After lengthy delays and setbacks, Kanye West's long-awaited follow up to Yeezus, The Life Of Pablo, made an exclusive debut on Tidal, amid a stream of bizarre publicity generating Twitter rants and fashion shows. While Kanye's claims that he is 53 million dollars in debt has been met with skepticism, one thing is for certain: The Life of Pablo's release was so poorly executed, it cost him ten million in sales thanks to piracy.
Kanye's decision to keep the release exclusively to Tidal was a big success. For Tidal. Numbers show Pablo more than doubled Tidal's subscriptions from one to two and a half million. The album's been streamed 100 million times, more than any album in Tidal's admittedly short history. (That's if you believe TMZ who reported those numbers.) regardless of the number, it's not really shocking news considering Kanye is a big draw.
What is shocking is that, three years after Yeezus, Kanye had enough hype built up to drop the album, but chose to stream it instead. The amount of money he could have made in album sales, vs.streaming is hard to quantify considering digital downloads vs. physical. But one thing is certain. By windowing the album to Tidal, and deciding at the last second not to let people buy the album, sales were lost. To be sure there were people who don't have Tidal but like Kanye who decided to sign up and pay for Tidal. But there were enough who like Kanye enough but don't want to use Tidal who decided to pirate it. Add to that fans who pre-downloaded the album only to be told they wouldn't get it and have to be refunded money and you have one giant ball of stupidity.
Add to this Tidal's oops moment in January where they started charging people who closed their accounts after their three month trial ended and Tidal is not having a great start to the year.
Pandora, meanwhile is supposedly looking for a buyer.
And Spotify is facing not one, but two class action lawsuits from musicians, David Lowery being one of them, over millions upon millions of unpaid royalties. Spotify for its part is all but admitting they not only have unlicensed songs but most likely know the number of songs and who wrote them.
Does anyone in Silicon Valley's "music business," know what the hell they are doing?
Perhaps if you are a one percenter like Kanye this question never enters your mind, as you are safe with endorsement deals, fashion lines, and no doubt lucrative exclusivity deals for streaming your album on one platform. For middle class musicians it's a different story. That question not only keeps many of them up at night, but also keeps on them on the road for a lot longer than they'd like, with depreciating returns.
I wasn't able to see Ween reunite this month after a four-year hiatus. After I got over my jealously, one question I had for one of the business affairs guys I work with was how much did he think they'd make a show. He wasn't certain. There were too many variables.
Over on the Trichordist, David Lowery puts it into perspective and shares the stark reality of the middle class musician who plays to at most 1,000 people a night. This is Lowery's economic breakdown for the middle class musician on tour in America:
Buy ticket: $22-$30+taxes Ticket face value $20
Ticket Charge $2-$10 bucks 50% to venue/ 50% to ticketing agency 0% to artist.
$20 Face Value
$8 (40%) goes to venue (rent/security/staff/pa/lighting/promoter profit)
$12 (60%) to artist. But this is artist gross!
Then artist pays:
$1.20 (10% of 60%) to agent
$1.80 (15%of 60%) to manager
$1.20 (non-resident state withholding tax average 10%)(Grrrrrrr… total government rent-seeking activity).
$7.80 (39%) adjusted gross to artist on every ticket.
Then the artist pays crew, transportation, hotels, fuel, meals, insurance etc
Let’s look and see how that works.
Take moderately popular middle class touring band. Bare bones. 4 band members and two crew. 200 paid on a monday night in Tulsa OK. $20 face value on the ticket.
Artist adjusted gross $1560
Typical daily expenses.
$300 2 crew salaries (low ball!)
$150 van/trailer rental or depreciation (300 miles a day) + insurance
$450 hotels (two star or lower)
$150 meals or per diems
$100 amortize misc/overhead (supplies, accounting costs, tax filings in 40-50 states, repairs, storage, rehearsal space etc etc).
$210 amortize day off /travel days (6 days on 1 day off)
$1,450 approximate daily expense.
Each band member (4) makes $27.50 before tax. or 0.7% of face value of each ticket.
Sure the band members might make $500-$800 bucks a show in their best markets on a friday or saturday night. But if you are very lucky that’s 25 shows a year.
The other hundred shows a year look like this.
Keep in mind the more independent artists don't enjoy the same streaming rate that more popular artists do. So royalties from streaming are negligible at best. They aren't getting "exposure," and whatever costs they can cut from recording on cheap equipment at home doesn't make up for it in the long run. In other words, nothing has changed for content creators. Whether it's a musician or Youtube star, one percent are rich, while the rest struggle to pay their bills.
The Kanye's of the world will be fine, no matter how much they whine on social media. And the rest of the creators are still sleeping in their metaphorical vans.
it's 2016. Nothing has changed.