A recent study by the RIAA found that despite vinyl sales making up only a fraction of the overall consumer market for music, they generated more revenue for artists, labels, distributors, and sellers in 2015 than all the revenue generated from ad-supported streaming combined. The 17 million vinyl records sold in 2015 accounted for $416 million in sales, while ad-suppoted streaming on services like Spotify and YouTube only accounted for $385 million. This news also comes as it was announced that 2015 was the first year that streaming edged out digital downloads in overall volume.
“In 2015, digital music subscription services reached new all-time highs, generating more than $1 billion in revenues for the first time, and averaging nearly 11 million paid subscriptions for the year,” RIAA CEO Cary Sherman says. “Heading into 2016, the number of subscriptions swelled even higher”Š ”Šmore than 13 million by the end of December … The consumption of music is skyrocketing but revenues for creators have not kept pace. In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meager”Š ”Šfar less than other kinds of music services.”
So this all lends to the question, what is the best way for the conscientious music consumer to listen to and purchase music?
The answer is not an easy one, and it has a lot to do with the convoluted economics of the music business. For example, a mainstream artist may only make $0.33 off of each copy of a physical album they sell. That means there could be a scenario that depending on your streaming habits, you may actually be supporting that artist more by streaming the album instead of purchasing it.
However the story may be a completely different one for your favorite independent artists. If an artist makes and manufactures their own music and you buy a copy from them at a live show, there’s the possibility they may receive 100% of the proceeds minus the production costs. Or if an artist is signed to a smaller indie label, they may receive 30% to 60% of the album price. Or when it comes to the hot distribution company Thirty Tigers, most artists will receive 90% of the overall take.
Something else to consider is that you want to support your favorite artists, but you also want your music to be easily accessible. It’s not so easy to listen to those pricey vinyl records in your vehicle, or on the bus ride to work. So there also has to be some practicality in your purchasing and streaming habits. But just because you stream an album online doesn’t mean you can’t support your favorite artist otherwise. Often you hear from independent music fans that say they’ll listen to an album on Spotify as soon as it’s released, but then buy a physical copy the next time the band rolls through town. Or maybe in lieu of buying an album, they’ll buy a T-shirt or two. But they make sure to spend money directly on a band.
Also there’s a lot of data on how much labels, distributors, and sellers make on a record compared to artists, making it seem like they’re these draconian and greedy entities out to take advantage of artists. Sometimes this is the case, especially when it comes to big mainstream labels. But many of your favorite indie labels also need financial support so they can in turn support your favorite bands and artists. So do the songwriters who write for artists. Same goes for local or regional record stores that help get the music to you. And even if you hear, “Oh, the artist only receives $0.33 if I purchase a physical copy,” in the macro economics of the music business, that $0.33 could add up and be very important revenue stream for an artist’s career once it’s combined together in total sales.
How to purchase music is a very convoluted subject, is specific to each artist, and it can drive you crazy thinking about it. But despite some rare cases and unusual exceptions, there are a few hard and fast maxims about the best ways to purchase or stream music to make sure you’re supporting your favorite artists as best you can.
BEST Option 1: Purchase a physical copy (vinyl or CD) directly from an artist at a live show
If you want to make sure your money gets directly into the hand of your favorite artist, then put in there yourself. If they’re completely independent, most or all of the money will go directly into their pocket if you purchase from the merch table. If they’re on most independent labels, they will make a fair percentage of the sale, either as part of their contract on a percentage basis, or by buying their merch stock from the record label at a discount, and then selling it to fans at sticker price. Some independent, and even mainstream artists will also receive the money normally dedicated to distributors and sellers if you purchase from them directly at shows.
Vinyl copies will probably help support the artist more than a CD, and they will usually come with a free download code so you can listen to the music away from your record player, but sometimes the margins on CD and vinyl can be ostensibly the same. It’s also not a bad gesture to buy a t-shirt or other merch item in lieu of an album maybe you streamed so much or downloaded already that you don’t have a desire to purchase a physical copy of, and can be just just as good (or better) than buying an album.
BEST Option 2: Purchase a physical copy (vinyl or CD) directly from an artist’s website
Obviously not every band or artist will be rolling through your particular town right when their album is being released, so buying directly from the merch table is not always an option. Perhaps you can wait until they do come through town, and in the interim stream the album on your service of choice. Or you can purchase the album directly from an artist’s website, where many of the same rules that favor the artist apply.
