Music Industry

Written Essay
Term January 2023

Student Lecturer
Elizardo Vásquez Will Whisson

Word count: 2.351 words

London – March 10th, 2023

INTRODUCTION

Facing the statement 'Over the last fifteen years, the ways that independent artists can
generate a living wage has evolved for the better.', the following pages will present
evidence to prove this is correct in terms of fewer barriers to starting a music career.

Certainly, the success of making a living in music depends basically on the efforts invested,
however, this research has been focused on the increasing number of opportunities to
start and survive in the Music Industry. In a few words, the theory proposed is “last 15
years have seen a positive evolution for indie artists with an entrepreneurship spirit”,
clarifying that luck is here weighted to the minimum.

The key areas of analysis in this work are Digital Distribution & Aggregators, Live Sector,
and Artist Management as the critical axis for an independent career. The research carried
out provides evidence of how the barriers to be competitive in these areas have been
reduced and some of them disappeared in the period of analysis. Even when eliminating
barriers could be less attractive from the point of view that the quantity of “competitors”
is higher, the focus in this work reinforces the idea of a “democracy” where success is
correlated to efforts, talent, and consistency more than luck or wealthiness.
BEFORE DISTRIBUTION

Before getting into detail about the 3 selected dimensions, it’s important to state this work
has considered that indie artists currently have access to professional recordings as a
previous step to arriving in the world of Music distribution. Professional recording is no
longer restrictive thanks to the changes in the Studio Market, as confirmed in the research
of the Department of Digital, Culture, Media and Sport of the UK: “The studio market has
undergone historic changes, shifting from the corporate studios operated by major record
labels, to the independent studio sector and more recently home/project studio”, ”studio
services rates are believed to have declined and/or stagnated over the last 20 years.” (Kirkby,
P.R. 2015)
The quoted research mentions Studio Services as an open and free market: “The evidence
shows that there is enough supply of music studios, barriers to entry are low and there are no
signs of monopoly/oligopoly or any other market dominance. The market is responding to
changes, such as technological innovation, and to new competition.”

DIGITAL DISTRIBUTION AND AGGREGATORS

As stated by Bargfrede: “Frustrated by low payouts, artists and writers and their
representatives continue their calls for greater transparency in the streaming music industry,
demanding faster better data from their labels and publishers about their streaming earnings”,
(Bargfrede, 2017, p.58), the sale of recorded music via streaming currently is not attractive
as a direct source of income. This suggests that artist efforts today are probably not
concentrated on getting contracts with labels and publishers who cannot provide
transparency and differentiation compared to DIY careers. According to the stated above,
streaming today can be taken as a bridge for fast access to listeners, and consequently to
the more profitable music formats and related products.

The massive consumption of music via streaming is beneficial for listeners but not for
average artists since it has adopted the “Buffet” model, as explained in the Music and
Streaming Market Study by CMA: “Streaming has been a success because of what it provides
to consumers. The predominant model is an ‘all you can eat’ one – there are no additional
charges for listening to lots of music. The success of streaming can be shown by the number of
people using streaming services. In December 2021, there were 39 million monthly active users
of music streaming services in the UK” (CMA, 2022, p.9).

The easy access to distributions thanks to aggregators and DSP has helped with the
opportunity to get popular without the budget required for the physical production and
distribution (Vinyl, Cassettes, CDs) however this massification does not mean directly a
good return. A comparative summary from headphonesty.com expose the magnitude of
income generate to the artist by the main DSPs (See Annex - Figure 1).
Considering $1000, the main DSPs require between 77 to 770 thousand streams to
achieve this amount when this number could be achieved by 100 physical albums (vinyl,
CD, Cassette) estimating a unit price of $10. This amount could be also reached by
performing live on average after 7 performances, taking as reference the values reported
by musiciansunion.org.uk (See Annex - Figure 2).

The door for digital distribution was open to allow millions of new artists to get into the
Music Industry with low access barriers and low costs but at the same time without
significant incomes in return directly. Here once again, this is just a tool without magic
contained, it means that indie artists will get the advantage of it if they can capitalize on
the scope and popularity that aggregators enable.

According to the payment rates shown above the digital distribution of music is not
enough to make a living, especially in the early stages of an indie career. But the easy
access creates opportunities to be exposed faster without the costs of physical
distribution.

Another advantage of easy access to streaming services is the homogenization of the

perceived quality by an average listener. According to the vice president of Advanced
Strategic Solutions for Xperi, John Kellogg, “Oh, the loudness war’s over; it’s all LUFS now,”
(soundstagesolo.com, 2021). Kellogg explains technically as follows:

“LUFS (loudness units relative to full scale) targets for streaming services are
typically somewhere in the mid-teens: for example, Amazon is -11, Apple Music is -
16, and Spotify is -14. If a file mastered in the peak of the loudness war era for an
average level of, say, -5dB RMS, is played through these streaming services with the
volume normalization on, the service will bring the volume down to its LUFS
standard.”

