Musicians Only Make 12% Of The Music Industry’s Revenue

Tiffany Ballard: Let’s say an artist blows up and has a song on the radio or a song that goes viral or whatever. One of the good things is being able to say, “Okay, I’m going to go to this label. I’m going to see what they have to say. I’m going to go to this label. I may try to do something with this company, Apple Music, directly, however it goes.” But it’s good that you have those options, you know what I mean? If these people start getting together and making these major corporations, it’s kind of like, would I really benefit the artist or would I harm the artist because now they can’t use their leverage to actually play these labels against each other or whatever the situation may be, you know? Rob Markman: Sounds messy. Rob Markman: What’s up, Geniuses? Welcome back to For the Record. I’m your host, Rob Markman. Now today’s show is a very important one. As much as we talk about the creation of music, to artists about how music is made, and how it gets delivered to us, the music business is really just as important.

Rob Markman: Now last week, I was pretty shocked, man. I read a Business Insider article which revealed that musicians only get 12 percent of the 43 billion dollars the music generated in 2017. I reacted crazy. I saw a lot of artists react crazy, a lot of industry people react crazy. And so I decided to bring a panel here to discuss this, alright? Rob Markman: First up, we have John Lynch. He actually wrote the article for Business Insider, which is based on the Citigroup. He’s the entertainment editor over at Business Insider. John, welcome to For the Record. John Lynch: Welcome. Thanks for having me. Rob Markman: Now next up we have an entertainment attorney. She is one of the stars of the We TV show ‘Money, Power, Respect’ Actually, the only reason that I watch ‘Money, Power, Respect’ is to see Tiffany Ballard. Tiffany Ballard: Thanks for having me. Rob Markman: Thank you. And one of my favorite MCs from Brooklyn. Maybe I’m a little biased, but he just released his new album called ‘Crown Fried.’ Sitting right next to me is my man Dyme-A-Duzin.

Dyme, welcome to the Genius for the Record. Dyme-A-Duzin: Thank you for having me. Rob Markman: Thank you for coming. I wanted to get because everybody has different expertise. John, you know, you work at Business Insider. You really kind of synthesized the Citigroup report that blew this up and made it go viral. Tiffany, you represent so many artists, producers, and songwriters that work with big artists, like Beyonce and Drake and Kendrick Lamar. So you’re in here crafting these deals and fighting for your artists to get their fair share. And Dyme, you’re just out here on your independent grind and hustle. You’re actually a musician. You live, you don’t have a 9-to-5, this is not a side hustle for you.

Music is what you do. So I wanted to get all these three perspectives. Rob Markman: John, I wanted to start with you. The article that you wrote for Business Insider. Can you give us a summary of what it was about? John Lynch: Yeah, so I wrote the Citigroup report that you’re talking about, and I was taken aback to see 12 percent was what artists were making of this 43 billion that the music industry was generating in total. Basically that 12 percent is up from past years, but it’s mostly due to touring. So artists are nowadays mostly making their money off of touring as opposed to purchased music, which is down quite a bit, and streaming. Rob Markman: Right. What we’re being told every time you look around, that Drake is breaking streaming records. Bruno, Taylor Swift, is like keeping her thing off streaming, really selling real well and then going back to streaming. But we keep getting these stories that in the streaming era it’s really a good time, they brought the money back to music. John Lynch: Right. Rob Markman: And, which is cool, but it’s like, Tiffany, where does the money go? Tiffany Ballard: Well, I wonder, too.

No, I’m kidding. A part of it, I would say, there are multiple people and entities that have their hands in the pie. You have to pay a personal manager, business managers, you have labels. You have publishers. You have accountants, you have attorneys, so I would need to know the exact methodology behind, I don’t know enough of what went into- Tiffany Ballard: Even when I think about artists, I think from what I read in the article they’re talking about performing artists, but all performing artists don’t write their music, so sometimes some of that income may go to songwriters. They may go to producers. I’m not really sure exactly what all went into the article and the data they used, but there are a lot of hands in the pie before the artists get paid. Makeup artists, barbers. There’s a lot. Drivers. Rob Markman: And operating costs. The labels have operating costs.