The losses that an artist incurs by the consumer buying online compared to in person are marginal, but can add up. Paypal fees, credit card fees, or other fulfillment fees may apply. The artist may have to pay a small percentage to whatever company is handling their shopping cart. Some artists use 3rd party distributors since they’re on the road often and are not around to stuff envelopes with CD’s and T-shirts, and shipping costs can also be an issue for both the artist and the purchaser. Money spent on shipping goes to UPS or Uncle Sam, not the artist, but overall this is still a better option than streaming the album on an ad-supported service, or buying from a 3rd party big box store.
Sometimes artists won’t have an option to purchase their music on their website, or will simply supply links to iTunes and Amazon in their online “store.” Other artists, especially mainstream ones, may not have a contractual option to sell their own music. If this is the case, it’s still not a bad option to click specifically on the Amazon link to purchase a physical copy. If the artist has set up an affiliate program with Amazon, they will get a greater percentage of the proceeds from the sale if you use their supplied links to purchase.
DON’T FORGET TO PRE-ORDER! Pre-ordering albums can be a huge help to artists and labels. The more fans that pre-order, the more likely an album will sell enough copies during its first week to show up on industry charts. Being able to boast a good chart showing can give an artist the momentum they need to either launch a career, or go to the next level. Charts are what the industry pays attention to, especially these days when independent artists are showing up on industry charts more than ever (because their fans are more likely to purchase physical or downloaded copies).
Also, a lot of times pre-ordering will be rewarded by being able to download a song or two early, or if you pre-order a physical copy, it will be accompanied by a download code for the music just in case you don’t get it on the day of release.
BUNDLES BUNDLES BUNDLES! Bundles of albums, t-shirts, and other merch items together are an even better way to support your favorite artists, and save some money on each item and shipping costs. For fans who really want to show their support, this is a great choice.
BEST Option 3: Purchase a physical copy (vinyl or CD) directly from an independent label
Many independent labels, along with facilitating distribution of albums to larger sellers through Sony Red or Red Eye Distribution, operate their own shipping departments and stock CD’s, vinyl, or even offer digital download options for their artists. This is another way to cut out middle men and make sure the artist and independent label is getting more of the money. You might notice that for some artists on certain labels, if you go to the “store” on their website, it will redirect you to the label’s store. This is still a solid option for keeping the money as close to the artist and the people supporting them as possible.
BEST Option 4: Purchase a physical copy (vinyl or CD) directly from an artist-supporting distributor (BandCamp, CD Baby)
For artists who don’t have record labels, and even some who do, companies like CD Baby, TuneCore, and BandCamp offer great options for independent artists to distribute their music, digitally and physically, through their low-cost and easy-to-use interfaces. The margins BandCamp and CD Baby offer for sales, digital or physical, are much better than they are with Amazon or iTunes for artists. Artists even have the option of manufacturing their own physical copies, even offering signed copies and bundles with T-shirts, etc., that they can send to these fulfillment companies to handle the orders for them.
CD Baby and BandCamp are many times seen as a pain by consumers who are used to using the much easier options of iTunes, Amazon, or Google Play, and many independent artists use these smaller companies to distribute their music to the bigger sellers, and to streaming companies like Spotify. But chances are, the artist will get a little bit more money if you buy from BandCamp compared to buying from iTunes.
BEST Option 5: Download an album or song from the artist, the label, or an artist-supporting distributor
Let’s face it, some people just don’t want to be lugging around huge music collections, or may just not have the space for them. But downloading music is still a better option than streaming it if you want to make sure the most money ends up in the hands of the people who actually make it. Usually, the margins are not the same on downloaded music as it is physical music, but sometimes they are close enough that patrons shouldn’t feel guilty as long as they put the effort out to own their own copy in digital form.
Though the whole digital download era now feels a little abbreviated in the advent of streaming, many artists and independent labels still offer the option to consumers if you know where to look. Artist-supporting distributors like CD Baby and BandCamp are based around the model of fans downloading music directly from the artists they love. Downloading may not be long for this world—physical sales may be around longer than this option—but it’s still a better way to purchase music and preserve as much of your money as possible for the artist.
BEST Option 6: Purchase a physical copy (vinyl or CD) from a local record store or regional chain
If a middle man is going to make some money off of your purchase of music, make sure it is someone who is going to keep that music money local, who will stock albums from local artists or cool independent artists from around the country. Local record stores are still vital to local music economies, offering CD release parties and other promotional options for artists, and offering a hub for the sharing of music by local music lovers.