It means; there is no sense in investing large budgets on mixing and mastering to get a
louder song as it was during the Loudness War. Probably today there will still be
differences in quality between a big label song and an indie artist song, however, a big
portion of the perception of not trained ears is related to volume, and nowadays is not
possible to say these two types of songs sound different in terms of volume. That feeling
of different volumes between a local artist and a big hit from major labels is no longer
existing.

Live Sector

The Bowie theory exposed by Alan Krueger in his Paper 'The Economics of Real
Superstars: The Market for Rock Concerts in the Material World' (2005) anticipates the
following: "Music itself is going to become like running water or electricity. You'd [artists] better
be prepared for doing a lot of touring because that's the only unique situation that's going to be
left."
This theory has been supported in the last decades by the increase in the revenue share
corresponding to live performances compared to recorded music in the UK (Johansson &
Larsson, 2010). As the site medium.com well summarizes the information available in
Statista, revenue from the concert industry rose from $1.3 billion to $8 billion in 2017.
This is possible to explain because Touring is a faster way to generate income and the risks
are lower in comparison to Streaming or physical distribution of music. For a live
performance, the artist can prepare an estimation of sales and he/she knows in advance
how many resources will be necessary as equipment to be carried, logistic expenses
(gasoline, food, roadies, etc), and human hours to invest considering rehearsal, commuting,
and promotion. The costs can be estimated with precision and sales projected according
to the nature and capacity of the venue. This allows confirming if the efforts will generate
profit or not. Some cases are even better when the amount to be received from the
Venue, Festival or event is a sum lump amount.

On the other side, the income produced by streaming and sales in physical formats of
music is uncertain. A change in technology or a natural disaster can make an album
absolutely ignored right after its release. This means that estimation of profit is difficult
and as consequence, the artist must assume the risk of never recovering the investment
in producing, recording, and publishing.

In a live event, especially in the early stages of an artist, the music can be created and not
necessarily recorded, allowing to the artist reduce the costs or even generate the
resources to record a song playing it in advance in live shows. But it was also possible 15
or 30 years ago, so how has this changed in favor of indie artists? Today the item
Advertisement to bring people to the shows is much easier and with costs near 0, it means
that hundreds of people can see an image or short video digitally distributed in a matter
of hours, and this content is usually generated by the artist or the venue without printing
a single sheet (Byrne, D. 2012).

For an indie artist, in addition to social media for promotion, is possible to find free tools
such as Canva, to create logos, album covers, videos, and all types of templates for ads
with professional quality as proposed in the Plans and Pricing section of their website
(canva.com/pricing, 2023).

Artist Management

“Before streaming became the principal earning source for the recording industry, managers
were at the hub of the artist`s career, providing many of the services formerly handled by
labels.” (Allen, 2015). This idea clearly states what is the origin of the change in the role of
the Artist Manager: The streaming era does not require the level of expertise that
managers used to provide as a key factor for success or at least so if there is no label
involved.

An experienced and professional manager is crucial for a sustainable career, and with high
value at the time of facing contracts negotiation with Record Labels, Publishers Festival,
etc. however, according to the stated above, the manager as understood in its classical
definition can be postponed in an indie career, which allows the artist to gain the primary
experience as a businessman because this is what a manager also expects from his clients.
As Business Manager Aaron Van Duyne says, He doesn’t like to deal with an artist who
“Stick their head in the sand and says, ‘You do it.’” (Marcone and Philp, 2021)

Saving money on a manager is probably a double-edged sword, when the disadvantage of

not having a professional administrator could lead to inefficiency and less popularity, there
is an important payoff for an artist taking the responsibility of managing his first steps.
Self-management will not only provide savings but also knowledge of how the industry
works and how complex each task can be. This knowledge could be later used to make the
right decision about what a good manager needs.

Another advantage of this idea of delaying the manager’s adoption is the opportunity to
create a clear proposal of art, what values and intentions are involved as well as the c of
artistic identity. When the artist is offering something serious to the industry, the task will
be more about picking the best manager between all those showing interest and making
clear offers instead of looking for one that needs to figure out the first steps of the artist’s
career and formulate the vision to later realize that no one of the parts is satisfied with the
result. This has been summarized by Loretta Andrews, founder of Safe Music
Management, whose clients include Guvna B and Joshua Luke Smith, she says “Many
artists think they should go for the most ’well-connected’ manager with an impressive roster of
many successful artists, when in truth the most important requirements are someone who
believes in you as an artist and is going to work extremely hard because of that.” (Musicians`
Union, 2022)  

It is important to keep in mind that we are talking about an indie artist willing to get his/her
hands dirty and will work hard to obtain a “product” which will catch the attention of good
managers. This previous first-hand experience will allow him/her creating an own
definition of a “good” manager.

