Changes in the music industry

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I have been hands-on in the basement-turned-warehouse for a few days and I stumbled across boxes of books that um, we overbought. The title is Professional Music Strategies – Surviving and Flourishing as an Independent Artist and I wrote it back in 2014. It is actually labelled the 2014 edition when I optimistically thought I might update and republish every year.

The truth is I am like my friend David Nevue who wrote the business book on music that inspired me back in maybe 2007. He used to keep his book up to date with new editions too but when I asked him recently how he was doing with that, he just shook his head. Keeping up with the changes in the music industry in book form is complicated and tedious and frankly, it is not what I want to do. So, I have not touched that project since I wrote it.

The good news is that 90% of my book is still relevant and helpful. However, a few things have changed as I will discuss below. Regardless, I want to stop selling a book that is marked as a 2014 edition so I want to get rid of my inventory. I slashed the price in half (to $10 including shipping). You can learn more about it and buy it here:

If you are interested in how I view business in general but specifically how I have built my music business online, you will like that book. Even if you are not in music but considering starting a business or are involved in any kind of online sales, the book will help you.

I will sign all books we ship until we get rid of them. By the way if you really just don’t want a physical copy, you can download the book immediately for a low price at the same link.

All right, now that I have gotten that out of the way, let’s talk about the state of the industry. First of all, let’s shoot down a myth. Music is not dying. Music is doing quite well and so are many musicians. Let’s face it: the majority of musicians who attempt to make it professionally are going to struggle. It is crowded out there. On the other hand, I know numerous musicians that are doing great largely because the prediction that illegal downloads would destroy the music industry turned out to be not true.

Back around 2010, it was all doom and gloom. At the time, Napster was a music pirating site and they seemed destined to take down the industry almost by themselves. CD sales had plummeted and legal downloads were not picking up the slack. We were all wondering if it would be financially feasible to keep producing music.

Amazingly, the industry discovered two important things: first, customers were still willing to pay for music and second, it was in fact possible to crack down on illegal distribution of music. As a result of those discoveries, I think we have been in a little bubble for a few years. In some cases, it has felt maybe just a little too good. I can name musicians that virtually no one has heard of that have been earning very solid six figure incomes.

The majority of that income has come from streaming (Spotify and Pandora in particular). Streaming has been good to me as well (especially Pandora). I think most people (including most musicians) would be very surprised to know how much money you can earn on Pandora alone. I told this to a friend of mine a year ago. He did not even know he was on Pandora but somehow he had one CD on there. They keep royalties for you until you claim them and when he set up an account with them, they sent him an enormous check for retroactive royalties. (I know that because he called me giddy and wanting to take me to lunch.)

This has not worked for all kinds of music by the way. I went to a Christian music event a few years ago and was in the room with Dove winners. I asked them if they were happy with their streaming revenue and they practically laughed at me. They said it was impossible to make more than ten dollars a month on streaming services. They made me feel embarrassed but that is their loss; they would not be laughing if they saw my monthly Pandora check. However, I am not bragging. The truth is it is more about my genre of music than anything. Piano music does well on those services but CCM does not.

That being said, things are changing and probably not for the better. The industry has probably caught on that maybe there is something a little off about almost-unknown musicians making $30,000/month from Pandora (and yes I know more than a few musicians like that). At the end of last year, several things happened. First, licensing has been renegotiated and probably not for the better. In other words, Pandora in particular is paying less. Second, Pandora really changed their business model. They have never been profitable and they are struggling to find a way to the black. It appears that they are moving towards a Spotify model and it is unclear how successful that will be. Third, for whatever reason, many of my friends’ numbers are off. Overnight, they have seen a big drop in “spins” (streams) and revenue. I am talking like a 75% drop. It is unclear why but it is happening.

My own Pandora numbers are steady but not growing. They grew very fast until the end of last year but have stagnated. My Spotify numbers are growing but Spotify is still small for me in comparison to Pandora. Other streaming/download revenue (iTunes, Amazon, etc) is still healthy. YouTube has gotten in the game with Red but it pays horribly unless you are willing to slap ads all over your videos (I am not). CD sales of course continue to plummet.

I am certainly not complaining at all. Overall, we are doing fine though I am watching Pandora with baited breath. Even if it fails, other companies will probably pick up the slack and these streaming services really do pay extremely well. Spotify for example pays about .4 cents per spin. That sounds insignificant but it is not when you start talking about millions of spins.

On a slightly different note, Facebook seems to be making a little recovery though I had pretty much given up on it for a while. By the way, here is a quick tip. Upload your videos to Facebook rather than just linking to them on YouTube. Facebook will give them more priority if you do and in the first few days of a new video, I get more views on FB than YT. Facebook ads should also get a second look from professional musicians. Check out their custom audiences and remarketing opportunities.

All in all though, I would not say too much has changed since 2014. The overall philosophy I preach in the book should be the same. The best strategy in today’s social media world is simply generosity. You can’t go wrong with that.

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