RAIN 3/2: Billboard ranks top earning artists; Reuters' take on artists' streaming income misses mark
BILLBOARD TALLIES MUSIC INDUSTRY’S TOP EARNING ARTISTSVenerated industry news source Billboard has released the results of its fourth-annual Money Makers list, a compilation of the music industry’s top 40 highest earning acts. Based on artists’ share of revenues from touring, CD and digital sales, publishing royalties and all forms of streaming, Billboard reveals the top money-makers are U2, Springsteen, Madonna, AC/DC and Britney Spears.
The Billboard story, “Music’s Top 40 Money Makers,” is here.
RAIN ANALYSIS: NET RADIO FAR MORE BENEFICIAL TO ARTISTS THAN THE ROYALTIES THEY EARNReuters coverage of the new Billboard report (above) asserts that online streaming music services, especially non-interactive Internet radio, are proving to be a poor income substitute for artists in a declining music business. The coverage, however, muddies many important distinctions about the role of non-interactive streaming and the money that changes hands when music is played, and thus unfairly under-represents the benefit the medium offers performing artists.
Assessing the findings of the report, Reuters writes:
The results show that of the more than 100 artists examined to compile the Money Makers list, only 10 made more than $2,000 from noninteractive streams in 2009, with Beyonce topping the list with an underwhelming $5,000.
Here’s the problem
Internet radio drives music sales
But Internet radio pays royalties too
And keep in mind that $5,000 Beyonce made from Internet radio is exactly $5,000 more than she made from being played on terrestrial radio.
One final note on royalties and the nature of different types of streaming services: The study points out artists see higher revenues from on-demand streaming services. This is because those services pay significantly higher royalties than Internet radio. And that’s logical, as the evidence (and common sense) indicates that while non-interactive Internet radio is promotional in nature, “play-what-I-want-right-now” streaming services are “substitutional” in nature (see the NPD study coverage, as well as Eliot Van Buskirk’s “Of Course On-Demand Music Replaces Sales – It’s Supposed To,” from Wired.com) — people use these services instead of buying music, which is why they pay higher royalties — to offset the loss in music sales. So to compare the two services and not take Internet radio’s promotional power into consideration, as well as interactive streaming’s likely detrimental effect on music sales, is unfair. An “apples-to-apples” comparison of artist revenue from Internet radio versus on-demand streaming would need to involve not only the royalties those services pay, but how they affect sales (again, Internet radio helping sales while interactive streams are likely substituting for music purchases).
The Reuters article, “Performers see tiny returns from streaming music,” is online here. RAIN’s coverage of the NPD Group study (with a link to Billboard’s coverage) is here. Read Crupnick’s and Westergren’s comments on the study in Digital Music News here. Finally, Van Buskirk’s Wired article is in the Epicenter blog here. — PM with MS
BBC CONFIRMS LIKELY CLOSING OF TWO STATIONS, WEB SITESIn a cost-cutting measure, the BBC will likely close digital radio stations (and their streams) BBC 6 Music (alternative rock) and the Asian Network (for the UK’s South-Asian community). Various sources report that BBC would also likely lay off quarter of online staff and close half of its websites by 2013. BBC’s spending on web content would be cut 25%.
News of the cuts leaked last week, and were confirmed by Director Mark Thompson today.
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