The streaming services, the retailers, the DSPs all have operating costs that have to get recouped before any creatives get to see a dime. John, just going back to you, was it clear in that Citigroup report, it said musicians received 12 percent of 43 billion. Was that all musicians, or was this just recording artists, like your Beyonce’s, your Bruno mars, and not necessarily the songwriters, producers, and session musicians who played on the album? John Lynch: It seemed to me like it was all-encompassing. I think producers were included in it, too. One of the things the Citigroup report got criticized for overgeneralizing a bit, so I’d be interested to hear what that 12 percent was a part of, who is getting that money, necessarily? Rob Markman: And we’re going to get into that, too, because Billboard just recently published an article as a rebuttal to the Citigroup report and the headlines that are out there. I know the RIAA is asking people to look at it differently, but Dyme, man, I want to get to you.

One thing, Business Insider, you guys use is the image of Kanye West as the thumbnail image, as the lead image for this. And with all due respect, Kanye’s going to be fine. Financially, Kanye, your Beyonces of the world, your Bruno Mars, your Jay-Z’s, these artists aren’t starving at all. Dyme, I want to talk to you because you’re an indie artist from Brooklyn. You just released your album, ‘Crown Fried.’ Dyme-A-Duzin: ‘Crown Fried.’ Now serving. Rob Markman: There you go. I just wanted to know, first of all, for me for example, I work here at Genius, and I released an album. Tiffany helped me construct the contracts for and get my legal thing. Music is my side thing. I still gotta maintain a 9-to-5. Music is all you do. Music is the only way that you work, the only way that you eat, the only way that you get fed, correct? Dyme-A-Duzin: Yeah.

I’m an artist first. Artist, MC. That’s my passion. But at the same time, like you said, living the life. You gotta live. But that kind of forced me, not forced me. I enjoy doing jingles. I did something for Domino’s, like jingles and other songwriting opportunities and things like that, so when I first saw the article, I thought 12 percent. Damn. What would Kool Herc, these guys from back in the day think about this? And then knowing the fact that it’s all because the bulk of the artists, what they’re generalizing that 12 percent to be, artists, producers, the fact that it’s touring shows that this is a change in time. The digital age is more about the connection to the artist and the fans besides this big, everybody hands in the pot type. Dyme-A-Duzin: We need teams, but at the same time I feel like the consumption is different nowadays. We’re directly connected to the people that want to hear us. Tiffany Ballard: Can I? Rob Markman: Yeah, yeah. Tiffany Ballard: A couple of points. I know in the article it mentioned, though, which I thought was interesting, was that the 12 percent was actually an increase and back in 2000 it was actually seven percent.

Rob Markman: Seven percent. Tiffany Ballard: And I know they did say it was from touring but mostly from touring because now they tour, but I didn’t understand it fully only because now there’s also 360 deals which didn’t exist back in the day, so now they’re actually participating in touring income, where they would not have in the past, they being labels. So I’m a little bit confused as to why. Because artists have always toured.

We go back to, I don’t say back to Mariah because she’s still relevant, but Whitney, so many people. Michael Jackson. When didn’t they tour? So I don’t know why they would say that now it’s increased because of tours especially when now labels eat off of tour income, too, whereas they didn’t in the past. It was mostly sales. John Lynch: They were saying that artists were touring more, too, to get more revenue.

Just the growth of tours has skyrocketed. I was looking at this graph, and it was like the past five years or so it was a lot of money. Rob Markman: It goes back to this thing. There’s these general reports, I hate these articles. Millennials kill Applebee’s. But one of the things that’s important to this generation that is seen through reports is experiences, right? This generation would much rather pay for experiences, so while we technically aren’t paying for music, if you’re streaming, you’re paying for the access to listen to music, but you’re not paying to own music, that it seems that fans are willing to go out more and pay a little more for a concert ticket. Rob Markman: Drake and the Migos will be coming to New York in a couple of weeks, and I think they got about six or seven dates, like four dates in MSG alone. Those will run into Billy Joel numbers and things that we used to see from these touring giants. Rob Markman: Tiffany, I want to go back to you because a lot of the clients that you represent are songwriters and producers.

Tiffany Ballard: Yes. Rob Markman: Musicians who can’t tour, who aren’t able to make any of this touring revenue, this touring boom that we so hear about. How do you navigate that with your clients, how do you make sure that they get their fair share? Tiffany Ballard: That’s a good question. One thing I will say is the name of the game of course is leverage. One thing I try to do is, how do I go without being so technical? In terms of producers, let’s say, all right? You have these things that are called producer decks, where you sign. You say, “Okay, you can use my song. I’ll get half now and the other half of the advance later. We’ll work out the technicalities later.” One thing I try to do is say, “Okay, let’s not do a deck. Let’s go straight to the long-form agreement. That way, you have leverage because once you sign this deck, we can argue back and forth about points all day long. About what the splits are going to be, who is going to actually, how the sample is gonna be allocated, whether or not the artist is actually, whatever it is.” Tiffany Ballard: One of the things I try to do is to go past the producer deck aspect and go straight to a long-form that we can agree to negotiate the actual points.

