So this summer the topic of music piracy came up in discussion with a coworker. Now I know this is a topic that has been done to death, but between the SOPA/PIPA debates in the US (and our own, much quieter, legislation here in Canada) and several other articles I’ve read of late, I felt it was a topic worth looking at.
My coworkers argument for his illegal downloading was that buying albums online or in stores translated into such a small amout of revenue being paid out to an artist that you weren’t really supporting them much at all. He also argued that the only way to really support an artist financially was to see them live in concert.
So is this true? Is buying an album from HMV, iTunes, Zunior or your local record store really a fruitless means of supporting your favourite band? Well, this article from Information Is Beautiful seems to support this argument. According to their research, an artist makes $0.94 per $9.99 album and $0.09 per $0.99 track downloaded from iTunes, and between $0.30 and $1.00 per retail album sold, depending on their royalty agreement. That means an artist would need to sell 1,229 albums or 12,399 tracks on iTunes per month to be making minimum wage in the United States ($1,160).
Doesn’t seem like your purchase makes a lot of difference, does it? Let’s look at more numbers. iTunes sales account for approximately 70% of all digital music purchases in the U.S. (Music Industry Blog) and have remained steady around that value for several years. Digital music sales also surpassed their physical compatriots for the first time in 2011, accounting for 50.3% or 1.27 billion sales (AUX.tv). What mix of songs versus albums these sales account for is unclear. For the sake of simplicity let’s assume it’s all single tracks. That would mean iTunes saw 889 million sales, accounting for just over $80 million in revenue for artists. Not bad but not great given the number of artists hosted on Apple’s digital music service.
So it would seem like there’s some truth to this argument. If iTunes is the dominant source of sales and they’re only generating $80 million per year for artists then you could justify your illegal downloads, attesting that you’re not really hurting an artist’s bottom line. Truthfully, an individual download doesn’t hurt that much. The problem is that only 16.5% of all digital downloads are legal (The Daily Swarm). If there were 1.27 billion tracks sold by digital services last year that means nearly 6.5 billion more were downloaded illegally. If all those had been bought from iTunes instead it would mean another $585 million in revenues for artists.
Can you do better by seeing an artist live? Maybe if you buy their record from the merch table. But how often do you go to shows each year? How often does an artist play a venue nearby when you’re available to see them? If they aren’t local, there’s the hidden costs associated with touring (fuel, food, lodgings, vehicle rental, etc.) For many bands just starting out, venues really aren’t willing to shell out a decent wage for a show and/or expect the group to bring in a crowd of their own. (Here‘s an excellent article on the follies of these plans for you to read.) These are especially difficult prospects to face, especially when you’re just starting out.
So think about this the next time you start a torrent. Where does the money come from to pay the people who worked to make that album a reality? Is $10 really too much to pay to help that musician cover their rent this month (The Globe and Mail)?