[Infowarrior] - The chart RIAA doesn't want you to see

[Richard Forno]

(As the OP posting to BoingBoing said, "Which raises the question: is  
it really copyright law's job to make sure that last years winners  
keep on winning? Or is it enough to ensure that there will always be  
winners?")


Do music artists fare better in a world with illegal file-sharing?

http://labs.timesonline.co.uk/blog/2009/11/12/do-music-artists-do-better-in-a-world-with-illegal-file-sharing/
This is the graph the record industry doesn’t want you to see.

It shows the fate of the three main pillars of music industry revenue  
- recorded music, live music, and PRS revenues (royalties collected on  
behalf of artists when their music is played in public) over the last  
5 years.

We’ve broken each category into two sub-categories so that, for any  
chunk of revenue - recorded music sales, for instance - you can see  
the percentage that goes to the artist, and the percentage that goes  
elsewhere. (In the case of recorded music, the lion’s share of revenue  
goes to the record label; in the case of live, the promoter takes a  
cut etc.)

Hopefully, this analysis - and there’s more on the nuts and bolts of  
our method below - sheds some factual light on the claims and counter- 
claims that are paranoically sweeping across the music industry  
establishment, not least that put forward by the singer Lily Allen in  
this paper recently - and the BPI - that artists are losing out as a  
result of the fall in sales of recorded of music.

The most immediate revelation, of course, is that at some point next  
year revenues from gigs payable to artists will for the first time  
overtake revenues accrued by labels from sales of recorded music.

Why live revenues have grown so stridently is beyond the scope of this  
article, but our data - compiled from a PRS for Music report and the  
BPI - make two things clear: one, that the growth in live revenue  
shows no signs of slowing and two, that live is by far and away the  
most lucrative section of industry revenue for artists themselves,  
because they retain such a big percentage of the money from ticket  
sales.

(It’s often claimed that live revenues are only/mostly benefitting so- 
called ‘heritage acts’. Unfortunately, the data doesn’t shed any light  
on this because live revenues are not broken down by type of act, gig  
size or ticket price.)


An even more striking thing, perhaps, emerges in this second graph,  
namely that revenues accrued by artists themselves have in fact risen  
over the past 5 years, despite the fall in record sales. (All the blue  
bars in the chart above represent revenues that go directly to  
artists. As you can see, the ‘blue total’ has risen noticeably.) This  
is mostly because of live revenues, but also because of the growing  
amount collected by the PRS on behalf of artists, which accounts for a  
much bigger chunk of industry revenues than most people realise.

(PRS revenues in fact break down into 4 categories - Broadcast and  
Online, Public Performance, Mechanical, International. You can explore  
this in more detail in this spreadsheet, which contains all our data.)

It’s interesting too that, overall, industry revenues have grown in  
the period - though admittedly not by much - which arguably adds  
strength to the notion that, when the BPI releases its annual report  
claiming how much ‘the music industry’ has suffered from the growth in  
illegal file-sharing, what it perhaps should be saying is how much the  
record labels have suffered.

For other people in the industry, not least artists, the future  
arguably holds more promise.

A couple of notes about our methods: the data, as pointed out, comes  
from the PRS and the BPI. We are grateful to the PRS in particular for  
helping us with a model to work out what percentage of a particular  
chunk of industry revenue was likely to be returned to artists. In the  
case of recorded music, we used an average 90/10 per cent split  
between labels/artists. In the case of live we used a 90/10 split  
between artists/promoters.

We hit one major snag. The PRS report gives a figure for annual live  
music revenues but it does not indicate what percentage of that goes  
to venues. (Before doing the split for live music revenues between  
artist and promoter, you first need to take out the percentage that  
goes to the venue.) We asked several big concert promoters and venue  
managers - AEG Europe, Carling Academy, and the PRS itself - what  
percentage of gig revenue one could reasonably assume, on average,  
went to the venue, and none would make an estimate. The closest we  
came to an answer was a remark from a senior industry source said  
‘only a small percentage of live goes to venues’. That’s the best we  
had to work with.

We’ve therefore done the above calculations on the assumption that 10  
per cent of live revenues go to the venue, but in these two graphs, we  
show how the situation would change if that figure rose to 20 per cent.

We would welcome any feedback on a more accurate figure to use for the  
venue’s share of live revenues, and any more general feedback on our  
methods.