemingly reconstructed itself over the past 20 years to screw over the working-class musician. “They said you don’t make money on records, you can tour,” Ribot said. “Now the people who produced that music are literally starving. I lost friends, I’m sure everybody did.”
Ribot told me about a COVID-related survey, which found that 71 percent of the musicians and DJs who responded had lost over three-quarters of their income. “That’s over twice the rate of average unemployment during the Great Depression,” he said. The hardest-hit were not the up-and-coming artists trying to break through, but the musical middle class, those who had worked consistently enough to make music their sole profession.
There’s almost been a conspiracy of silence about it. “The music business is about stories,” said Maggie Vail. “You don’t want to tell people you’re not doing as well. People would say, ‘I don’t want to talk about it.’” But the pandemic eliminated the one piece of the business monopolists couldn’t fully take away—the live show. Vail told me about her friend Sean Tillmann, a songwriter who records under the alter ego Har Mar Superstar. “He became a mailman,” she said. “He said, ‘It’s a good union job and I’ll do this until my industry comes back.’”
Live Nation has not had such worries. Despite not hosting a live show in a year, the company’s stock exceeded pre-pandemic highs this January, and only has grown since then. Live Nation has done about 1,000 ticketed live-stream concerts, and has planned to cut artist payouts for 2021 shows by 20 percent. But many fear that investors expect the company to capitalize on diminished competition after vaccinations proceed, either through attrition or through a mass buying spree. “The fear is you have imperiled small businesses and the big guys see an opportunity to scoop everything up,” said Erickson.
In an earnings call in February, Live Nation said it had $2 billion in “total liquidity” that it could use to make a series of acquisitions. CEO Michael Rapino told market analysts, “We will be aggressive on a bolt-on, continued consolidation path while we are able to.”
But after seeing income dip, opportunities slashed, live concerts shutter, and careers threatened, musicians finally recognized that all they had left was each other.
“Come together, right now, over me …” –The Beatles
Music organizing has always been difficult because the workers are so segregated, always out on the road, never in communication with one another. The pandemic changed that; people were stuck in quarantine, with a moment to contemplate the rotten deal they were getting for their creative output.
Damon Krukowski explained to me how he and some friends started a weekly Zoom meeting, discussing various issues in the industry, comparing notes on contracts, streaming rates, and other issues. Out of those calls originated the Union of Musicians and Allied Workers (UMAW). More than 1,000 music workers have been involved with the group and its various subcommittees. UMAW mobilized for expanded unemployment during the pandemic, and they have expressed solidarity over progressive issues like Medicare for All and the Green New Deal. But the overarching goal is to change the current state of the music industry.
The Justice at Spotify campaign is a first step. Over 27,000 musicians have signed the petition, which demands at least a one-cent payment per stream, public disclosure of all licensing deals, an end to digital payola, and full credits on all streamed recordings. “Spotify should be fighting for the artists who built it, instead of further undercutting our economic well-being,” the petition reads.
So far, Spotify has ignored UMAW. “They’re stonewalling because they don’t think they need to listen to musicians,” Krukowski said. “We want a seat at the table. I really believe we’re going to get it.”
Marc Ribot and Olympia Kazi, an activist who had gotten New York City’s onerous cabaret law repealed, co-founded another group, the Music Workers Alliance. Like many pandemic-era organizing efforts, MWA concerned itself first with mutual aid for struggling artists. But while better streaming royalties, an end to copyright infringement, and basic fairness in the digital marketplace are on MWA’s agenda, they’re also concerned about working conditions at live venues, minimum pay rates, protections against discrimination and harassment, and a piece of any live-streaming club revenue. An initial rally was held in Manhattan in February.
“I went on a nonconsensual strike and I’m alive, it makes me a little braver,” Ribot said. “It’s more militant than I’ve ever seen. It’s no accident that the CIO started in the 1930s in the middle of the Depression.”
The Future of Music Coalition and the Artist Rights Alliance, two older organizations, helped win a $100-a-week “mixed earner” boost for artists who get artificially low benefits benefits due to non-employee income playing music. Both groups have dialed in on corporate power as a huge barrier to a healthy music industry. “Anti-monopoly has always been a thread running through the work, but it’s more central now,” said Kevin Erickson, who worked at college radio stations and music venues before directing FMC.
Perhaps the biggest victory for independent music workers was the Save Our Stages legislation, organized by a brand new coalition. After the pandemic struck, Audrey Fix Schaefer of the 9:30 Club got a call from Dayna Frank, owner of First Avenue in Minneapolis. “She said, ‘You’re in D.C., do you know a lobbyist, we have to lobby for federal aid,’” Schaefer recalled. “Of course I thought that was ludicrous, so I said ‘When can we start?’” A week later, the National Independent Venue Association had 500 members, and now it’s up to 3,000, in every state.
Everyone knew the stakes: secure funding, or see a mass collapse of independent venues. Nearly all workers have been furloughed, and 90 percent of the membership said they would not reopen if new funding didn’t come through. Schaefer said that hundreds of clubs are unlikely to ever reopen, including storied jazz venues.
NIVA motivated fans to contact Congress, sparking two million emails. At the same time, it ran fundraisers online that brought in $3 million. Last December, Save Our Stages finally passed, with $15 billion for venues of all kinds, from music clubs to movie houses to museums. “Most everyone else who tries to get laws passed, it takes six, seven years,” said Schaefer. But within nine months, NIVA had secured the biggest federal funding for the arts in U.S. history. Since it was established in 1965, the National Endowment for the Arts has collectively only received a little more than one-third of Save Our Stages.
That points to one option to save music creators. Author William Deresiewicz points out that public funding for the arts in America is about $4 per person, including a program in Minnesota that devotes a portion of its sales tax to arts and culture. Annual U.S. government support for the arts comes in at less than the budget of a Mission: Impossible film. “In Europe, as a percentage of GDP, it’s like 63 times higher,” Deresiewicz said. It’s no accident that Sweden has an outsized number of recording stars given its size, because of its massive investment in the arts.
Beyond direct funding, an artist has space to work when there’s a generous enough society to allow for risk-taking, from health care as a human right and cheap housing and basic social services. Creativity flourishes amid security. The New Deal’s Works Progress Administration Federal Art Project gave artists a living wage in exchange for producing art regularly. An offshoot, the Federal Music Project, employed composers and musicians to perform thousands of concerts and music festivals. This spirit could be summoned again.
But funding for the arts has been a longtime issue. Music worker organizing is relatively new, especially at this level. It remains to be seen whether movement building from all stakeholders, from musicians to fans, will be able to force platform monopolies to give creators just compensation. But the winds are shifting in Washington around Big Tech, and a united front of artists could prove key to raising public sympathies against exploitation and toward basic fairness.
Artists would rather think of themselves as outside the system. “The wonderful thing about the DIY vision is also its weakness,” Astra Taylor noted. But the system has come for them, and toppled the structures that allowed them to create. Everyone loves music, and most of us now have the capacity to listen to anything, anywhere, at any time. We can’t hear through the noise that the people who brought us this musical bounty are in trouble.
“I’ve been relatively fortunate in my career,” said Marc Ribot. “I got to work with great people. But one thing I think about at every moment is, if I can feel the water at my navel, it’s going to be over a lot of people’s heads.”
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