Nicki Minaj performs during MTV's 2015 Video Music Awards
Last night, people across the entertainment industry gathered to honor accomplishments in music on a network that doesn't play music anymore. MTV's 2015 Video Music Awards are like every other televised awards program. Beyond the variety show and contest winner aspects, it's a three-hour commercial to build interest for products. And to that end, the VMAs, the Grammys, and the Billboard Music Awards are predicated on the possibility of the audience seeing something unique that will get retweets, as well as on manufactured media stunts that will get people to download tracks on iTunes. In the past, winners and performers at the VMAs have seen huge increases in sales following the broadcast. To that end, this year's host, Miley Cyrus, was posting nude selfies on Instagram before the event, and announced the release of an album during the show. Predictably, her wardrobe and actions are at the center of many of the headlines that came out of the show.
Kanye West won the Michael Jackson Video Vanguard Award and declared his candidacy for president in 2020. Justin Bieber floated over the crowd in a Jesus pose and then cried like a baby. Taylor Swift and Kendrick Lamar won Video of the Year for "Bad Blood," while Swift also moved on from her Twitter beef with Nicki Minaj, as the two performed together on stage. Minaj won Best Hip Hop Video for "Anaconda," while also getting into what may or may not have been a real argument with Miley Cyrus during her acceptance speech. The source of the latest spat: comments Cyrus made calling Minaj "jealous" and "disrespectful" for critiquing MTV's lack of diversity. And all of this seems to have overshadowed discussions of the winners, and even some elaborate performances by The Weeknd, Demi Lovato, Pharrell Williams, and Macklemore & Ryan Lewis.
However, all of the stunts, feuds, and wardrobe malfunctions mask a financial situation in which the music industry overall has been gutted while some longtime issues of fairness and equality have persisted. Over a period of less than two decades, annual global revenue for recorded music has declined by more than 50 percent. This is largely due to the inability of the industry to transition in the internet age, as it fought a futile battle to stop music piracy and flailed around to create a productive business model when CDs went to digital downloads. Now the problem has been compounded as digital downloads have begun to decrease in favor of streaming options like Spotify and Apple Music. And as this decline has continued, this is still an industry where artists are nickel-and-dimed out of profits by their labels, and women in the scene are treated with misogyny and sexism.
Continue reading for more on why the music industry is dying.
One argument is that the music industry has a problem selling the idea that its product has value. This is probably a vestige of a time in the near past when customers were sold CDs for $15.99 that had two listenable tracks, and a bunch of garbage filler surrounding them. But we live in a world where a good many people buy little bottles of water for about $7.50 per gallon when they could drink out of a fountain, or the tap. There's been debate over whether $10 per month is too high of a charge for unlimited music streaming, when people can search the web and probably find a decent copy of a track for free.
- The amount of music being created and made available to the populace has never been greater: It is by no means easy to make it big as a pop star. But at no other point in history have avenues for artists to release their material and get it noticed been as numerous. There are thousands of tracks and videos on SoundCloud, YouTube, Vine, and Twitter where someone set up a camera phone and did a cover, or performed their own music. Sometimes it's great and sometimes it sucks, but it's proof enough that with the viral nature of social media, it's possible for someone to get their name and face out there and build a fan base. No longer is it limited to going to a club and performing an amazing set.
- However, it's harder to be different in the age of algorithms and metadata: The reason a lot of today's pop hits sound the same is because music labels have used the algorithms from Pandora and Shazam to shape what they think the audience wants. The result is a process that can better gauge what the audience is listening to, but research indicates it also shapes listening patterns as well. Two research studies found that people's taste in music is influenced by knowing whether or not other people like it, and consumers were more likely to download a song if they thought it was a "hit." It should be noted that streaming services claim their algorithms can be used for political campaigns. Political advertisments are run on Pandora, since Pandora claims it can predict with "75-80 percent accuracy" how an individual will vote based on age, location and music preference.
From Derek Thompson at The Atlantic:
Songs that weren’t label-picked singles, like the Black Eyed Peas’ “My Humps” in 2005, began outperforming the tracks that executives expected to do well. “Deep cuts”—songs that labels didn’t hype but that fans nonetheless loved—used to fly under the radar. (There is no evidence that Led Zeppelin’s “Stairway to Heaven,” one of the most famous rock songs of all time, was ever played on the radio in the years immediately after its release, and it never cracked the Hot 100.) But because the industry can now track what people are listening to, any song that catches on can become a hit.
Everyone I spoke with about the Hot 100—label and radio executives, industry analysts, and other journalists—agreed with Jay Frank’s assessment that consumers have more say than they did decades ago, when their tastes were shaped by the hit makers at labels. But here’s the catch: if you give people too much say, they will ask for the same familiar sounds on an endless loop, entrenching music that is repetitive, derivative, and relentlessly played out.
- The top 1 percent of bands and solo artists now earn about 80 percent of all revenue from recorded music: Since most of the top hits stay on the Billboard Hot 100 chart for months at a time, the revenue is concentrated among a small group of artists. The result: 77 percent of revenue is concentrated with the top 1 percent of music acts. Given that labels aren't taking as many chances as they used to, it leads to homogenization. As with the larger issue of income equality in the greater economy, while there's more music and more artists, the ability to make a living as a musician is not as sexy as it might seem if you're not in that 1 percent. There are well known and popular indie acts that struggle to pay their bills.
