Wake-Up Call

Trying to make sense of a changed music industry after a 25-year absence.

I am a Rip Van Winkle of the music world. When I quit my band in 1995, I fell asleep—metaphorically speaking—in my creative life. And just as Washington Irving’s character rediscovered his changed world upon waking after 20 years of slumber, the music world I awoke to as a middle-aged person was not the one I knew in my 20s. Not by a long shot. But while most musicians I know had encountered sweeping changes in the music business incrementally, I ran into them all at once. It was a stark contrast.

Before nodding off in 1995, there was a music industry. I know because I spent the first half of my 20s striving to become a part of it.

I moved to Richmond because of a band in January 1992. That band, Schwa, had started in Virginia Beach, but our bassist, Michael Hearst, lived in Richmond where he was a VCU music student. I followed Mike west on I-64 a year after he’d moved here. We were part of what I now think of as the uncool segment of the Richmond music scene. It was composed of people who liked spending a lot of time at the library as teenagers. We were sweet, terribly twee and bereft of rock n’ roll edginess. Cool Richmond back then was a good bit darker, harder and more heroin-chic.

Schwa was a starter band. We didn’t always play in time or sing the notes we meant to, and my songwriting back then was horrendously prolix. I can’t help blushing when I recall some of my worst lines (behold: night after night I sang the line, “self-proclamation is not self-abnegation.”) My heart was in the right place, I guess. However good (or bad) we may have been, though, we were earnest about trying to be good. And as particularly uncool people, we were also extremely ambitious.

Back then, you weren’t supposed to want to “make it.” At least not in the world of indie rock. Striving to make it was uncool. But Schwa was operating in the aftermath of Nirvana’s megahit “Nevermind,” and all the country’s little bands like ours believed there were potential record deals out there with our names on them. For a while, we were correct to a startling degree. Back then, A&R people at major labels really did discover bands, write them checks for $250,000, and send them into the studio. I knew people in bands for whom that exact thing happened. Their records are largely unknown now, but at the time it was overwhelmingly tantalizing to Schwa. We wanted that.

One day I came home from class at VCU to a full answering machine. The first message was from a singer we knew from a band in Norfolk. His voice was quavering. “You guys got the Jackpot feature in CMJ,” he said gravely. I don’t think I knew what CMJ was. I probably had to call someone and ask. It was The College Music Journal, more-or-less the Pitchfork of its day. The Jackpot column was exactly what it sounds like. Bands featured there had won the proverbial jackpot. Mike and I used to mail our tapes to any organization so much as vaguely associated with the music industry. My guess is that the address for CMJ was on a list we saw somewhere. We’d won the jackpot in a lottery we barely knew we’d entered.

The messages after the singer’s on my answering machine were all from A&R reps at major labels. Sony, The David Geffen Company, Warner Brothers, that kind of thing. “We’re interested. Send us your stuff.” So we sent them tapes. Some passed immediately. Others asked for more material. We borrowed money and recorded another demo. We sent the new material to the labels who asked for it, and they all passed. Sad trombone!

Schwa had a few other close encounters with career success. We wound up with a manager in Athens, Ga. and we once turned down a record deal with a label because it seemed even shadier than most. Our video placed second in an unsigned band contest on NBC’s “Late Night with Conan O’Brien.” (Watching it now makes me feel like a goon—it’s like looking at your goofiest middle school yearbook photo). SpinArt Records released a 7” vinyl single; we’d changed our name to the anodyne “Fashion Central” by then—a story for another time. All along, an A&R rep from Atlantic seemed to haunt us, alternately expressing interest and never returning our calls. My point is that back then, a model existed for the monetization of music. That model made some people wealthy while giving many more a stable middle class existence.

I burned out and quit the band in 1995, and my long slumber began.

A changed world

I had a long, weird dream while asleep. In it, I moved around between Richmond and DC. I worked jobs that felt alien to me, like I was playing a character on a TV show that I didn’t like very much. In any case, I wasn’t involved with music in any meaningful way. When I finally woke up, it was into a very different world. It seemed as if there were perhaps no such thing as the music industry anymore, at least not any form I recognized. I had fallen asleep in a world where music was bought and sold in units (albums) that cost around $12. Music fans bought them at stores. Record labels and the artists they represented shared the profits. And even though the system was never great — many artists got ripped off by label executives and other grifters — overall, that system let musicians carry on with making music.

The following is a summary of the changes I noticed as I yawned and stretched and tried to wake up with a gallon of coffee. Facts and figures below are of the back-of-the-envelope variety, intended to illustrate vast disparities in broad strokes. I do not maintain that the arithmetic is exact. My hope is that it illustrates the huge scale of the changes.

I should note that most musicians already know all of this. Some may find my reactions to the changed landscape overly reductive—or even comically naive, like a caveperson gaping at the sight of an airplane. That’s okay with me. I am long accustomed to playing the fool; but in discussions with non-musician friends, I’ve found that most music listeners—from the most casual to the most die-hard fans—seem unaware of the profound effects these changes are having on our shared musical culture. Without wider public awareness, I’m afraid we’ll remain stuck in a system that isn’t working.