But a lot of it is leverage. What’s your last hot track? Who have you worked with? This client is not going to take, he’s not willing to take this percentage because x, y, z. He got this percentage on a different deal with an artist who’s must bigger than the artist that you’re talking about right now, so why would he be willing to take just 10 percent from you when he got 50 percent from a Grammy-winning artist, you know what I mean? Tiffany Ballard: So really it’s looking at the facts, looking at the leverage and actually being willing to forgo the producer deck, which gives you more leverage and to just stick it through. Rob Markman: Negotiate the front is what you’re saying? Sign it out up front. Tiffany Ballard: I’m saying don’t do the deck. Don’t do the upfront because some people need that first half of the advance.

Forgo that first half of the advance and get the entire advance once the long form is done because then you still have the leverage. They can’t put that song on that album until you finish that long form, whereas if you sign that producer deck, they can use that song on the album, and you guys can fight for the next year about the second half of your advance and what the terms are going to be of the competition. Why do that? John Lynch: Sounds messy. Tiffany Ballard: (laughs) Rob Markman: John, I want to get with you because the Citigroup report has, and we mentioned it a little bit, faced criticism. I know Billboard wrote a couple of articles, the RIAA. People are questioning how did they get to this accounting, how did you get to this number, and that they may not be looking at things the right way because essentially they’re an investment firm and may not have the expertise or the ins and outs of the music industry.

What’s your take on all that? John Lynch: Yeah. They had a couple bullet points of things that they took issue with it it. One thing was the Citigroup report was saying a lot of consolidation in the industry could help young artists, up-and-coming artists, and they took issue with that, saying that Sirius XM, for example, they’ve got crazy profits, but it’s not necessarily going down to the artists. So consolidating of, if Spotify, as the Citigroup was saying, if Spotify started to act as a music label for emerging artists, it might not necessarily be good for those artists because who’s to say that the profits will go on to the musicians. John Lynch: There were a couple of other things. They took issue with just numbers, overgeneralizing, too. Yeah. Rob Markman: It’s interesting because, Tiffany, maybe you can speak to this, the consolidations of streaming services, partnering with Live Nation and kind of, then you get to this point of almost a 360 situation where it’s like every aspect of where artists eat forms under one umbrella.

Can artists truly benefit from that? Some may say that the leverage of this consolidation will allow more money to come in from the marketplace because you have a more powerful entity negotiating on your behalf, but in reality is this really a good thing for artists? Tiffany Ballard: It’s kind of hard to say because theoretically, if you’re cutting out the middle man. Well, the label isn’t necessarily the middle man, but if you’re cutting the label out, then theoretically you would think there is more of the pie to split between the Spotifys, and the Live Nations, and the artists.

Tiffany Ballard: Theoretically. But we know that doesn’t necessarily happen. That’s if you are an employee of a company and the company merges with another conglomerate, to form a conglomerate, does that mean your paycheck is going to change? Not necessarily. They may keep whatever is shared, they were keeping, and just split it amongst the partners. So it’s just, it could go either way. Theoretically, you know I could see someone arguing that cutting a label out would increase the pie for the artists below, but in reality I’m just not sure how that would work.

Tiffany Ballard: And I think even having these conglomerates and these mergers I don’t think is necessarily a good thing because part of an artist, let’s say an artist blows up and has a song on the radio or a song that goes viral or whatever. One of the good things is being able to say, “Okay, I’m going to go to this label. I’m going to see what they have to say. I’m going to go to this label. I may try to do something with this company, Apple Music, directly, however it goes.” But it’s good that you have those options, you know what I mean? If these people start getting together and making these major corporations, it’s kind of like, would I really benefit the artist or would I harm the artist because now they can’t use their leverage to actually play these labels against each other or whatever the situation may be, you know? Rob Markman: Key word again coming up, leverage.

Dyme, I want to speak to you. I want to get more insight. If you can paint a picture of what you have to plan for financially. How do you handle your business? You just put out this album, and there’s costs to create the album before you put it out. You have to plan to recoup and then pay yourself and somehow profit so you can maintain a living and a lifestyle.

