The Dirty Little Secret Recording Artists Are Too Ignorant to Understand

Internet revenue could restore the balance of power between artist and distributor

Spotify Streaming Coin Money
Cheyne Gateley

Once upon a time recording was profitable.

Then MTV came along, and with the advent of the CD, revenues soared. But artists bitched that they were receiving half their usual royalties, as the labels invested in the new format. Their complaints went nowhere, and the CD made not only the companies rich, but those who ran them. That was the switch. The Beatles et al. stole power from the labels, but in the ’80s, the labels took it back, because there was just too much money involved. And the more money, the more risk.

Now, recording revenues have shrunk. But streaming, and Spotify, could bring them back. That’s the dirty little secret artists are too ignorant to understand — that if everybody’s paying, the overall pot grows.

But the problem with artists is they don’t see the big picture.

You think the label is making you famous.

Once upon a time, the label not only made you famous, you made a lot of money on recordings if you hit. The evisceration of this model is not the fault of either the labels or of Spotify. Those who think Spotify is ruining royalty payments believe 8-tracks and cassettes should have never replaced LPs. Change happens.

And the latest change is that without the money and power of the label behind you, you probably will go unnoticed.

So maybe, despite having such a low royalty payment, that’s what you’ve earned.

I know this is heretical. But the point is, no one is preventing you from going it alone. Now, more than at any time in modern recording history, you can do it yourself. You can record cheaply, distribute and get paid. But the truth is, most of the people complaining about their indie Spotify payments are known only for this model; they’re niche artists at best.

No one who’s a newly minted household name is complaining.

In other words, you give to get.

You give your rights to the label in order to get a chance at fame and riches. And this has nothing to do with Spotify, and nothing to do with the fact that the major labels have an interest in the company, along with Merlin indies.

There’s a high entry price. Just like you can make your own movie and make all the money, but you’d rather be in a blockbuster where you get a huge upfront payment and profit participation that doesn’t pay out.

So if the acts want any change at all, the target should be their labels.

As for indie labels, excepting giants like XL, most are worse than the majors. If they don’t go bankrupt, their accounting is horrifying. That’s why the majors exist to begin with.

Unlike athletes, however, artists, who are famously disunited, are not joining up to establish minimum payments. They’re not lobbying for free agency. They’re not improving their lot, just bitching.

If only every artist like Def Leppard — and they’re not the only one with this right — refused to let their label put their catalog on digital services. If only a case was litigated wherein streaming was seen as a license, and 50% went to the artist.

Instead, Spotify is the punching bag. Just like Ticketmaster is in the concert sphere. Ignorant people are attacking the wrong target.

Then again, the label seems to be the only one investing in you. Managers are not coughing up serious dough, and agents certainly aren’t. It’s kind of like taking venture capital money. He who puts down the cash takes the lion’s share, especially if the business/act has no traction.

Sell out theaters on your own, and you’ll get a better deal.

It’s called leverage.

Build your own and stop complaining.

Read more Bob Lefsetz columns at Lefsetz.com.