Microscopic royalties and the golden age of CDs

Damon Krukowski of Galaxie 500 and Damon & Naomi caused a bit of controversy last week by writing an article about the meager royalties fees paid out to artists by streaming sites like Pandora and Spotify.  Some people got worked up over it, told him to stop whining and go on tour if he wants to make money, and writers like Maura Johnston penned rebuttals to the rebuttals.

Like with most mini-controversies, this one is less of a big deal than it's been made out to be.  First of all, Krukowski wasn't really railing against the current state of things.  Obviously he wouldn't object to pocketing more money each time someone streams one of his songs, but he wasn't using his article to say "pay me" either.  He didn't say that he was against the streaming sites -- I'm sure he gets his time and money's worth from his Spotify subscription.  His concluding point, after having run through the math to justify his position, was that he'd accepted the fact that he wasn't ever going to earn significant money from streaming his songs.  That's why he's offering his own streams completely free of charge.  He's never going to be able to buy much more than a six pack of beer from his streaming royalties, so why not just give the music away for free through his own site, increasing his web traffic and giving fans easier access to his music all in one shot?

Artists are earning a pittance but the streaming sites are losing a small fortune every year and aren't looking like they'll turn a profit anytime soon.  Krukowski says they "exist to attract speculative capital", i.e. like an overinflated stock, their services/products aren't worth much but the company is.  So if they're not really in the business of music, and are in fact undermining the recording, pressing, and selling of music as Krukowski claims, then how are they worth anything at all?  He doesn't say, but the answer is obvious.  Spotify is worth something for the same reasons that Facebook is -- they're in the business of building databases of information about their users.  The site's actual services are worth very little, but information about their millions of users' listening, purchasing, and social habits are worth a fortune.  It's even quoted right there in Krukowski's article, when Spotify CEO Daniel Ek says that "our focus is all on growth", he's not talking about diversifying the selection of music they offer, it's about growing and diversifying their user base.

Anyway, some people misinterpreted Krukowski's acquiescence as complaining and commented that he should tour more rather than trying to make a living off selling records and CDs.  That's easier said than done, no question about it.   Organizing a tour is a lot of work, there are plenty financial risks involved, and I can't disagree with anything Maura wrote.  But these aren't the real issues here.  The core of the debate is no different from the David Lowery/Emily White spat from several months ago, and my opinions on that haven't changed.  Music is a high risk, high reward business, and not everyone living in every city in the world will be able to make a living off it.  That's the way it's always been, and that's the way it always will be.  Trying to reconfigure the industry so that bands can see an increase in revenue for doing the same work isn't financially viable.

I agree that it's not a fair industry in that artists have always had to accept the short end of the stick in their battles with record company management.   But the digital/streaming genie isn't going back in the battle, and I've never understood what musicians' long term plan is supposed to be to combat that.  Of course musicians want to be better compensated for their work, so what's their proposed solution?  Should albums cost $20-25 again, like in the early days of CDs?  Do artists need to pursue more liscencing agreements with TV shows and advertisers in order to subsidize their music careers?  What about more government support for musicians, possibly in the form of arts grants?  Lowery chatted to The Awl a free months ago, complained about the state of things, said that musicians should be able to support themselves, and suggested no solutions for doing anything about it.  When the Amanda Palmer/Kickstarter experiment was brought up he basically ridiculed it.  I'm not going to get into the Amanda Palmer thing here, but at least she tried doing something a bit different, something that circumvented the usual revenue streams.  

If this post hasn't depressed or frustrated you too much, now it's time to take a break and relive the glory days of the CD by celebrating it's 30th birthday with Pitchfork. Enjoy the nostalgia, and try not to dwell on all the money you invested on overpriced CDs!