Music Download And Stream, Neither Black Nor White…The ‘Grey Spot’ Is Taking Over

AAs a music manager I am frequently confronted with the question of whether or not I am pro or against illegal and/or free music download and streaming… I used to be pretty much against it like U2’s manager Paul Mcguiness.

I have not changed my mind in regard to the rights an artist has – to get paid for what he does – but I see now that the source of the problem and the solution lie far away from the music end-consumer.

Music download can be something positive, and it is! I do believe that viral marketing can have a huge impact on someone’s popularity and therefore further his career. The main question is: how to make a profit and run a business, where there is no real income from it’s main product – in this case the music?

I hear a lot of people talking about merchandise and live shows being the real solutions for the future – I just like to remind everyone that merchandise and live shows already were parts of an artist’s income before the advent of the Internet. Therefore this is not only a weak, but also an absolutely stupid, answer to the problem.

You must now be thinking that I am still against free download and streaming, but no, I am not. I just believe that those who offer it for free should pay for using music as part of their advertising arsenal.


Spotify, iTunes, YouTube, Telecom and even mobile phone companies being some of many corporations that take advantage of a product that lacks or has outdated, general and global regulations, simply lobby their way through and around royalties and copyrights, under the “we promote” flag.

Nokia comes with Music and that’s cool. But who does Nokia pay for this great feature? And how much?

Companies, which use 3rd party products, brands or services, pay insignificant amounts of money to Artists and labels, forcing them to either join this “criminal” scheme or to be doomed to oblivion.

A year ago I was talking with a business manager from a known German indie label, analyzing Spotify’s popularity and he told me that it was a necessary evil. The label had to join since everyone was doing it. The label had over a 2 Million plays from 40 different artists.

That Label got £440 for the lot, and after taking their commission (25%) of £110 plus £250 for campaign-advertising. The remaining £80 was proportionally divided, £40 going to the artists. There you can see how much 1 year on Spotify will give you…

Now remember before you slander a record label, keep in mind that not all of them are bad and almost none of them are making huge profits nowadays!

If you take the recent article from The Independent about superstar Lady Gaga, who probably has better royalty rates than the above mentioned label, she got around £108 for 1 million plays.

I am not sure, but I would bet my life that the label invested a slightly bigger amount in order to promote the “Lady” in question.

I believe that digital sales could easily be obsolete in a couple of years, and all music available could be for free to listen to, if artists and labels would get their share from these Multi-billion-dollar companies.

Photo by: Steve Wampler on Flickr

If music is not to be sold over the counter, that is fine – neither will newspapers, movies or books in the future – but those who provide means of mass distribution and also earn billions through advertising and attracting investors should pay their suppliers accordingly, in this case the music industry and the artists.

This is the “Grey Spot” in the music business, leave the end consumer alone. At present, music distribution is a free product for Internet giants who managed for years, to stay away from the spotlight, blaming either the consumer or the labels for something that they are creating: the utter downfall of the artist as a professional worker.

If you have the illusion that indie labels make a lot of money, you are wrong. I see many A&R directors, PR managers working out of passion, driving to meetings in 1997 Toyota Corollas, and sleeping at travelodges.

Indie labels sometimes fight to present new products and even help bands to tour, knowing that this might be a risk investment with no compensation at the end of the day.

The idea of free music is now moving to another level. Some of the big festivals (especially in Europe) offer artists a spot on the festival, telling them that this is a great opportunity for them to promote themselves. Artists go there, play for free and on top they spend a couple of thousands in transport and lodging, so a sold out festivals can put their names on the bill and make even more money.

If this idea of promotion sticks, then we will see the demise of professional agents, managers, crews and artists, who will simply stop working, as there is no more money whatsoever to be made, never mind a living.

Stage production in the last 10 years has never been so bad. If we compare it to the ’80s (OK, they were a bit over the top), even smaller acts would back then offer something for your eyes besides the music.

If no action is taken, soon we shall see music, currently an industry employing thousands of people, becoming a hobby like gardening, or knitting in few years.