How the old way worked

Maybe you’ve heard musicians complaining about how streaming services like Spotify have screwed everything up for them. And maybe when you’ve heard those complaints you’ve thought to yourself, “Cry me a river already! So what if musicians can’t get rich anymore? I can’t get rich from my job, either.” That’s understandable, but it misses the much broader change that’s taken place, which is this: Apart from the most visible and well-paid musicians (Taylor Swift, say), almost nobody is earning enough to afford even a lower-middle-class existence from music anymore.

Permit me a digression into a little armchair history. These are just my observations, the kinds of things I muse over on a long drive. But here’s a sketch of how it used to work.

“I’m not writing to bemoan the loss of this old way. It’s over. What’s done is done, spilled milk. I try to accept reality instead of bargaining with it. But I want you to know where the music we grew up on came from. There was a business model that made it possible, and that business model is gone.”

Until the last two decades of the 19th century, when you heard music it was because you were within earshot of a musician. Try to imagine that: There was zero music unless you were in the presence of it being made. I find it hard to fathom what that was like. The phonograph was invented in 1877. Before it, there were only the sounds of nature and human activity.

From the dawn of time until relatively recently, if you made your living as a musician, you were probably either on the payroll of an aristocrat or the church. There were high-art amateurs who performed composed music in the parlors of the wealthy, and there were folk musicians who played for gatherings of regular people. That’s more-or-less it. In any case, professional music was not the province of the world’s Bob Dylans. Poetry, personal writing and music were generally separate endeavors. There weren’t quite singer-songwriters in the way we think of them now.

The sale of recorded music as a business enterprise may seem like the natural state of things because it’s been there our whole lives, but that is an illusion. It can be a hard one to see past.

Here’s a sketch of how that business enterprise worked. Companies formed to identify talent and market music. They sent scouts all over to find musicians who made music they thought they could sell. They engaged those performers in exclusive contracts granting the companies the rights to record and sell the music the artists made. In return for signing such a contract, the musician was given a lump-sum payment (an “advance”) ahead of the recording project and a share of profits once the music began to sell. Typically, the performer didn’t start seeing those profits until after the company recovered the amount of the advance. The money songwriters and performers earned from recordings came from profits, unless sales of the album generated an amount less than the advance, in which case, the company ate its loss. Revenue generated from licensing deals, touring and merchandise were usually beyond the scope of recording contracts.

Even when musicians were earning only 14% of the profits from album sales, many were able to pay their bills. For working musicians—non-superstar acts—royalty rates in the range of 14% to 18% were common. Again, I’m talking about working musicians, not just superstars. Imagine 20,000 copies of an album selling for $12 each. That’s a gross of $240,000. This would not have been a big hit in the old model. (For reference, a “gold record” is one that sells 500,000 copies.) But 14% of $240,000 is $33,600. Combined with other revenue streams (live performance, a separate royalty derived from radio play, the sale of shirts at concerts) that was enough for working musicians to pay rent and keep the lights on.

The old way is gone. This is chaos.

That old way is gone, though. Streaming has taken its place. The $10 you pay for a monthly Spotify subscription gives you instant access to 80 million songs. Let’s say that the average album has 10 songs on it. That means that via Spotify, you can listen to any of 8 million albums whenever you want (80M songs / 10 songs per album = 8M albums.) Imagine that you’d paid $12 for each of those albums. Buying 8,000,000 records would’ve set you back $96,000,000. I find it hard to visualize the huge scale of that difference.

But wait, there’s more. You might think that the $10 per month Spotify takes out of your bank account is directly apportioned to the artists you listen to. So if you only listen to, say, Timothy Bailey & the Humans (my current band), you might think that we get most of your monthly fee—less Spotify’s admin costs. But that is not what happens at all.

Spotify aggregates all subscription revenue. It computes the percentage of total plays represented by the artists on its platform. Then it allocates payouts by those percentages. So if Taylor Swift gets 99.9% of overall plays on the service, and Timothy Bailey & the Humans get .1%, Taylor Swift gets $9.99 of your monthly fee whether you listened to her or not. And Timothy Bailey & the Humans get $.01.

Actually, it’s worse than that. The reality is that most musicians on streaming services don’t even see that much. I recently heard a story of a well-known independent artist with a sizable following receiving $80 for 300,000 streams. Not that long ago, when singles could be purchased for $.99 on iTunes, 300,000 sales would have yielded a $300,000 gross. Okay, all of these cocktail napkin calculations have their problems, and people could reasonably argue that I’m fudging some details. But do the details matter when the scale of difference is this vast? Just look at the comparisons. $96 million (access to 8 million albums) vs. $10 per month (for the same stuff). $300,000 (for 300,000 sales of a single) vs. $80 (for 300,000) streams.

I’m not writing to bemoan the loss of this old way. It’s over. What’s done is done, spilled milk. I try to accept reality instead of bargaining with it. But I want you to know where the music we grew up on came from. There was a business model that made it possible, and that business model is gone.