And don’t bemoan the regional chain of music stores. Just because a music store has multiple locations doesn’t put them on the same level as Wal-Mart. Sometimes stores like Hastings are the only options in rural areas for local listeners to purchase physical copies. If they go away, then sometimes the only option left is ordering online.
OPTION 6B: Purchase a physical copy from a big box store. With discounted prices and special deals worked out with distributors, who knows how much money ends up in the pockets of the artists when you buy an album at Wal-Mart. But for some rural areas, it’s the only option, and is still better then streaming the music on an ad-supported platform. Amazon with be another option.
BEST Option 7: Download an album or song from iTunes, Amazon, Google Play, etc.
Though if you do download your music directly from an artist or a company like BandCamp, there are plenty of options on how to import the music into your library, some people still like the convenience of using iTunes, Amazon, Google Play, or others, and their cloud, playlist, and recommended listening features. Purchasing from iTunes, etc. is one of the easiest ways to purchase music, but it’s also where the consumer starts to go down the slippery slope of supporting others more than they’re supporting the music makers with their dollars.
Nonetheless, it is still a better option than streaming for free on an ad-supported service, or downloading an illegal copy.
Is iTunes, Amazon, or Google Play better than the others to download music from? This is a hard question to answer since many labels, collections of labels, and major distributors work out their own specific deals with each download service. But something to pay special attention to is what service the artist or label asks you to purchase music from. Not only may they point you in the right direction for which selling partner will be more profitable for them, but sometimes it can be important for the performance on a specific selling platform. For example, iTunes charts continue to be used more and more by artists, labels, publicists, and the music industry to judge consumer sentiment in real time. So if an artist specifically asks you to order from iTunes, this may help their performance, and thus, the exposure for their music in these outlet-specific charts.
Amazon also offers rankings updated hourly, and unlike iTunes, uses affiliate programs to pay back artists or labels who refer sellers to them. So sometimes Amazon is the better option.
Also Amazon, unlike iTunes, offers physical copies of music. Though it’s not as good of an option as purchasing music from the artist or a label, buying a physical copy from Amazon may be a better option than downloading or streaming a record, depending on the deals and price points the artist, label, or distributor has set up with Amazon. Unlike iTunes, Amazon gives some flexibility to sellers on price, so they can offer deals and specials. On iTunes, the prices are mostly fixed.
BEST Option 8: Stream music from a PAID subscription service.
It’s $10 a month for crying out loud, and the amount of money this means for artists, labels, songwriters, and other music professionals can be vital to preserving their careers. It’s a mere penance for putting you in touch with vast libraries of music, and a mere $0.33 a day is a totally understandable convenience fee for not having to listen to ads, and in some cases to get better-sounding audio.
Is Spotify, Apple Music, or Google Play better for paying artists? There’s a reason Taylor Swift and Adele are not on Spotify, and there was a reason Taylor Swift stood up to Apple and won her case. Part of it is because Apple Music doesn’t have a free option (though they did have a free trial period). Spotify and YouTube are seen as the lowest-paying streaming service out there, but this partly has to do with offering a free option.
Though the payouts vary, according to Information is Beautiful, here is what the AVERAGE breakdown in payouts looks like. And note, this includes services that offer ad supported options as well, so if you do pay for your Spotify account for example, the payout is likely to be higher, and if you don’t pay for your Spotify account, it could be lower.
Average Payout per play (according to Information is Beautiful):
Google Play: $0.0073
Apple Music: $0.0013
Spotify: $0.0011 (offers ad-supported option)
Deezer: $0.0010 (not available in North America yet)
YouTube: $0.0003 (only from ad supported views)
So as you can see, Google Play and Tidal would be the best financial options, but Tidal is one of the least-used. Google does not offer user data.
WORST Option 9: Use an ad supported streaming service
If you’re at this level, you have to severely question just how much you’re willing to call yourself a music supporter. Though the ads do pay out to artists, it’s pennies on the dollar, even though these services are the most prevalent way listeners stream music. What makes it worse is that if you use ad blockers, YouTube users basically get the music for free. So if you are a cheapo who doesn’t want to pay for a subscription, perhaps you could at least turn your ad blockers off when you are streaming on YouTube to make sure the artists and labels get something. Same goes for when you go to independently-owned music blogs (like Saving Country Music) that also offer content for free, but rely on ads to survive.
WORST Option 10: Download your music illegally
Now you’re just an asshole, especially if you participate in file sharing of leaked copies. This is the exact opposite of supporting an artist. Listening to music before it’s been released for public consumption cuts into the artist’s metadata numbers, which costs them money, and placement on important industry charts.