Yet Another Study Shows Musicians Making More Money

from the well,-look-at-that dept

Wed, Sep 15th 2010 9:11am — Mike Masnick

We've made the argument repeatedly that saying unauthorized file sharing is hurting the music business lacks evidence. Instead, what we've seen, over and over again, is that more money is pouring into the music business, more music is being produced and (most importantly) that more musicians who embrace this new world are doing better than they would have otherwise. Now, we've pointed to research in the UK, Sweden and the US that have all shown aggregate growth for the music business, with some of the numbers suggesting more money going directly to musicians, rather than gatekeepers.

The latest study, highlighted by TorrentFreak takes a similar look at the Norwegian music market to show very similar findings and (of course) that musicians are, indeed, benefiting:

Like the UK and Swedish studies, this study, covering Norway, found that the aggregate amount going to the industry is up slightly (4% in real terms), mostly thanks to live shows more than making up for the decline in music sales (it's important to note that these researchers appear to have modeled their research on both the UK and Swedish studies, and made only slight changes, which they explain (and justify) in the report. The key finding is that musicians appear to be making significantly more these days than in the past:

Total artist revenues have gone from NOK 208 million in 1999 to NOK 545 million in 2009, which is an increase of about 162%. Excluding state subsidization, the income from 1999 to 2009 has increased with NOK 229 million, or 147%....

According to this, Norwegian artists have seen an increase in all four of their income sources during the past eleven years. This goes contrary to the common belief that artists have seen a decline in income because of the digitalization of the industry.

The loss of record sales because of consequences of the digitalization of the industry has not affected the Norwegian artists in the same brutal way as it has the record companies. Artists earn in general 20% or less from record sales, and a decrease in record sales would most likely be compensated by an increase in one or more of the other three income sources.

Now, it's worth pointing out -- as I learned when I attended Nordic Music Week last year -- that the Norwegian music industry is heavily subsidized by the government, which is one of the four revenue streams discussed above. However, that only represents about 30% of artist revenue in 2009. The largest single component -- again similar to what we've seen elsewhere -- is live revenue, which continues to grow. Even if you exclude state subsidies, the report found that Norwegian artists doubled their income in the past 11 years:

Adjusted for inflation, total artist revenue has gone from NOK 255 million in 1999 to NOK 545 million in 2009, an increase of about NOK 290 million or 114%. Excluding state subsidizations, the increase has changed from NOK 192 million to NOK 386 million, which is an increase of NOK 194 million or 101% This goes to show that the artists themselves, as a group, have seen tremendous more growth than the industry as a whole.

And, yes, there are more musicians out there to split the pie, but the growth rate in the industry has increased more quickly than the growth in musicians.

Since the total number of artists in 1999 and 2009 are available to the authors, it is possible to calculate an average income from music for artists in Norway. With 3200 artists in 1999 the average income from music would be about NOK 65 000. With 4100 artists in 2009 the average income from music is about NOK 133 000, creating an increase of NOK 68 000 or 105%. Adjusted for inflation the income has increased with from about NOK 80 000 to NOK 133 000, an increase of NOK 53 000, an increase of 66%.

Overall, the results, like those in Sweden and the UK, seem to clearly debunk the repeated claims from recording industry folks (and some musicians) that artists are somehow suffering under this new setup. Now, there may absolutely be cases where artists who fail to adapt are struggling, and there's no doubt that some labels that failed to adapt are struggling -- but there's increasingly little evidence that the overall music industry or artists as a whole are suffering. All of the evidence seems to suggest that it's not file sharing that's a problem at all. More money is going into the music business. The only problems are from those in the industry too stubborn or too clueless to adapt to capture the money that's flowing in.

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Filed Under: music, norway, revenue

28 Comments

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Anonymous Coward, 15 Sep 2010 @ 9:28am

i want my money back
it all sucks
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Albert Pine, 15 Sep 2010 @ 9:34am

Ah, but is it really going to the artist?
My understanding is that this accounting doesn't really approximate the money that's reaching the artist. It's just that the band is nominally the entity scheduling the concerts, but the recording company is the one that's selling recordings. The difference is where the costs go. In the concert, the band nominally pays for renting the hall and everything else. In the recording, the company does it. Now this isn't always the case and sometimes it's the reverse, but my understanding is that the bands may gross huge amounts on their concert tours, but the expenses often eat most of it up.
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Mike Masnick (profile), 15 Sep 2010 @ 9:38am

Re: Ah, but is it really going to the artist?
My understanding is that this accounting doesn't really approximate the money that's reaching the artist. It's just that the band is nominally the entity scheduling the concerts, but the recording company is the one that's selling recordings. The difference is where the costs go. In the concert, the band nominally pays for renting the hall and everything else. In the recording, the company does it. Now this isn't always the case and sometimes it's the reverse, but my understanding is that the bands may gross huge amounts on their concert tours, but the expenses often eat most of it up.