REFLECTION

The music Market offers today more opportunities than 15 years ago for artists willing to
get his/her hands dirty.
The initial step of recording music is no longer restrictive and reaching one hundred or one
thousand listeners will not make a big difference directly because listeners via streaming
is just the bridge to more opportunities, it is a highly transited highway but not a
destination as it used to be at the beginning of ‘00s. There is no better payment for the
recorded music today.
The live sector has been predicted as the transcendent format because in the last years
recorded music cannot offer relevant differentiation and while the volume of income from
touring is highly variable for levels of artists and their popularity, from the point of view
of business the risks can be better controlled than bets on sales for recorded music.
A manager was probably worth considering from the early stages of a professional career
in the last decades, and nowadays this decision is still present in almost every artist’s
career, however, it has been postponed. The question of taking a manager is always
present but the field has been leveled in favor of starting artists who can work by
themselves in their production, recording, and touring to gain enough experience to know
at least in which areas they need support, at the same time save money in their first steps
and finally to create an interesting proposal attractive for passionate managers.

In general, lower barriers mean lower investment, and this is precisely what determines if
an indie artist can start or not a music career. This makes major keys to success the
creativity of an artist and his/her business skills, more than his capabilities to invest a big
budget to start or convince a label about his quality and potential of acceptance by
listeners.
Student Name: Elizardo Vásquez
Student ID : 386124
Module : Music Industry
Component : Written Essay

REFERENCES

Allen, P. (2015). Artist Management for the Music Business. New York: Focal Press.

Bargfrede, A. (2017). Music Law in the Digital Age: Copyright Essentials for Today’s Music
Business. Boston: Berklee Press Publications. p.58

Butterworth, B. (2021). The New Standard That Killed the Loudness War. [Online] Available at:
<https://www.soundstagesolo.com/index.php/features/274-the-new-standard-that-killed-the-
loudness-war>(Accessed: 10 March 2023).

Canva. (2023). Plans and Pricing. [Online] Available at: <https://www.canva.com/pricing/>

(Accessed: 09 March 2023).

Competition & Market Authority (2022). Music and Streaming – Market Study Update. Crown.
London, p.9.

Department of Digital, Culture, Media and Sport. Gov UK (2021). Music Studio Market
Assessment. DCMS Service Gov UK. London, pp. 81-82

Krueger, A. (2005). The Economics of Real Superstars: The Market for Rock Concerts in the
Material World. Chicago: Society of Labor Economists, Economics Research Center/ NORC.

Marcone, S. Philp, D (2021). Managing Your Band: A guide to artist management. Seventh
Edition. London: Rowman and Littlefield.

Musicians’ union. (2022). How to Choose a Manager. [Online] Available at: <
https://musiciansunion.org.uk/events-career-development/career-development/career-
guides/working-relationships/how-to-choose-a-manager> (Accessed: 09 march 2023).

Musicians’ union. (2022). National Gig Rates. [Online] Available at: <
https://musiciansunion.org.uk/working-performing/gigs-and-live-performances/live-
engagement-rates-of-pay/national-gig-rates> (Accessed: 09 march 2023).
BIBLIOGRAPHY

Allen, P. (2015). Artist Management for the Music Business. New York: Focal Press.

Bargfrede, A. (2017). Music Law in the Digital Age: Copyright Essentials for Today’s Music
Business. Boston: Berklee Press Publications.

Butterworth, B. (2021). The New Standard That Killed the Loudness War. [Online] Available at:
<https://www.soundstagesolo.com/index.php/features/274-the-new-standard-that-killed-the-
loudness-war>(Accessed: 10 March 2023).

Byrne, D. (2012). How Music Works. New York: McSweeney's, pp 154-197

Canva. (2023). Plans and Pricing. [Online] Available at: <https://www.canva.com/pricing/>

(Accessed: 09 march 2023).

Competition & Market Authority (2022). Music and Streaming – Market Study Update. Crown.
London, pp 9.

Department of Digital, Culture, Media and Sport. Gov UK (2021). Music Studio Market
Assessment. DCMS Service Gov UK. London, pp. 81-82

Kirkby, P.R. (2015). The Evolution and Decline of the Traditional Recording Studio. [Online]
Available at <https://livrepository.liverpool.ac.uk/3000867/1/200488719_Sept2015.pdf>
(accessed 15 April 21)

Krueger, A. (2005). The Economics of Real Superstars: The Market for Rock Concerts in the
Material World. Chicago: Society of Labor Economists, Economics Research Center/ NORC.

Marcone, S. Philp, D (2021). Managing Your Band: A guide to artist management. Seventh
Edition. London: Rowman and Littlefield.

Musicians’ union. (2022). How to Choose a Manager. [Online] Available at: <
https://musiciansunion.org.uk/events-career-development/career-development/career-
guides/working-relationships/how-to-choose-a-manager> (Accessed: 09 march 2023).

Musicians’ union. (2022). National Gig Rates. [Online] Available at: <
https://musiciansunion.org.uk/working-performing/gigs-and-live-performances/live-
engagement-rates-of-pay/national-gig-rates> (Accessed: 09 march 2023).
 ANNEX

Figure 1

Source:
headphonesty.com

Figure 2

Source:
musiciansunion.org.uk

For this research, the exchange rate is considered £1 =1,2