- Even if you're in the top 1 percent, it doesn't mean you're getting paid fairly: Here's something most people don't understand about the music industry: Unless you're big enough to tour, you're probably not going to make piles of Scrooge McDuck cash. Having a hit record is better than not having one, but the record company will charge almost every cost of marketing and production for the album to the artist. If there's a music video for a hit single, a significant percentage of the cost is carried by the artist and taken from the artist's cut of proceeds or royalties. In fact, it is all together possible for an artist to have a hit record, not get a dime of royalties, and be in a position where they actually owe money to the record company. Lyle Lovett has sold millions of albums, and claims he's never seen a dime from it. Then there's the nebulous math that surrounds royalties, publishing, producing, and performance rights. For example, in the old days the label would sell those $15.99 CDs and give the artists around a $1.00 cut from each one. The royalties from streaming services like Spotify and Apple Music are based on agreements between the labels and streaming services whose terms are protected by nondisclosure clauses. Since there's no transparency to those agreements, the artists are negotiating their deals in the dark. Pharrell made less than $3,000 in songwriting royalties and $25,000 for performance rights for 43 million Pandora streams of “Happy.” The equation for royalties seems to be that a million plays translates to approximately $60 in publishing royalties.
From David Byrne in the New York Times:
Perhaps the biggest problem artists face today is that lack of transparency. I’ve asked basic questions of both the digital services and the music labels and been stonewalled. For example, I asked YouTube how ad revenue from videos that contain music is shared (which should be an incredibly basic question). They responded that they didn’t share exact numbers, but said that YouTube’s cut was “less than half.” An industry source (who asked not to be named because of the sensitivity of the information) told me that the breakdown is roughly 50 percent to YouTube, 35 percent to the owner of the master recording and 15 percent to the publisher ... Putting together a picture of where listeners’ money goes when we pay for a streaming service subscription is notoriously complicated. Here is some of what we do know: About 70 percent of the money a listener pays to Spotify (which, to its credit, has tried to illuminate the opaque payment system) goes to the rights holders, usually the labels, which play the largest role in determining how much artists are paid. (A recently leaked 2011 contract between Sony and Spotify showed that the service had agreed to pay the label more than $40 million in advances over three years. But it doesn’t say what Sony was to do with the money.)
The labels then pay artists a percentage (often 15 percent or so) of their share. This might make sense if streaming music included manufacturing, breakage and other physical costs for the label to recoup, but it does not. When compared with vinyl and CD production, streaming gives the labels incredibly high margins, but the labels act as though nothing has changed.
- People don't buy albums anymore . . . and they're not downloading tracks as much either: The music market of the 21st century is mostly based around the popularity of individual tracks, with iTunes being the biggest music seller. But even sales of digital downloads have been going down. Since 2013, digital music sales have been falling as the popularity of streaming services has increased.
- Events and advertising: Because of these different digital transitions, the industry is basing its models more on advertising rates connected to streaming, and the uniqueness of live events. That's the reason why the prices of concerts, tours, and festivals have been rising, and it costs a small fortune to go to Coachella and Bonnaroo.
- Like their radio predecessors, streaming services can also be influenced by pay for play: If a song and artist's popularity is tied to the perception of their popularity, being added to a streaming service's playlist can make a difference in making it a hit. Therefore, paying to have songs added to playlist (a.k.a. payola) can be part of an overall strategy of creating a successful track.
From Glenn Peoples at Billboard:
According to a source, the price can range from $2,000 for a playlist with tens of thousands of fans to $10,000 for the more well-followed playlists. And these practices are not illegal, although it would be difficult to find an official policy in the fine print. "For a while, Spotify didn't take a view" on such tactics, says one major label executive. But the company has taken a stand against commercializing accounts and playlists by rank-and-file users. In a statement to Billboard, Spotify head of communications Jonathan Prince says its new terms of service, hitting the United States next week, prohibit selling accounts and playlists or “accepting any compensation, financial or otherwise, to influence ... the content included on an account or playlist.”
Yet policing, let alone enforcing, these terms could be difficult. Spotify can investigate when allegations arise, and in the case of violations, delete a playlist or remove the user from the service. But there are loopholes. DigMark, for example, believes it operates within Spotify’s rules because it pays a small amount -- typically $100 to $150 -- to tastemakers on a “consultancy” basis, not for placement of specific songs, according to a UMG source with knowledge of the business. The payment is meant to ensure that the playlist creator hears and considers DigMark clients’ music.
- The industry has a problem with sexism: Beyond just arguments over the imagery in music videos, the women working behind the scenes in the music industry have horror stories over how they have treated differently and disrespected, just because they lacked a penis. Journalist Jessica Hopper made news last week when she posted a tweet asking women in the industry to recount what they've experienced. The resulting responses were not pretty.
From Annie Zaleski at the A.V. Club:
Hopper’s been diligent about retweeting responses to her initial tweet, and cumulatively, they paint a picture of an industry where anyone who’s not a straight white man is belittled for even existing. This oppression isn’t limited to music writers, either: Musicians, booking agents, publicists, venue workers, tour managers, and photographers relayed harrowing stories about being treated like girlfriends and groupies rather than competent workers; having their knowledge and expertise demeaned by others; being hit on by everyone from colleagues to band dudes they’re interviewed; and even being raped.
“Imagine how many women, queer kids, POC might stick around scenes, industry, journalism if they encountered support not hostility,” Hopper tweeted at one point—and, reading example after example of infuriating and inappropriate behavior on her timeline, it’s hard not to agree 100 percent.