If you look at the report, it does make an effort to specifically count the money that actually goes to the artist.
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John Doe, 15 Sep 2010 @ 10:19am

I know this isn't germain to the point of your article...
...but how do I get the government, any government, to give me a 30% raise?
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John Doe, 15 Sep 2010 @ 10:28am

Re: Ah, but is it really going to the artist?
If the bands gross huge amounts of money but spend it all, then that is bad business on their part.
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Mike Masnick (profile), 15 Sep 2010 @ 10:28am

Re: I know this isn't germain to the point of your article...
...but how do I get the government, any government, to give me a 30% raise?

Move to Norway and play music.

Actually, you should move to Norway and make movies. One of the things I learned in Norway was that the gov't covers 50% of the cost of all movies made there. Crazy.
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Eugene (profile), 15 Sep 2010 @ 10:33am

Ugh I hate stacked graphs. But why does it look like the government subsidies are the largest factor in the graph, when they're only a 30% contribution as explained in the article?
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Michael, 15 Sep 2010 @ 10:33am

Re: I know this isn't germain to the point of your article...
In the US, you simply have to stop working or attempting to find a job. Then, you get free food, healthcare, rent, and some spending money.
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Chronno S. Trigger (profile), 15 Sep 2010 @ 10:42am

Re:
You're reading the graph wrong. The top section is less then a third of the total.
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Anonymous Coward, 15 Sep 2010 @ 11:01am

Basically the Norwegian music industry consist of A-Ha, plus a few scruffy guys who play "Yesterday" on the guitar by the bus stop. That tends to skew the statistics a bit.
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Eugene (profile), 15 Sep 2010 @ 11:08am

Re: Re:
Wait...so each line is measured relative to the height of the line below it? Amazing. It suddenly makes even less sense to me.
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Mike Masnick (profile), 15 Sep 2010 @ 11:42am

Re:
Basically the Norwegian music industry consist of A-Ha, plus a few scruffy guys who play "Yesterday" on the guitar by the bus stop. That tends to skew the statistics a bit.

Could you possibly be any more condescendingly wrong? You should do some research into the Norwegian music industry. Then admit that your statement above is one of massive ignorance.

While you're at it, are you also going to claim that both the UK and Swedish studies that found the same thing have similar music industries? You do know that the UK and Sweden are the 2nd and 3rd largest exporters of music, right?

Ah, but why bother with facts when you can dismiss such pertinent information with ignorance?
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Richard (profile), 15 Sep 2010 @ 12:31pm

Re: Re: I know this isn't germain to the point of your article...
but how do I get the government, any government, to give me a 30% raise?

Move to Norway and play music.

Unfortunately this strategy doesn't work - have you seen the cost of living in Norway?
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Anonymous Coward, 15 Sep 2010 @ 12:33pm

Re: Re: Re:
The line is measured relative to the height of the stack. The height of the purple is 1/3 the total height of the stack.
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Suzanne Lainson (profile), 15 Sep 2010 @ 2:38pm

It would help to have more info than averages
We don't know how the money is being distributed per artist. Other studies have shown that the major artists have benefited more than those at the bottom.

This came out today which shows what has happened in Australia.

Mixed Results For Live Biz Down Under: "Australia's live entertainment circuit made more money in 2009, but sold fewer tickets. And the cost of going to concerts continues to rise."
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herodotus (profile), 15 Sep 2010 @ 2:45pm

I often wonder if these numbers would change significantly if they added income from sample libraries. Many of the sample companies that I have worked with are (like my own company) owned and operated by musicians. I myself have made more money off of sample libraries than I have made playing live.

Musical activity on the internet is much more diversified than most people realize.
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Benjamin Inman, 15 Sep 2010 @ 3:32pm

Great Observation
The reality is that the dynamics of the industry are changing, that's no secret. Artists will have no more advantage than before, due to the overwhelming amount of choices each consumer is now faced with.

There will be just as much need as ever before for artists to have a support system to oversee marketing, licensing, administration, etc. Whether that support system is through a traditional label or an indie label, the system MUST be in place.

Regards,

Benjamin Wade Inman
Lollipop Records
Nashville, TN
www.lollipoprecords.com
http://twitter.com/lollipoprecords
http://www.myspace.com/lollipoprecord ings
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Anonymous Coward, 15 Sep 2010 @ 4:19pm

Re: Great Observation
. . . the system MUST be in place.

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back." - Robert A. Heinlein
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PaulT (profile), 16 Sep 2010 @ 4:03am

Re: Re: Re: I know this isn't germain to the point of your article...
"have you seen the cost of living in Norway?"

Have you seen the return on their invesment?

http://en.wikipedia.org/wiki/Quality-of-life_index

Norway is #3. Not all taxes are bad, if you actually get what you pay for.
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jc (profile), 16 Sep 2010 @ 6:13am

Re: Re: I know this isn't germain to the point of your article...
Yeah, that's totally how it works you stupid troll.
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Anonymous Coward, 16 Sep 2010 @ 7:22am

funny thing about studies and graphs, they all say different things, with the same info, I put no faith in any of them

Basically the Norwegian music industry consist of A-Ha, plus a few scruffy guys who play "Yesterday" on the guitar by the bus stop. That tends to skew the statistics a bit.

really Mike??? Humor 101 fail you again??? oh I get it, he didn't use the sarc mark, so you couldn't possibly read any humor in that at all.....

