"Don't stream music," critics of music streaming say. "It's bad for artists." This might have you worried, if you don't want to rob your favorite band of the money they deserve. The alternative? To buy an album. Except buying an album is not necessarily the best way to make sure a singer gets your cash. It's also not the future of music.
Critics of music streaming point to album-buying success stories: The fans who bought Taylor Swift’s 1989, for instance. This will probably repeat itself when Adele’s 25 when it comes out. Not purchasing music in these numbers, they’ll hint, is the biggest problem facing artists in the industry today. But that’s wrong.
The problem with the music industry is that it still hasn’t adapted to the internet era. It's easy to blame fans, but we need to acknowledge the fact that the business, as a whole, is failing musicians.
We can dismantle the "streaming is bad" and "buying albums is good" argument—both of which are iffy at best—by following the money. Let's say you buy an album at Walmart for 12 dollars. The first to take a cut of that 12 bucks is Walmart, because the company distributed the album—it costs money to stock stores, hire employees, etc. Because this varies from distributor to distributor, we'll say that a retail store like Walmart takes 2 dollars, or a little over 15%. Most estimates say that retailers take closer to 30%—we're being generous. That leaves 10 dollars. So that goes to the artist, right? Your artist just made $10? Wrong.
Most artists only receive a tiny portion of that remaining 10 dollars. The record label (which distributed and coordinated the release) most likely has a deal to take a pretty high percentage of that sale before the artist ever sees a dime. In an examination of a major label contract, the Future of Music Coalition found that artists do not get 100% (or even the majority) of the revenue from an album sale. Not even close. Traditional contracts begin at somewhere between 11% and 13% of royalty awarded to the artist. But as Future of Music reports, clauses in an artist’s contract with a label can mean that number drops even further—as low as 5%.
In this clip from the 2007 documentary The Last Days of Left Eye, the late Lisa "Left Eye" Lopes of TLC explains how her group went bankrupt by breaking down all the fees and cuts that happen before an artist gets a paycheck:
Even the biggest artists get only a sliver of the cash from an album sale. Beyoncé has a label to pay, too. So where does the rest of the money go? It's what funds the music industry, which has historically made its money on album sales. The label and the publisher have always taken a cut from artists via vinyl and CDs sold in stores—that's what's behind executive paychecks and the printing of albums. It's what kept the big record companies in business. In the past, these companies, were necessary.
One good example of how important labels were to artists in the past: "breakage fees." A small percentage of album revenue was taken by the label to account for all of the broken vinyl records and CDs that couldn't be sold because they got damaged on their journey from the warehouse to your local record store. Future of Music discovered that many artists today are still signing contracts where the label takes a breakage fee—simply because no one bothered to change the wording. This breakage fee is a percent of the total revenue of the album, even though 50% or more of album sales for artists might be sold digitally.
People don’t buy albums the way they used to. We know this. From 2012 to 2013, purchases of physical music—CDs and records—dropped 13%, according to the Pew Research Center. Digital music purchases dropped 6.3%. Last year, those sale drops were even bleaker. From 2013 to 2014, both physical and digital music purchases dropped another 13%.
The iTunes store and other digital music outlets are not examples of how the music business has adapted to the internet economy—it's more of a transference of the physical economy to the internet. Artists still don't make very much revenue from digital album sales, and many find that there are new fees in their contracts that strip them of profit—like the addition of “New Technology Clauses,” which charge a percent of royalty for readying an album for the digital format, which is almost completely unnecessary. But none of that really matters—not many people are buying digital music, either.
What's crazy, though, is that album sales still made up 69% of the revenue for the music industry in 2014. The business is completely dependent on album sales, which is how the music industry has been structured for the past fifty years.
The problem is, the music business has changed, but the record labels have not. Artists don't need to have physical albums printed. They don't necessarily need a record label’s pricey public relations hype machine in order to become a success. A singer or band can use social media as PR and put their album online without the help of a major label.
Albums still generate consistent revenue for artists and labels. For a singer to make same amount of money from streaming as she would from an album sale, her song would need to be streamed hundreds of times. This can be terrifying. Artists are often outspoken about their own fears regarding the future of music. As Taylor Swift wrote in an op-ed for the Wall Street Journal :
It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or undervalue their art.
But what Taylor Swift failed to address is that the price of music is set rather arbitrarily. Why were vinyl records priced at $18? Why were CDs $12? Why were digital albums $9.99? Because someone decided that was what they were worth. That was how much people would pay for them.
Taylor later pulled her entire catalog from Spotify to cement her point: If listeners wanted her music, they had to buy it. This is something that only a major pop star can do. The cute little indie electropop band you love probably couldn't just pull all of their music from Spotify and still make enough money to live on. And let's be honest: As complicated as paying artists for streaming music is (and it is really fucking complicated), that's one way people like to listen to music. And it's the future.
That's not to say that streaming doesn't mean an artist makes money—independent artists have reported making thousands of dollars off of their songs plays on streaming services. It's just that we're in a messy transitional period, and the business isn't evolving as quickly as technology and listening habits are.
By buying an album, you aren't really supporting your favorite artist. What you're supporting is an outdated and impractical system. And many in the music business are not fighting to figure out how to pay artists in the digital era. People can't be convinced to return to buying albums any more than they can be convinced to go back to using a flip phone.
So what do you do instead? How do you support an artist that you really love?
The easiest way to support an artist is to listen to his or her music using any system that pays artists—Spotify, Pandora, or Apple Music, for instance. You can also purchase a digital download. Ultimately, telling your friends about a singer and convincing them to listen to her music might be just as beneficial for a younger artist, in the long haul, as 10 dollars. Converting a fan could mean thousands of dollars for that artist over the course of her career.
If you do want to buy an album, don’t do it through iTunes or at a store. Do it through the artist’s personal site or at a show, where there are fewer middlemen taking a cut of the revenue.
Another way to support your fave: Buy concert tickets. Though album sales have fallen drastically over the past five years, the concert business is booming. "The top 10 percent of artists make money selling records. The rest go on tour," Scott Welch, who manages singers Alanis Morissette and LeAnn Rimes, told Forbes in 2003. That’s even more true today.
In addition to seeing your beloved band when they're on tour, buy a T-shirt at their silly merch stand—the profit doesn't pass through as many hands, since most labels do not have any legal right to concert revenue. Plus, it gives your favorite band free advertising. Even Taylor Swift makes most of her money on concert ticket sales.
Ultimately, there’s no ideal way to support your favorite musician at this point in time. Streaming hasn’t stabilized itself as a consistent form of income, touring can be expensive, and only a big fan is going to buy a T-shirt. But buying albums is not a solution to this problem.
Don't feel pressured to buy albums. Bandaids don't fix bullet holes and your $9.99 isn't going to fix a broken and outdated system.
Correction: A previous version of this piece incorrectly cited Fetty Wap as an example of an independent artist. Fetty Wap is signed to 300 Entertainment, a division of Atlantic Records.
Kelsey McKinney is a culture staff writer for Fusion.