“It’s a long way to the top if you wanna rock ‘n’ roll,” belted out Bon Scott 47 years ago. While many things have changed since the hazy days of the 70s, the hard-nosed nature of the music business is not one of them.
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In 2021 alone, electronic music luminary Four Tet found his albums pulled from streaming platforms after contractual disputes with his former label, Domino Records; Taylor Swift took the extraordinary step of re-recording her own back-catalogue in an effort to reclaim ownership; and multiple artists began calling for a boycott of Spotify due to the CEO’s investments in AI weapons systems.
The music industry has never been a simple place. But new, disruptive technologies and rapidly evolving business models make building a successful career trickier than ever.
One of the biggest problems facing the industry right now is money. Artists have been fighting for a bigger slice of the pie since the early days of recorded music, but the recent dominance of streaming platforms has brought the issue into sharper focus.
The dramatic shift to streaming platforms has seen the income that artists derive from royalties plummet. It’s now estimated that artists earn an average of $0.01 per stream and need to achieve one million monthly streams to pocket a living wage. This is especially troublesome considering that a significant amount of money is being made from streaming; it’s just not finding its way to the majority of music makers.
The industry’s global revenue went up by over 54 per cent between 2014 and 2020, so why isn’t this growth in streaming revenue finding its way to artists? The heart of the problem lies in how streaming royalties are calculated. Most major labels currently class streaming as a ‘sale’, the same as selling a physical single or album. This classification results in a much lower royalty percentage for artists than what they’d get from a rental or broadcast.
Advocates for change will quickly point out that streaming works very differently from physical sales; most platforms work on a subscription model, and users don’t truly ‘own’ copies of the music they’re listening to. Furthermore, the widespread use of curated playlists brings streaming platforms ever closer in line with a traditional radio broadcast.
And then there’s how the platforms themselves pay out royalties. Big players like Spotify and Apple Music use a ‘revenue share’ model, where user subscription fees are bundled together and then paid out to record labels based on how many plays their artists accumulated. This approach is heavily weighted towards the biggest fish in the pond, and if you pay a subscription but only listen to obscure math rock bands, then most of your subscription fee is probably going into Beyoncé’s bank account and not to the artists you actually listened to.
High profile spats between artists and labels have drawn a line under the royalty issue, and governments are slowly beginning to weigh in. But while change may be on the horizon, many artists are still locked into outdated contracts that were drawn up before streaming platforms were invented.
Despite the current paradigm, it’s important to remember that the technology of digital reproduction and distribution can be immensely empowering.
Those looking to self-release music now face a much lower cost of entry than the days when vinyl pressings or CD runs were obligatory. Platforms like Bandcamp have enabled a generation of indie musicians to sell directly to fans worldwide, and streaming platforms like Soundcloud and Audius are pushing more equitable royalty models that benefit emerging and mid-level artists.
Tech-savvy music makers are increasingly drawn to the rapidly evolving world of crypto and NFTs as a path to sustainable careers. Enter producer Daniel Allan who, after a casual suggestion at a friend’s backyard concert, decided to test the waters selling his music as NFTs on Catalog in April 2021.
“I put up my first NFT at 9 am,” Allan tells MusicTech. “Then at 5 pm, I sold the song for 1 ETH, which was like $3,500 at the time. That moment fundamentally changed the trajectory of the rest of the year.”
From that auspicious beginning, Allan began building a community. His Discord server became a virtual workshop where songs could be demoed and tweaked with real-time feedback from fans. He’s gone on to crowdfund his new album to the tune of 140,000 USD (or 50 ETH) while retaining both artistic control and a whopping 50 per cent cut in future royalties. It’s the kind of deal that even the biggest stars would struggle to negotiate with their labels.
While this meteoric rise in the world of music NFTs is an undeniable success story, it didn’t come without significant effort on Allan’s part. “A lot of people look at the crowdfunding that I did and think ‘oh, this kid raised like 50 ETH in 12 hours’,” says Allan. “What they don’t know is that for three months, I was individually DM-ing everyone, and hitting people up on Twitter and Discord all fucking day.”
Three months of direct messaging may seem like an amazing bargain considering the eventual pay-off. However, the need for intense, regular social interaction with your online community is not without personal cost. As a career model, the ‘direct-to-fan’ approach is not something that will suit every artist.
If we take a broader view of the crypto economy, the viability of music NFTs becomes more complex. Brian Eno, among others, has called out the environmental impact of NFTs, remarking that “In a warming world, a new technology that uses vast amounts of energy […] to establish a certain badge of exclusivity – really is quite insane.”
Financial independence will undoubtedly drive some artists to go unlabelled. But perhaps a bigger motivation is the desire for artistic freedom and for ownership of the music they produce.
Allan makes clear that the financial benefits of the NFT marketplace were not his primary motivation for getting involved. “I was doing some production fees for songs that I wasn’t passionate about and small record deals with independent labels,” he recalls. “There was an underlying notion that I had to make a certain type of music, in a certain type of genre, and if I stepped out of that, then it wouldn’t necessarily be accepted.”
He’s certainly not alone. Recording contracts typically sign over the copyright of any material the artist produces for a set period, or even in perpetuity. If relations turn sour or if the label gets bought out, artists can be left feeling like they’ve lost control over their life’s work. Paul McCartney famously lost the rights to The Beatles back-catalogue after being outbid by Michael Jackson. The iconic singer-songwriter spent decades trying to reclaim ownership of his tunes, finally winning back the rights in 2017.
