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Digital revenue streams for sound recordings

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Presented at Vienna Music Business Research Days, October 2, 2014, based on data collected through the Artist Revenue Streams project.
http://money.futureofmusic.org

Published in: Data & Analytics
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Digital revenue streams for sound recordings

  1. 1. Musicians’ earnings from digital platforms Kristin Thomson, Future of Music Coalition @kristinthomson
  2. 2. How have these changes impacted musicians’ ability to generate revenue based on their creative work? money.futureofmusic.org/about-the-project/
  3. 3. Source: RIAA via Future of the Music Business
  4. 4. Research question What percentage of musicians’ income comes from each possible revenue source? money.futureofmusic.org/research-questions/
  5. 5. 42 revenue streams Mechanical royalties Streaming mechanicals Mechanicals for cloud storage, lockers Commissions Composing original works for broadcast Sheet music Lyric display Label advances Label support Retail sales Sales at shows Digital downloads Cloud storage payments Digital performance royalties Interactive service payments YouTube partner program Master use synchs Performances Salaried work Session work in studio Sesson work live money.futureofmusic.org/40-revenue-streams/
  6. 6. Prior to 1998 Composition income Sound recording income Mechanical royalties Public performance royalties Synch licenses Jingle writing/composing for hire/ commissions Physical retail sales Physical mailorder Selling music at shows Master use synchs
  7. 7. Composition income Sound recording income Mechanical royalties Public performance royalties Synch licenses Jingle writing/composing for hire/ commissions Physical retail sales Physical mailorder Selling music at shows Master use synchs Digital download sales Digital performance royalties Interactive stream payments Cloud storage payments YouTube partner program + + Streaming mechanical royalties Mechanicals for cloud storage Lyric display royalties YouTube partner program
  8. 8. 42 Revenue Streams Served as the genesis of the project, a framework for the research, and lives on as an outcome. money.futureofmusic.org/40-revenue-streams/
  9. 9. Revenue Streams: Existing, Expanded and New money.futureofmusic.org/revenue-streams-existing-expanded-new/
  10. 10. Qualitative and quantitative data collected from US-based musicians and composers via: • 80 in-person interviews • six financial case studies • over 5,300 completed surveys Collected between 2010 and the end of 2011. money.futureofmusic.org/findings/
  11. 11. Composition income Sound recording income Mechanical royalties Public performance royalties Synch licenses Jingle writing/composing for hire/ commissions Physical retail sales Physical mailorder Selling music at shows Master use synchs + + Streaming mechanical royalties Mechanicals for cloud storage Lyric display royalties YouTube partner program Digital download sales Digital performance royalties Interactive stream payments Cloud storage payments YouTube partner program
  12. 12. Q12: Survey respondents asked to allocate money among these categories: Composition income/being a composer Sound recording income/being a recording artist Performance income from guarantees/percent of door Salaried performer Session player (live and in studio) Brand-related income Knowledge of craft/teaching money.futureofmusic.org/revenue-types/
  13. 13. Aggregate revenue pie for all survey respondents 6% of income in past 12 months derived from sound recordings N = 5371
  14. 14. Range of revenue derived from sound recordings for all survey respondents 3552 66% reported 0% of income 1183 from sound recordings 237 144 53 73 20 7 27 16 9 44 4000 3500 3000 2500 2000 1500 1000 500 0 0% 1 to 10% 11 to 20% 21 to 30% 31 to 40% 41 to 50% 51 to 60% 61 to 70% 71 to 80% 81 to 90% 91 to 99% 100% Percent of music-related income derived from sound recordings in past 12 months. N=5371 Number of survey respondents 22% reported 1% - 10% of income from sound recordings
  15. 15. Revenue derived from sound recordings Income from sound recordings, in past 12 months, by primary genre 1% 4% by primary genre 6% 12% 14% 6% 0% 5% 10% 15% 20% All (N=5371) Rock (N=569) Hip hop (N=93) Country (N=262) Jazz (N=872) Classical (N=1863) Percent of music-related income in past 12 months
  16. 16. Perceived changes in revenue from sound recordings over prior five years Changes in revenue from sound recordings over past five years Increased Stayed the same Decreased I don't know Not applicable 16% 18% 22% 3% 41% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of survey respondents. N = 4447 N=4447 6% more report a decrease in revenue than an increase 41% say changes in revenue from SR is “not applicable"
