Saturday, 5 September 2009

Why it doesn't pay to be a musician.

Back before the summer... well, my holiday at least... I watched the debate on Internet Filesharing on Al Jazeera between Christian Engström (Piratpartiets MEP) and Richard Gibbs, an American composer supporting artists rights.

Watching the debate about the impact of filesharing on the music industry I was struck that really the whole subject is missing the point. Filesharing isn't why it's hard for artists to make a living...

I was reminded of it again tonight reading the comments on the Guardian article linked in my last piece. Someone there opined that we will look back on the last 50 years as the golden age for popular music. And the thing is, they could be right.....

There are some fundamental facts about recorded music that mean that it will be increasingly hard to make a living out of recordings.... which boil down to that old favourite, supply and demand.

There are today millions of recorded tunes. Each year there are tens of thousands of new ones. The costs of creating a recording are dropping. The rate of new recordings are increasing. Recordings don't go away.

What does this mean? Supply is BIG.... and growing. The number of artists competing for income grows and grows - and even if an artist retires their recordings are still there competing for the customer's attention. Consumers on the other hand don't have endless pockets - there's only so much they are going to spend on recorded music.

And you want to release a record and make it big? That's really not a healthy market to be trying to take your share of..... not least since oversupply will inevitably lead to lower prices.

Now... if you sell cars you get rid of last years' model when you start selling your new one. As we see though that doesn't really happen in the music business. Not any more at least. Record labels have had a grip on distribution and production and previously have been able to restrict the artists reaching the market by not making new pressings of their back catalogs. This makes a natural restriction on the range of artists in the market at any time. But that has all changed. Digital techniques mean back catalogs are now just as accessible and marketable as the latest artists.

Ten years ago an artist's recordings competed with all the other music that was in current release. Today you have to compete with every record that has ever been released. Doesn't that sound like things are much tougher than they used to be? For the artists...

How do things look over at the record company?

Well.... if we look at all that music you can reckon that `BIG slice of consumer spending is going to go on old recordings... simply because there are so many of them. So, if you are sitting on a big back catalog this is great news... a bigger catalog translates to a bigger market share and more revenues. No new recording costs and very little investment needed in promotion and marketing.. Is it a surprise that they have lobbied so hard for copyright extensions?

Making back catalogs available does though have consequences even if you run a recording company. If releasing older tracks takes a bigger share of the market - which seems intuitive, but I've not yet tried checking in the figures - then new recordings are fighting for a smaller share of the pie. Returns for record companies are lower and risks are higher - and that too is not good news for artists looking to hook a contract (if you need to these days?).

So.... don't give up the day job.

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