One path for artists looking to retain ownership over their artistic output is to form their own label. Kirstine Stubbe Teglbjærg, stage name Sitrekin, built an international following as part of Danish group, Blue Foundation. The singer later decided to strike out in a new direction with her solo career. Rather than signing to a new label, Sitrekin founded Hun Solo Records with fellow songwriter Nana Jacobi and author Anya Mathilde Poulsen.
For Teglbjærg, the motivation to go independent was a matter of personal development and a desire to provide a platform that would celebrate and promote female and non-binary voices in the music industry.
“Many people have asked me, ‘why didn’t you just find another producer and label to work with? That would have catapulted you into a big new career’. Yes, I could have just done that. But this journey to become independent has been such an empowering project. I have this big urge to keep exploring my own inner landscape. If there’s something I feel I can’t do then I want to learn how to do it, and I want to own it.”
Finding the middle ground
Being independent doesn’t necessarily mean having no dealings with record labels at all. Many independent labels are pioneering more equitable and less restrictive business models. Take Oleeva Records, a UK-based label whose approach to the music industry is self-described as “chill”.
“The relationship I have with artists is basically to alleviate any confrontation,” says one of the label’s founders, Will Spence. “If they need to amend the contract for their release, that’s absolutely fine. There’s enough stress and bullshit in our lives. We don’t need to create any more.”
Oleeva Records is part of a growing interest in sustainable business models that put artists at the centre of the equation. Their approach to business stems from Spence’s own experience as a working musician trying to deal with labels.
“A lot of big labels and labels that I’ve signed with in the past have a clause that says, ‘it cost us x amount to release your EP, we need to recoup those costs before you get paid.’ The problem is your track might get streamed half a million times, and it might only make the label a few hundred pounds. So you end up in debt to the label, and you don’t get paid a penny.
With Oleeva, Spence tries to ensure that new and emerging artists don’t end up in hock to the label and instead get paid upfront for their work. “I think that’s the labels responsibility,” he says. “I’ve always said from the beginning that the artist can get paid on their tracks as soon as the tune is out.”
The original concept behind the label’s founding was a desire to bring together music makers and visual artists who could collaborate on something special for each release. Rather than looking over anyone’s shoulder, Spence says he encourages both parties to take risks, experiment, and forge personal relationships through the creative process.
“It has really grown into this international family,” says Spence. “We hang out with each other in real-life. It’s not super-professional – it’s the complete DIY end of the spectrum. But it works.”
At the larger end of the scale, UK based indie label Ninja Tune represents names such as Little Dragon, Bonobo, and Tycho. Founded back in 1990 by Matt Black and Jonathan More of Coldcut, the label has consistently focused on championing a diverse selection of underground and emerging artists.
After over 30 years of releasing music, the company has seen the business landscape reshaped time and time again. Speaking to the company’s managing director, Peter Quicke, and head of digital operations, Tom MacDonald, we asked what challenges an independent label faces in 2022.
“How long have you got?” quips MacDonald. Humour aside, he’s got no illusions that the industry as a whole needs a bit of a shakeup with regard to how artists are being paid.
“There are certainly clear issues the wider industry needs to resolve regarding royalties and streaming,” says MacDonald. “From contracts written up in the days preceding digital music not necessarily being fit for purpose now, to discussions around the percentage of royalties paid.”
“The internet has changed many things over the last couple of decades, so now some old deals look like poor deals,” adds Quicke. “But the reality can be more complex in a lot of cases […] if an artist wants a label to do a load of work, to put in a load of investment, then it doesn’t seem unreasonable for the label to have some ownership of rights. The key is for artist and label to enter an agreement transparently and openly.”
For Ninja Tune, MacDonald clarifies the label’s ethos has always been to strike a balance between the needs of artists and those of the business. “Ninja Tune has always tried to work on a fair, open and equal basis with its artists based on 50/50 record deals and continues to do so.”
Labels like Ninja Tune are up against an ever-expanding array of digital platforms that offer solutions for nearly every aspect of a musical career. But in MacDonald’s opinion, there are still serious advantages to working with an experienced label.
“You’re hiring a team to help with the making, release and promoting of your music on your behalf. To create, manufacture, release and promote music can be a huge undertaking depending on your ambitions […] working with a label in any form will hopefully give you access to a team of genuine music lovers who can help take on this work on your behalf, so you can focus on your main job – making the best and most honest music you can make.”
Choose your path
It’s clear that record labels still have a lot to offer for emerging and established artists. They may no longer be the sole gatekeepers of distribution and promotion, but they have the experience, resources, and connections that are integral to large-scale success in the music industry.
For artists, deciding whether to sign with a label or go alone is not clear cut. It’s a tightrope of competing interests: independence offers creative control, ownership and, potentially, a higher income, but there’s no denying that this path brings with it a much larger workload. The danger of artists burning out while trying to keep up with paperwork – when they should be writing tunes – is not something to ignore.
By and large, the motivation to be an independent artist, to seek out new ways of building and engaging an audience, is not about wanting more; it’s simply about wanting enough. It’s too early to tell if the current NFT movement will translate into an economically and environmentally sustainable business model. But for independent artists like Daniel Allan, the push to make it work is motivated by a larger desire to reset the way we undervalue, or overvalue, music in society.
“I’m not out here saying this will create a world where every artist makes millions of dollars,” says Allan. “But could there be a world with a musical middle class? Where people are living somewhat comfortably and are able to do exactly what they love? That would foster a better place in the world for art.”
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