Rob Markman: Outside of the work that goes in the studio, how hands-on are you with the business and balancing your own books and making sure that you get to eat and keep the lights on at the end of the day? Dyme-A-Duzin: As much as this is an ever changing game, the game plan and the strategies also adjust within that. Like I said earlier, it’s a changing game. It’s a digital age. A lot of effort goes into my merch, putting out merch and with that assisting with the music, I get a lot of people who take the ‘Ghetto Olympics,’ the ‘Crown Fried,’ so I put out projects with that attached to it, and that really helps me navigate. Rob Markman: So it’s telling the story, not just through the music but through the merch that you put out.

Again, with the experiences that you’re able to create. We can’t touch the album if you’re streaming it, but merch you can touch, you can touch it, you can feel it, you can, it’s ranked within real life. Dyme-A-Duzin: I’ve yet to tour as a solo artist myself. I was in a band a few years ago, and through that I learned a lot just touring with them and seeing how you can keep it going with getting on the road. That’s why I can understand why touring is so important and why it’s the bulk. But I look at that, too, like, damn, 360 and the tour is, too. So shit, that’s the most we’re getting, and they’ve got their hands in there, too? It’s like, sheesh! Rob Markman: Let me ask you a question just for the fans listening.

Usually we have artists up here talking about their music and it’s the fandom around the artist. And we know you have very passionate fans, but to the people out there, and anybody can jump in for the fans, watching the fans here, for them, they’re like, “Man, I just want to listen to the artist that I love.” Dyme-A-Duzin: Even looking at that article, that quote. Damn, I was disappointed as a fan. Rob Markman: Right. Dyme-A-Duzin: People go and they say, “Hey, I’m supporting my favorite artists when I’m streaming, so I’m buying this.” At the end of the day, is it going to them? Like you said earlier, who is it going to? Tiffany Ballard: That’s a good point.

If I was looking at it purely from a fan standpoint, and I thought I was supporting one of my favorite artist growing up. Let’s say it was Lil’ Kim or something like that. I was too young to be bumping hardcore. (laughs) I was definitely bumping hardcore. Dyme-A-Duzin: There you go. Tiffany Ballard: Thank you! So let’s say that I was younger, I’m bumping Lil’ Kim, and I bought hardcore, but let’s say an article came out that said Lil’ Kim was getting 12 percent or whatever. I’m like, “Well, I’m just going to illegally download it. I’m not going to, no.” I’m going to be upset, you know what I mean? Tiffany Ballard: But on the flip side, the incentive. It could also give more incentive to fans to go purchase tickets for tours and to purchase merchandise. So I guess that’s the flip side because I would probably say I might download the music illegally, but I’m going to go to her concert, and I’m going to buy whatever merchandise she puts out because I know she’s making more on that side.

So now I want to make sure Lil’ Kim is eating off of what it is that I’m buying. You know what I mean? Rob Markman: But you do find that these fan armies are really invested in the artist. First of all, you can’t tell Lil’ Kim fans nothing. (laughs) I like this new , y’all, I’m gonna have a couple of Lil’ Kim fans in my mentions. You say you like Kim, you got the Nicky fans. You can’t tell these fan armies nothing. They will go to hell and back for their favorite artists and to support their favorite artists. Rob Markman: John, I wanted to pick your brain on the music monetization act and what you knew about that because that’s a bill that’s in front of Congress which they’re promising will ensure that the digital music services or the streamers will pay fair royalties to the right holders and also give the streaming companies certain leverage and legal wiggle room to protect their business so their not losing out.

How can this potentially help the music industry? John Lynch: It’s supposed to streamline the whole process. The music industry is working at still the old-school model when we’re selling physical copies and stuff like. So it’s like, hopefully updating that to boost royalties and, yeah. I know it’s like, supposedly passed the House, but Congress is a mess, so who knows? Trump’s gotta sign it, too, which I’m kind of dismayed about, right? (laughs) Who knows? It could help people out, though. Tiffany Ballard: They’re gonna have to put it in Russian if they want him to sign it. I’m kidding. (laughs) Rob Markman: Put it in Russian if they want him to sign it.

I like that. (laughs) Just closing remarks. Look, the truth is we wanted to do this episode to educate the fans. I know a lot of fans were upset when they saw this. A lot of artists was upset, the artist community. We wanted to have the discussion. We don’t necessarily have all the answers, but it’s really interesting. Rob Markman: We consume more music than ever. If you’re on YouTube, chances are you’re listening to music. If you have Spotify or Apple or Tidal, damn near every song created is at your fingertips, as people, as fans are consuming more music than ever. And it’s important to understand the business and where is it going.