The only thing Norway can export that I would want, would be more Norwegian women
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Thomboykt (profile), 16 Sep 2010 @ 7:23am

Musicians Making More Money
This is more BS and misleading information. So what if live shows are helping to compensate for the death of the music business. This does nothing for producers, songwriters, engineers, studio owners and the studio musicians who actually make the records. It ALL boils down to revenue from the sale of music. Why is it that every time there's an argument about the music business it's only about the artists. The trickle down effect is what's killing the industry due to lack of sales over all. Again, I have an artist with 60 million youtube views. I have learned first hand that as long as i give it to them for free, they will not buy it, with the exception of 50k singles. Divide up the net profit after iTunes between the artist, songwriters and producers after recouping the costs and we're all still working at McDonalds!
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Anonymous Coward, 16 Sep 2010 @ 8:13am

Re: Re:
Uh, it was a joke, Mike. (Did you miss your mornign coffee yesterday?) Virtually none of your readers (other than those actually from Norway, or perhaps a handful of other nordic countries) will have heard of any Norwegian musicians other than A-Ha. I don't think anyone actually took that comment seriously (other than you), but for what it's worth, Oslo's got a ton of nice jazz clubs.

Even though the previous comment was, indeed, a joke, the part about the unusual nature of the Norway market "skewing the statistics" actually is worth exploring. Norway is both very small (less than 5million) and very rich, and it's also got its own language spoken nowhere else. Its music industry is less integrated into the global music scene than the US, UK, or Sweden. (Or rather, it exports less - it still imports a ton.) So a study about the Norwegian experience doesn't necessarily translate to most other countries. That's not to say that the study is wrong - as you say, it's consistent with the UK and Sweden studies - or useless, since it offers some clues about how musicians can thrive even amidst prevalent filesharing (like, perhaps, focusing on the local market). I'm happy to see Norwegian musicians doing well, and I think the study helps bolster the more optimistic view of the future of the music "industry" that you and I and many other TD readers share.

I'd be interested to see similar studies done on medium-sized markets that aren't so rich, and have larger language crossover like, say, Spain or Portugal.
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catullusrl, 16 Sep 2010 @ 9:27am

Power law distribution with a skinny tail
It's quite possible for the aggregate sum to increase,the average income to increase but the vast majority of musicians to be worse off.

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CE O_Eric_Schmidt_2229

Eric Schmidt: I would like to tell you that the Internet has created such a level playing field that the long tail1 is absolutely the place to be�that there's so much differentiation, there�s so much diversity, so many new voices. Unfortunately, that�s not the case. What really happens is something called a power law, with the property that a small number of things are very highly concentrated and most other things have relatively little volume. Virtually all of the new network markets follow this law.
So, while the tail is very interesting, the vast majority of revenue remains in the head. And this is a lesson that businesses have to learn. While you can have a long tail strategy, you better have a head, because that's where all the revenue is.
And, in fact, it's probable that the Internet will lead to larger blockbusters and more concentration of brands. Which, again, doesn�t make sense to most people, because it�s a larger distribution medium. But when you get everybody together they still like to have one superstar. It's no longer a US superstar, it's a global superstar. So that means global brands, global businesses, global sports figures, global celebrities, global scandals, global politicians.
So, we love the long tail, but we make most of our revenue in the head, because of the math of the power law. And you need both, by the way. You need the head and the tail to make the model work.
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Suzanne Lainson (profile), 16 Sep 2010 @ 9:58am

Collection agencies
One of the things to keep an eye on are income figures put out by the music collection agencies. They want to show that their income is going up (to justify their value to their members), but on the other hand, they collect royalties at venues, live concerts, and radio/streaming which some feel is unfair. So if you don't like ASCAP/BMI/SESAC and the music collection agencies in other countries, you're not going to be happy with their contribution to music industry income. I haven't looked to see what it does to the research, but if it is "bad" income, you don't want to include it in the rosy projections.

Just a thought.
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Thomboykt (profile), 16 Sep 2010 @ 10:30am

A joke?
Do you earn your living from writing and or producing music?
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Michael, 16 Sep 2010 @ 11:33pm

The live music industry
Thank God for concerts, that's for sure. But at the risk of repeating myself, the fact that U2 had a good year live has only a marginal effect on the recorded music industry. It's a well-known fact that new Rolling Stones albums are non-starters, no matter how much they tour. What's more, these major tours only showcase songs by the major artists. So the effect on writers' revenues overall is zero. There is simply too much concentrated in too few hands, one of the unusual side-effects of the new landscape.

It's silly to think that artists do not need structure unless you want the recorded music industry to be DIY albums with local followings. The same effect is now hitting the movie industry, which is suffering from plummeting DVD sales. Upfront finances are drying up. The difference with music is that it far harder to find $5 million to produce a movie than to work evenings and pay for an album. So on the one hand, we'll have a mountain of Blair Witch wannabees and Avatar on the other.
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lrobbo (profile), 23 May 2012 @ 10:49am

Doesn't matter how much they are making, moaning will never stop, it's just too much fun . . .
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