The Facts

Some intriguing facts about the music industry: (from Music Entrepreneur)

  • The top 1% of artists earn 77% of recorded music income
  • The average musician only earns 6% from sound recordings
  • 90.7% of all artists are undiscovered, 6.8% are developing, 1.4% are mid-sized, 0.9% are mainstream, and only 0.2% are considered megastars
  • 15% of artists only sell one album per year, 82% are unsigned, 33% never sell any albums at shows, and 24% of musicians have mailing lists that have less than 50 subscribers
  • For every $1 that Spotify earns $0.85 goes right to the record labels
  • Spotify has never been profitable and most likely never will be
  • For every $1000 in music sold, the average musician receives $23.40

Lets break these down:

The top 1% of artists earn 77% of recorded music income

If you aren’t in the top 1%, you’re not making the big bucks from recorded music. But arguably, even the top 1% aren’t earning a ton, because of what record labels keep. Imogen Heap, for example, says she only keeps 18% of the total money generated from her music. And that was after negotiating for a better deal.

Digital Music News

The average musician only earns 6% from sound recordings

Other revenue streams, such as touring and live performance (28%), teaching (22%), and salary as an employee of a symphony, band or ensemble (19%) represent the most lucrative income streams for the average musician

SSRN

90.7% of all artists are undiscovered, 6.8% are developing, 1.4% are mid-sized, 0.9% are mainstream, and only 0.2% are considered megastars. (Next Big Sound)

So, your parents weren’t wrong when they said your odds at success in music were less than 1%. However, that depends on what your goals are and what your definition of success is.

Music Entrepreneur

15% of artists only sell one album per year, 82% are unsigned, 33% never sell any albums at shows, and 24% of musicians have mailing lists that have less than 50 subscribers. (Music Marketing Manifesto)

Note: These percentages represent the majority in each category. In other words, the 15% of artists who only sell one album per year represent the largest segment of the graph. The same is true of the 33% and 24%. 10,000 musicians were surveyed in this study.

Music Entrepreneur

For every $1 that Spotify earns $0.85 goes right to the record labels. Spotify has never been profitable and most likely never will be.

You can see from this article (albeit before they went public) that although they are worth between $16-20 billion, they still lose somewhere between $100-150 million each year. Their economic model that they speak about is about growth, that eventually once they are used throughout the whole world, they can and will become profitable. But if you actually look at other Industry leaders, specifically Apple, they have always operated iTunes at about a break-even revenue stream. And this works for Apple, as they make plenty of money selling other things, so they can afford to lose money from music, if they can make up for it with $1000 iPhones.

For every $1000 in music sold, the average musician receives $23.40

It’s gotta be demoralizing for an artist to see this… and this was the statistic that really led us at Sunspot on our mission to change the industry for the better. On average, the artists are receiving about 13% of the music they sell. Many bands/artists/producers/singers/songwriters are actually a collection of individuals, so then that 13% gets cut even further… So where does it all go?

As you can see from the image on the left, the bulk majority of that money is going to the Record Label… well, we already knew that was the case, but then we are also giving almost a quarter of the money to distributors? Then from that 13% that the “Band” gets, it is then shared with the bands manager(s), producers, song writers, band members, lawyers and so on. As you can imagine, the splits go on and on, until the “creators” of the music finally get the chance to pick the couple of morsels from the bone. This model has existed for what seems like forever. Why has it not changed? Why has it taken so long for the industry to be disrupted?

Well, like most industries, the big players have fought hard and smart to prevent any major “disruption” from taking place.

5 – 7 years ago there was a big push towards an Independent Artist Revolution

The Record Labels saw this and quite swiftly bought them all up. With the promise to artists that they needed one another and the artist would have a much better chance of success if they stayed under their wing. So if we were to believe that were true, lets think about a few things…

What do Record Labels actually do?

Well they basically do three major things for artists:

  1. Marketing/Advertising
  2. Distribution
  3. Upfront investment in an artist

Sunspot was built and designed to offer a solution to all three of these needs.

You can very easily market your art by pushing fans to your SPOT or playlist. The more people you have listening in your room simultaneously, the higher up on the “chart” you get placed. Its real time marketing. We have one click links for both web and mobile devices that take the user right to your playlist or your artist page. You can also post live streams or picture comments inside your SPOT, chat with your listeners, and many more features that allows you to get closer to your fans and future fans.

Sunspots distribution platform is exactly that, it is a highly scalable full featured platform that offers you everything iTunes or Spotify does with all the advantages of Facebook and Instagram. All rolled into a single package! Distribute and monetize your art in a single place with Sunspots convenient features.

We also offer more creative ways for the artist to get paid! One of the most effective ways is to just create a “Go Fund Me” style campaign directly in Sunspot. And allow fans/family and whoever else to just send money directly to your account in an effort to help finance your dreams. This way, there is no need to direct them elsewhere so they can listen to your music and see your live performances; it is all right there in your artist profile.

We want to offer artists everything that Record Labels do, but instead of taking 87%, we are splitting it 50/50 with the artists.

Sunspot is committed to giving the artist the same advantages of being signed to a Record Label without the crippling costs that the Record Label bestows upon you. We believe that we can give you everything that a Label can, and more, at a fraction of the cost. Both to amateur and professional artists.

Join us!


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