There are exceptions. Once every blue moon a new independent artist gets signed to one of the still-extant record labels with enough resources to make a difference for that artist. But again, we’re talking about single record deals here and there—and they’re big news in the music community when they happen. They do not constitute the churn of an actual industry. These exceptions give the public (not to mention hopeful musicians) the false sense that the old system still exists in a meaningful way. That is another illusion.

To be sure, record companies still exist. There are three major labels—Sony Music, Warner Music Group, and Universal Music Group. They underwrite the work of the pop stars whose names you know. They’re rumored to negotiate favorable deals with the streaming services ensuring that those pop stars get the lion’s share of streaming payouts. And yes, there are still independent record labels. But most are the curatorial hobby projects of one or two people. They’re music lovers fighting the good fight.

These days, most small labels do not often possess meaningful resources that musicians cannot just access themselves. There are exceptions here, as well. A small handful of independent record companies remain that can actually help musicians. I cannot imagine the deluge of desperate pleas for their attention they must receive every hour of every day! These companies still exist because they came of age before streaming, are run by smart people with integrity, and own a stake of copyrights in already successful catalogs. Accessing them is exceedingly difficult. I know people who know them, and I can’t get in touch.

A fool’s errand

As I came-to in this new world, I thought maybe I’d have luck with the old way of being a musician and making records. I looked at the various indie labels putting out good music. I thought maybe I’d eventually connect with one of them. Once my band’s debut album was finished, we tried to interest some of them. But the longer that went on, the more I began seeing behind the curtain—the companies I was interested in barely existed in a fiscal sense. They had virtually no money to pay for recording music, manufacturing physical products, and distributing it for sale. They would not be in a position to actually help us. The reason they have no money is simple: almost nobody buys music anymore. Like every other musician not working with one of the remaining financially viable record labels, we were on our own.

So I begged and borrowed to raise the funds that paid for the recording of our debut record. I managed the entire process the old-fashioned way, paying for recording in a professional studio with a professional engineer. I worked with the best co-producers I could—and that was only possible because of existing personal relationships. I paid the fees for a well known mixing engineer and one of the best mastering engineers on the planet. We’ve avoided further costs by doing all the PR associated with an album release ourselves. I’m paying for the initial LPs with money from pre-sales and won’t make a cent until we’ve sold almost the entire run.

In short, I have functioned as the record company throughout.

This has been a fool’s errand. Don’t get me wrong—I’m glad to have done it…once. But surely you can see that spending over $10,000 on something like this—when it will never return anything like that amount of money—is a hilariously bad business idea.

As a result, the first Timothy Bailey & the Humans album could be its last unless we dramatically reduce the recording quality of the material we release or unless some other source of funding materializes. The larger point is that my band is not alone. This is the normal situation these days. Your $10 Spotify fee will continue to grant you access to everything that’s been recorded thus far. But new, high quality recordings will become increasingly rare. Bands like mine will stop making records. Name a currently working musician (whose work you love) who is not supported by a major label or one of the handful of robust independents still operating. That person’s output is likely to grind slowly to a stop.

A new way forward

It’s not like we’re giving up, though. A lot of us are still out here hustling. We reach out to music supervisors in the film and advertising industries to seek licensing deals for our music. Personally, I find it depressing that we have come to think of having our songs used in truck commercials as “success,” but sometimes there’s real money there.

We sell digital downloads and physical albums of our work on Bandcamp, perhaps the only shining beacon of fairness and decency online where artists are still compensated fairly. You can find our music on the streaming sites and on YouTube, and some of us do what we can to get our work onto influential playlists in the hopes of being noticed by the almighty algorithms. So I don’t contend that there is no way forward. It’s just that the old way—the business model for recording and distributing music that characterized musical culture for the past hundred years—is gone.

As mentioned earlier, nearly all musicians know this. So far, though, very few fans seem to understand the scale or the implications of these changes. When I first awoke from my long slumber, I did not understand any of this. Many of my musician friends couldn’t see the changes as starkly because they’d suffered the indignities step-by-step, not all at once like I did. My impression is that new music that is both recorded well and distributed widely is vanishing. The music world we knew our whole lives is going away, if not gone already. The era that began with the invention of the phonograph and manifested a “music industry” during the 20th century appears to be over, may it rest in peace.

Music itself will be fine. I don’t worry about that. Above the surface, big money will increasingly drive us toward the same kind of monolithic culture that mainstream films have devolved into. But below the surface, music will fortify itself and branch like a great fungus. Right now, it’s anyone’s guess what new system will emerge to fund the high quality recording and distribution of the future’s music. When that system begins to emerge, I suspect it will be characterized by the absence of intermediaries like record companies and streaming services. I hope so.

I hope it features direct relationships between artists and the communities they serve, perhaps through monthly band subscriptions. The record business is basically the publishing business … but for music. The publishing business is more mature than the recording business, and it moves to new platforms before music catches up. Right now, the publishing business is moving towards subscriptions offered directly by creators to their audiences. I believe the recording business will follow.

When this new way arrives, maybe we’ll look back at the old one and think, “good riddance!” In any case, this time I plan on remaining awake to see what happens.


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