Just closing remarks, things that you think is important, especially for the people to know. Rob Markman: Dyme, man, let’s start with you. Dyme-A-Duzin: I was just thinking about the MMA. It’s about to be passed, I mean, hopefully. I’ve been looking into it, and it was like, oh, dude, what was the question. I had a question in there, but I wanted to keep the conversation going, so should I just close it? Rob Markman: Keep going! If you’ve got the answer to the question, yeah, yeah, yeah. Dyme-A-Duzin: Okay, so the MMA passes. So that allows us to receive more from streaming through all the companies, Spotifys. Rob Markman: In theory, yeah. There’s a lot of paperwork that goes on with who gets the royalties, and it just really, like John was saying, streamlines the whole process and frees up a lot more money or a portion of more money.

I don’t exactly know how much but musicians of all kinds, artists, recording artists, producers, songwriters, get a bigger split of the pie is what the promise of this bill, what this act is. Tiffany Ballard: I think this will move some of the bureaucracy. People have catalogs, they don’t want to license stuff or whatever the situation may be, and I believe it’s like a panel that oversees it, that are like publishers and actual music people, you know? So they supposedly have more, you know, insight. Actually, songwriters, artists, songwriters are like, “Yes, let’s do it.” And a lot of publishers are like, “Yes, let’s do it.” Which is actually rare because usually their interests are opposed, they have opposing interests, but if you can get publishers and songwriters on the same page, it seems like it should be something that they should at least attempt.

Dyme-A-Duzin: The creatives, the creatives that y’all hate, man. Creatives, we’re here, it’s a new town, man. (laughs) Rob Markman: John, what should we look out for just going forward in the future as this bill is about to get passed and a lot of information is coming. I think a lot of sides, like Citigroup is one side, and they’ve got their own interests. The RIAA has their own interests, and you’re seeing a lot of back and forth.

What’s the most important things that we should be looking out for, you think? John Lynch: I think some of the alternative stuff, I was talking to Lupe Fiasco earlier this year, and he was really excited about blockchain technology. Through raising money through Blockchain it goes right to you, it’s direct, and that’s something that seems super-exciting as an up-and-coming technology and stuff. And I saw Grammatik, this DJ from Slovenia, he raised million dollars for his music off of that. Some of that intrigues me, but artists aren’t making enough off of streaming. There’s got to be alternate revenues and avenues to find that. Dyme-A-Duzin: Write jingles for Domino’s man. It’s a good hustle! Rob Markman: I’d like to thank all of my guests, John, man.

Tiffany, thank you. Dyme-A-Duzin, man, ‘Crown Fried’ is in stores now. Thank you for being a guest today, thank you for the information, thank you for sharing. Tiffany Ballard: Let me add one thing. You didn’t ask about my closing remarks. Rob Markman: Go ahead. Did I ask you about them? I’m sorry. Tiffany Ballard: I butted in. I butted in and gave my two cents. What I do want to say is something that is important, no matter what, is for artists. Whether the day, if the aspiration, because all artists don’t want to go major. If an artist knows that at some point they want to get in bed with a major, I think to do as much groundwork and as much hustle as much possible because, like you mentioned, the word leverage, word of the day, leverage. No matter what, even though it’s not gonna be fair, it’s just a system, it’s set up how it is, you know, an artist is not going to ever get 100% of their income generated, not even 50% but at least if there’s a certain amount of leverage going in because you have a song that’s or you have fans that are committed to you, you can demonstrate, look, I have people who are checking for me.

At least you can get the best terms possible for you, as opposed to going through just with a catalog of music that no one’s ever heard. Tiffany Ballard: And maybe go to the A&R guy that’s gonna sign you, but that A&R guy is not going to be able to get the book opened up or get certain things for you, make a deal situated a certain way if you can’t demonstrate that you’re a good, you know, that you’re worth the investment.

You know what I mean? So I think it is important for people to put in the ground work. If they need a 9-to-5, they gotta work at McDonald’s in order to pay for studio time, to pay for some decent quality mixing and masters, whatever it is. I think it is important for people to invest in their product before they even try to make that step and go to pursue a major record deal. Rob Markman: And that’s a good word. Thank you. I know we’ve got a lot of fans that watch this show that are actually musicians or aspiring musicians, and they’re commenting all the time, so hopefully you guys got a jewel out of this for real.

But again, I’d like to thank everybody for joining us. This was a very different episode of For the Record, but an important one, so I hope you guys learned something. .

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