The digital revolution has brought about the age of the DIY musician, or as Sonicbids.com founder Panos Panay calls it, the “artistic middle class.” With technology, artists are able to produce and distribute their work easily while maintaining creative control. But big record labels, despite their floundering, still appear to be the way for an artist to go from anonymity to platinum-selling success. So how is this middle-class musician Panay speaks of making money and supporting his or her craft?
Traditionally, artists have had several income streams. These include income from record sales, live performances, performance/mechanical royalties, songs used in television or film, merchandising, and endorsement deals, just to name a few. But it can be difficult for an independent musician to access some of these streams without the help of a well-established label.
New business models are springing up all over the Web to help independent musicians get revenue from their music. The Future of Music Coalition recently highlighted some of these in its “Music 2.0” series at the 2009 FMC Policy Summit:
- Internet radio. Internet radio, which is seeing an increase in listenership, plays more artists in more niche genres than traditional radio would ever be able to. Last.fm and Pandora both stream independent music and pay royalties to performers and songwriters.
- Fan sponsorship and patronage. New online services such as ArtistShare and Kickstarter help artists raise money to fund projects and underwrite some of their expenses. Fans can donate money to their favorite artist through these sites and get access to part of the recording process, such as a songwriting session. Depending on the amount donated, incentives for fans can include everything from a free download to getting executive producer credit on a CD.
- Corporate sponsorship. Recently Gap, Coke, Burger King, Converse, Jeep and Jansport have all posted listings on Sonicbids looking for independent bands and artists to sponsor. The site’s founder, Panos Panay, thinks this is because brands realize today’s young consumers are more skeptical when it comes to traditional advertising and seem to connect most with the authenticity associated with independent artists.
It’s an exciting time to be a musician. There are new income opportunities on the Web, though the examples above will most likely be supplemental income streams for most musicians and not a significant source of revenue. For the artistic middle class — like any middle class — vertical mobility can be difficult. Hopefully this won’t always be the case.
Kelly Manix is a graduate student at the University of Washington in the Master of Communication in Digital Media program. She is an independent musician and music marketer. Her EP, Emerald City, was released this fall.
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9 Comments, Comment or Ping
casey
Hi Kelly,
Thanks for the informative post. You might also be interested in this “reverse-engineered” new business models piece at the Future of Music Coalition website. It’s by Brian McTear of Weathervane Music Group, and it describes real-world ways in which artists can directly support musicians.
http://futureofmusic.org/blog/2009/10/29/how-actively-support-music-you-love-–-brian-mctear-weathervane-music
Stay tuned for more from FMC on artist revenue streams in the digital age. . .
Nov 5th, 2009
Katy Balatero
I’m interested to see how things will play out after the launch of Google’s new music feature last week. Google has partnered with sites like Lala, Pandora, iLike, Imeem, and Rhapsody to aid fans in music discovery — perhaps this might direct some traffic away from iTunes and give artists a boost they might not have seen before?
Nov 5th, 2009
Priti
Hi Kelly,
Great article. Just wondering what your take is on things like corporate sponsorship? Also, do you think that musicians perceive their audience in a different way because of the internet? Are more turning to niche rather than mass marketing?
Like you mentioned, it’s a very exciting time for muscians. Hopefully it’ll will allow for more artists freedom as well.
Nov 7th, 2009
Holly Wood
This really is a great article! You address a lot of the important issues going on in the industry right now. It will be interesting to see what will happen to the big record labels as more artists learn how to do-it-themselves. If big record labels disappear, will all artists then become ‘independent’? Interesting to think about.
Nov 8th, 2009
Xurxo
One of the big problems that any kind of independent music has suffered is how difficult it was to actually listen the music of the groups you could read about in blogs, newspapers or music magazines.
Both Lala, Imeen, Pandora or Last.fm are doing a great job, making it possible to reach this small projects.
In Europe a similar project, Spotify, is doing a great job in three different aspects:
a) It provides a better user experience, specially thanks to the easy creation and sharing of user lists, that can even be updated automatically.
b) Their music library is simply gigantic, so you don’t have to switch from one web service to another in order to change the music style you want to hear. Not only have reached agreements with the bigger companies (you can hear with CD quality up to 40 different Duke Ellington records from Columbia Legacy) but also have put a lot of stress in small independent labels.
c) There is a paid version and another free with audio ads, as a regular radio. In Spain most of this ads were by independent artists –so I guess they are cheap– that wanted to present their new record in front of an audience that probably doesn’t know them.
Xx
Nov 10th, 2009
MFranco
The Internet, along with the numerous applications and services, provides musicians with so much more opportunity than before. There is little doubt that things are changing, innovation is already clearly on its way.
Music labels and recording studios used to hold so much more power because the technology was not accessible to many people. Plus, the marketing and promotion efforts that are so vital to musicians getting their music heard was expensive and limited. But with the Internet and other technologies, opportunities seem to be out there for anyone with the talent. For example, Creative Allies (http://www.creativeallies.com/) is a website that will soon launch, giving musicians and their fans a network to work together on various things like posters, t-shirts, videos, etc.
What I find to be so interesting is this: How will rights management and protection look a decade or two from now? Music rights has always been a very segmented area of law with copyrights, recording rights and performing rights. I suspect that it may very well be the same structure, but there may be a chance it changes since its current structure was a direct result from the industry structure that was. There is definitely an opportunity for rights consolidation.
Here is an article about the (potential) changes coming in the music industry:
http://www.physorg.com/news170743952.html
Nov 11th, 2009
Dean Hudson
Hi Kelly,
Exciting times to be sure, but I’d like to step back for a second and play the role of Devil’s Advocate.
First, while it’s true that there are more possible income streams for independent artists than ever before, it’s a bit distressing that the revenue generated by most of these streams is exceedingly small. In the case of on-demand streams rates can be as low as a tenth of cent to be divided between the owner of the master and the owner of the publishing.
Also, while corporate sponsorship may offer an artist significantly more pay than the newest wave of streaming services, it doesn’t seem to offer much opportunity the way of true community and/or brand building. It seems like it’d be awful hard to get out from beneath a brand as giant as Coke; building your own identity seems less likely than being subsumed by Coca Cola’s identity in such a case.
An approach to music marketing that I think is particularly interesting is the “1000 True Fans” idea, which is basically built around the idea of building a ravenous core community that can support your work:
http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php
Along those lines, some artists are making very good money packaging their music elaborately and selling direct-to-fan. Topspin Media provides tools to artists that are built around this idea:
http://www.topspinmedia.com/
One thing that does seem to be happening with the adoption of ad-based streaming services, however, is a reduction in the overall amount of music piracy–it seems that the easier it becomes to preview/listen to music legally the less likely folks are to pirate that music. So these services may actually directly competing with piracy rather than CD sales.
There’s an article in this week’s Economist to this effect; definitely worth reading!
Cheers, and thanks for the great post,
Dean.
Nov 16th, 2009
justin
This is exactly right with the internet it is so easy for artist to upload, market, sell, and track their music. One thing that is still very important is that you have your music properly mastered so your music is holds up against other music. http://www.jwmastering.com is offering some great mastering prices for analog or digital mastering.
Dec 8th, 2009
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