FOOD FOR THOUGHT: Artists are being dissuaded from…by Anil Prasad

I honestly no longer give a damn who I offend in the music industry, as long as I am telling the truth. So, here’s more truth that is virtually completely unreported. Artists signed to major labels are being dissuaded from encouraging people to buy physical media. Obviously vinyl and CDs still exist and have a “souvenir presence” in what’s left at retail and at the merch stand. What you may not know is executives at all the major labels consider physical media a giant albatross and they cannot wait to get rid of it in its entirety. I have seen major label executives first-hand lecture artists on “getting over” physical media because “It doesn’t matter. All that matters are the streaming numbers.”

“…major labels consider physical media a giant albatross.”

The view is the entire supply chain and distribution system is burdensome. And even at the non-nefarious level, that’s understandable, given the legitimately declining interest, the ongoing issue of returns/credit, and distributors/wholesalers/retailers that are in precarious business situations and sometimes are incapable of meeting financial obligations.

But the physical media element is all coming to an end in the West fairly artificially when you look at the big picture. The labels tell the artists “Your streaming numbers matter, because it’s what lets us justify your market position. It’s what gets big television shows interested in you. It’s what promoters care about to ensure you’ll draw numbers. It’s what gets journalists interested in writing about you (right…).” The truth? It’s being driven more by the major labels’ investment in Spotify, and as stated in the last post, their greed-driven desire to benefit from both the initial IPO investment level and the valuation multipliers on the other side. And if Spotify proves to be a giant dog’s breakfast of a publicly-traded entity as many believe (seriously, you’d have to be a total moron to invest a penny in it), they will still need to prop up streaming/subscriber numbers during any kind of sale of the company, even if it’s to a private equity firm. All of this is to say, this is a largely-manipulated situation. It’s also why you see so many third-parties licensing major label catalogs for vinyl. The major labels are happy to do that, because they don’t have to do deal with the supply chain or risk. It’s mostly in the hands of music-loving indies that absorb that burden.

“The labels tell the artists “Your streaming numbers matter, because it’s what lets us justify your market position.”

One last point to make. I have sat in rooms with billionaire VC executives here in Silicon Valley. When I bring up the topic of streaming companies as an investment, there is uproarious laughter in the room. They consider it a toxic, untouchable structure. Most of them won’t go near any of it, because they see the disaster it is at all levels. They are surprisingly ultra-detailed in their knowledge, understanding the hilarious ironies of the major labels owning part of Spotify, demanding a profitable business model, while also completely getting in the way of it. They also understand the brutality at the artist level, believe it or not. So, they are worried about severe backlash at that level. They see the whole thing as unsustainable. And that’s the view of some of the most cunning business people in the world.

I’m sure there are music industry people that will say I am totally full of shit. In this post-truth world, they can and will do that in private or publicly. All I can tell you is none of this is second-hand information. It’s entirely the result of first-hand dealings and observations with people at the very highest levels of all of this. People who no doubt will never speak to me again.  (Like I care…)

EDITOR’S NOTE: “Established in 1994 by music journalist Anil Prasad, Innerviews is the Web’s first and longest-running music magazine. Innerviewsdelivers in-depth, uncompromising interviews that enable artists to speak at length about topics that matter to them.” – is an underground Asian music news website created for the sole purpose of supporting our own world. We support all bands and genres HOWEVER we do not support nor have any sympathy for homophobic, racist, sexist rhetoric in lyrical content or band material. UNITE ASIA!

1 Comment

  1. NK

    March 20, 2018 at 8:48 am

    I get what you’re saying, but …

    1. I started going to shows in 1990, when I was 13. That was also around the time I started buying CD’s. They cost $18 typically. One notable exception being Dischord Records releases, those were always available direct from the label for $8 post-paid. But everything else I bought (or my mother and father bought for me, to be precise) from the Sex Pistols to Operation Ivy, cost $15 to $18 I’d say on average. Prices were incredibly inflated and the worst part about it is that the artists, the musicians, were still getting very little of the money relative to the labels and distributors. Music was expensive and it was rewarding the wrong people in the industry by and large.

    2. A few years later I started getting into vinyl, and eventually amassed about 4000 records (which I then eventually sold, too.) LP’s and especially 7 inch records from DIY or indie labels were always cheaper than the cost of CD’s in a record store. CD’s directly from some labels, as mentioned before, or from bands on tour, would usually be more reasonably priced, but I’m still talking about ages 13 to when I started getting into vinyl at around age 16 or 17.

    3. Sales of recorded music (not streaming subscriptions) on any format – CD, vinyl, digital download – are nearly non-existent for the majority of artists these days. Yes, Taylor Swift and a few other of Frankenstein’s laboratory style pop artist creatures still manage to sell millions of records via Wal-Mart and so forth, but for most musicians, most labels, and most of the industry, actual sales of recordings are no longer a revenue stream that amounts to much.

    4. Some artists seem to be doing okay through Spotify streaming, whilst others aren’t getting much of anything at all and are publicly critical of the platform as they feel they’re being cheated (and may very well be.) The problem with Spotify is that it isn’t a profitable business. To my knowledge, thus far in its history, it has lost money every year it has been in operation. Businesses without profits are not going to be around in the long run. Eventually, their investors will call bullshit on their business model and on the whole streaming scheme if it doesn’t become profitable sooner than later. Goodbye Spotify and paying their subscription fee.

    5. There are, however, other means of streaming or digital distribution available that are doing just fine financially. YouTube isn’t going anywhere and artists or anyone who owns copyrighted material that has been posted can monetize it and collect revenue (in tiny streaming increments, of course) that can become significant over time and with enough views.

    6. Here’s what I believe should happen:

    – CD’s should go extinct, for environmental reasons if no other. They involve a lot of plastic and the demand is extremely low. There are already many landfills packed full of them. Let CD’s die.

    – Vinyl should be kept around for the collector’s market, the hobbyist market, and nostalgia purposes. Vinyl is doing better right now than it has since it was overtaken by the 8-track tape and then cassette in the 70’s and 80’s. New pressing plants have actually opened up in America to meet the demand. It will always be a niche market rather than the majority of fans buying it, but it has its place.

    – Most artists and bands would do well to follow the example of Run the Jewels and just release their records themselves for free as a download or via streaming on YouTube or whatever platforms. RTJ doesn’t get paid for their recordings, but they were making like $20,000 a show and selling a ton of merch when I last saw them a few years ago, and I can only imagine their guarantee has increased since then. Sure, it requires a lot more effort to tour and play live constantly, it’s not ideal for everyone, but it’s better than wishing upon a star that CD’s make a comeback or Spotify figures out its own accounting system and starts paying most artists whose content is being streamed a living wage.

    7. Back in the day, the problem was that the label got 90% and the producer got 3% and the musicians got 7% royalties on their album sales. And they had to pay the label back for the cost of recording their album and for any cash advances they were given up front and even for their touring costs. Many artists ended up in debt to their label despite being world famous and selling plenty of records. That system sucked just as much as the current one – far worse actually – because the Internet wasn’t available so that fans and artists could try and cut the labels and the middlemen out of the entire exchange quite easily.

    8. So, yes. Artists should for sure get over some physical media, forget about it, nobody is buying it. You might sell some vinyl, but it won’t be enough income to live off of much less get rich from in most cases. Touring, merch sales like shirts, crowd-funding in some cases, or letting some car company use your song in their shitty ad despite it making you throw up in your mouth when you see and hear it for yourself … Those are ways to make a living. Streaming is still an afterthought for most bands though. Chump change.

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