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Comment by TallGuyShort | Hacker News Reader

They keep talking about "the industry", but I don't think anyone's been saying the entire industry was being killed. It's the recording companies that have been complaining, and yeah - their orange line doesn't look too healthy. As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?

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"As I understand it, most of the money for concerts and other distribution channels is going to the musicians themselves and newer companies. Am I mistaken here?"

Historically, yes. Labels generally had very little to do with concerts.

These days, a lot of artists are signing "360 deals", which means that the label receives a cut of basically all the artist's revenue streams, including touring and merchandise.

http://en.wikipedia.org/wiki/360_deal

A (hopefully) smaller cut of everything instead of a large cut of specific revenue streams seems like it might encourage better record company behavior. Rather than highly promoting specific sections of the revenue stream to the detriment to others (overplaying on the radio causing lack of interest before the tour is done, etc), a more holistic approach may emerge, which better benefits all parties.

I have a few friends in pretty successful bands, and most of them (and other artists they know) tend to have a pretty negative view of the 360 deal.

My impression is that it's generally considered to be the only option in most cases. In certain segments of the music industry, major labels are still basically the gatekeepers. Wanna be the next Modest Mouse? Fine. You can put a few records out on a small indie label and do pretty well. Wanna be the next Taylor Swift? You pretty much need a huge label like Universal. The discovery channels for certain types of music are a lot narrower. If you're an aspiring pop singer, you need pop radio. And you won't get it without major label backing.

So the labels have the power to basically say "Here's the deal we're willing to offer. You can take it or leave it". Most artists would probably be better off keeping the majority of their touring profits (since, along with licensing, I think that usually tends to be the biggest source of income) -- but if they're stuck between a bad deal and no deal, a lot of artists will take what they can get.

I like the analogy made elsewhere in the comments about labels being like VC firms. By the same token, you don't think you need a VC firm/record label unless you plan to go big and go quick. Macklemore and others have shown that there is another path, even if it's not common (yet?). Just because we are used to teenagers and early twenty-somethings being blown up to huge proportions doesn't mean that's the best path. I imagine a world where artists slowly gain traction and following as they refine their art as a better place.

>If you're an aspiring pop singer, you need pop radio. And you won't get it without major label backing.

Adele's mega success is absolute proof that this is not true. Her label, XL, is a true independent and ushered her to multiplatinum status.

I think the bit that is very galling to everybody that works on the ground floor of the industry - that is, the writers, micro-labels, PRs etc that see the artists starting out - is that people keep talking about these majors as if they are the whole industry. The micro-labels, independent and DIY acts are a big part of how the industry works now, especially for new acts versus established ones.

The big labels might have taken a hit, but general consumption patterns have hit smaller artists, venues and labels as bad if not worse, if only because their size of revenue was smaller to begin with.

It does seem a bit disingenuous to show that graph and completely gloss over portion of the graph describing how the record companies are (apparently) making half as much as they used to.

To be clear, I don't think that's necessarily a bad thing. At this point I think the record companies can be viewed as quite a bit more parasitic than they could have been in the past. Not because they've changed, but because the ecosystem has changed to provide much of what they offer in alternative, cheaper ways.

I don't think it's disingenuous at all. It's a reply to their decades-old claim¹ that piracy is killing music.

Disingenuous is the implicit assumption in their argument that music and the music industry is all about them.

¹ http://en.wikipedia.org/wiki/Home_Taping_Is_Killing_Music

I agree the record companies haven't been very forthright, but I don't think that's an excuse for how this was presented.

I think in a link that consists of a few paragraphs and a big graph showing revenue over time, if the revenue for every segment except one is going up, but that one segment goes down enough to cause the aggregate to go down, that deserves mention.

To me, the topic is loaded enough and the case obvious enough that the omission looks purposeful. I applaud the goal of the article, but I can't do the same for the method.

Half of the decline on the orange line can be accounted in purchases from streaming/phone market. Reading the original report, I don't see them saying that "the industry" isn't getting a part of the online revenue.

Newer record contracts often require a significant split of concert/endorsement monies. I don't know if 'most' of the money goes to artists or record labels under these new contracts... I would guess that the artists get much larger percentage of concert/endorsements than raw record sales.

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