  17. 17. “The thing that’s decreased—this won’t surprise you—is the income from recording. By that I mean the royalties, the advances, all of the income streams that go along with the recordings. It’s all decreased significantly over the last 10 years.” – Contemporary Chamber Ensemble
  18. 18. “Have you ever earned any income from....” 13% 17% 35% 62% 79% 74% Interactive streaming services Digital performance royalties 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Physical sales Sales at shows Digital downloads Interactive streaming services Digital performance royalties Synchronizations Percent of long-path respondents who are participating Physical sales Sales at shows Digital sales Synchs all long-path respondents
  19. 19. “Have you ever earned any income from....” 16% full-time musicians 19% 37% 66% 76% 79% Interactive streaming services Digital performance royalties 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Physical sales Sales at shows Digital downloads Interactive streaming services Digital performance royalties Synchronizations Percent of long-path respondents who are participating Physical sales Sales at shows Digital sales Synchs
  20. 20. “Have you ever earned any income from....” primary genre: rock 31% 16% 36% 72% 83% 74% Interactive streaming services Digital performance royalties 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Physical sales Sales at shows Digital downloads Interactive streaming services Digital performance royalties Synchronizations Percent of long-path respondents who are participating Physical sales Sales at shows Digital sales Synchs
  21. 21. Digital download sales “iTunes is a specific technological development that’s been helpful to revenue…” – Jazz manager
  22. 22. Digital download sales “Digital sales have boosted and that’s one thing instance where we’ve been lucky. Whoever those people are who buy iTunes singles seem to like us. So we have that going for us in that we sell a shit ton of those.” – Guitarist in platinum selling rock band
  23. 23. Sales at shows “What puts the money in our pockets from record sales is concerts.” - Contemporary chamber ensemble
  24. 24. Interactive service royalties “Yeah, it’s still small, it’s still not a lot of revenue but every month it gets better… or every quarter, whenever we get our statements, it’s better.” - Rock band manager
  25. 25. Digital performance royalties “...the royalties that are collected for featured artists for digital broadcast by SoundExchange has become a real source of income…” - Jazz publisher
  26. 26. Perceived changes in revenue from sound recordings Changes in revenue from sound recordings over past five years Increased Stayed the same Decreased I don't know Decline to answer 45% 39% 50% 58% 26% 33% 24% 30% 28% 20% 31% 20% 33% 14% 34% 17% 11% 49% 4% 5% 4% 11% 11% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Physical sales (N=772) Sales at shows (N=818) Digital sales (N=646) Interactive streaming Interactive streaming services (N=362) services Digital performance Digital performance royalties (N=140) royalties Synchs (N=312) Percent of long-path respondents 23% more report decrease even split 41% more report increase 39% more report increase 31% more report increase 5% more report increase over prior five years, by category Physical sales Sales at shows Digital sales Synchs
  27. 27. Technology has had a significant impact – both good and bad – on the sound recording landscape. money.futureofmusic.org/sound-recording-income/
  28. 28. Sound recordings are part of a bigger revenue picture. money.futureofmusic.org/sound-recording-income/
  29. 29. Jazz bandleader Chamber music group Professional orchestra member Live Performance 77.8% Grants and Awards 7.5% Record Label Advance 5.0% Commission 2.6% Sideman Record Sales 1.8% 1.7% PRO Royalties 0.8% Other 2.8% Salary: orchestra 64.8% Freelance: live 27.3% Knowledge of Craft 3.1% Freelance: studio Prize Money 1.9% 1.8% Recording Income 0.8% Radio Royalties 0.3% Jazz sideman Indie rock composer/performer Background vocalist Sideman: Performance 32.4% Live Performance 15.0% Administrator 14.9% Grant 11.6% Teaching CD Sales on the Road 0.4% Recording 0.9% PRO Royalties Sideman: 10.5% Performance + Organizer 8.0% 2.1% Sideman: Recording 4.3% Live Performance 30.5% Salary 29.8% CD Sales on the Road 12.1% Publishing Royalties 9.4% PRO Royalties 6.2% Publishing Advance 5.6% Record Sales 3.5% TV Royalties 0.4% Producer 0.7% Session Musician 1.5% money.futureofmusic.org/case-studies/
  30. 30. Future(s) for musicians. money.futureofmusic.org/sound-recording-income/
  31. 31. Data memos and financial case studies money.futureofmusic.org/findings/
  32. 32. Kristin Thomson | Future of Music Coalition @future_of_music @kristinthomson

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