I used to write a lot about the music industry but it because less interesting once Spotify became dominant and everyone accepted that streaming is the future. This chart got me excited again though. Pop stars regularly complain about how little they get when their music is streamed, but they are mistaken in blaming the streaming services. It’s the labels that have the biggest take.
The $1,000 we are talking about here comes from music sales – e.g. CDs. As you can see the label takes $630 from that $1,000 and the band gets $230 which is then shared with their advisors leaving band members in a typical four person band with $23 each.
I saw the chart on Techdirt, a site dedicated to exposing old media rip-offs and BS. It’s great to see them still going. After the chart they go on to explain how even $23 is recoupable against any advance the band might have had, so the true situation is even worse.
Good middlemen in most modern industries have a 10-20% stake. AriBnB, eBay, Booking.com, TripAdvisor and many others are in this range. Companies that take a 63% cut are open to disruption and it’s hard to see how the labels have held onto their position, much less how they will sustain it.