So Bands Are Poor & Subscription Services Are Losing Money. What Now?

Posted November 15

The whole “How can bands make a living in the Internet age?” thing reached a fever pitch of late when Pandora turned to Congress to pass the Internet Radio Fairness Act in an effort to reduce royalty rates for Internet radio services. Bands, accordingly, lashed back — 100 fold — protesting Pandora’s efforts and stating that this move would seriously cut back on the royalties that bands rely on to survive. Cue the barrage of opinion pieces and raised ire on all sides — both music and tech. As of yet, however, no one seems to be offering any new solutions as to how this whole situation can be remedied — and therein lies the rub.

Let’s face it, kids. We don’t have a time machine. There’s no way to blast back to the pre-Internet age and tell people to stop putting music online. It’s there to stay. The issue is making that work for both artists and tech companies alike. Bands are increasingly coming forward to report how much — or little — they’re making via streaming services, and those same services are pretty consistently posting losses each year that they exist. We are, it seems, at an impasse. Sure, we could just abolish subscription services (or, perhaps, pay CEOs less) and point at fans sternly, demanding that they buy records. But, as we said before, that pesky time machine has not yet been invented and even the most Internet-illiterate idiot knows how to torrent.

So how do we make bands, fans and tech companies happy? And how do we keep money in the pockets of the people making the content that’s responsible for the existence of the industry as we know it? We’ve learned by now that telling bands to sell more merch and to tour more is not really the answer (read this piece by former Village Voice editor Maura Johnston if you want more on that).

So what is the answer? Several subscription services have started instituting programs that they hope will help bands get paid — Rdio started paying bands commission for attracting new subscribers and Grooveshark instituted a tip jar — and those are a step in the right direction. Still, those first blush kind of initiatives have their shortfalls: Do you have enough money indefinitely, Rdio, to pay bands $10 for every new fan who signs up? And, Grooveshark, do you really trust fans to kick money (in any substantial way) to an artist whose music they’re listening to for free?

Cheers to those companies for taking steps towards innovative monetization, though, for breaking away from the old models and trying to tap into new trends — trends that make sense in a world in which media, fans and the Web are instinctively tied together. My question for the rest of us, however, is what more can we do? What haven’t we tried yet?

Yes, bands can keep reflecting on the old days and outlining how little they make via streaming services (as in this fascinating Pitchfork piece) and tech companies and artists can engage in battles like the one Pandora and those 100 musicians are locked in now, but who is going to be the one (or ones) to break out of that pattern and say: “OK, we can’t make money off of music sales anymore and touring isn’t cutting it. We’ve made those observations ad nauseum. Now what?”

What’s the next step?

Give us your pearls in the comments below.

Image courtesy of Flickr, schizoform