In 2008 there were only 112 (albums) that sold over a quarter of a million. So if you think that the major labels only make money – they can’t justify their existence at the size they are on records that sell over a quarter of a million. A good part of those records that sell over a quarter of a million they hoped would sell over a million or two million, and only sold a half a million or less. So they overspent on them and didn’t make money on them. So those 112 records are the only records they could make money on at all. Probably 25-50% of those didn’t make money either. So only 60 releases make money, and the amount of money they make except for maybe four or five giants hits – the Lady Gaga and Black Eyed Peas level of hits – aren’t really making significant money. In the old days, one hit used to pay for 20 stiffs. Now one hit doesn’t even pay for one stiff.

The labels, both majors and independents are more conservative; they’re not going to take risks on artists or invest in artists just because they hear the demo and they like the songs or just because they can pack a house. That’s not enough – at least not the major labels. They need to know the artist is going somewhere between 30 and 60 miles per hour already to make an investment in it. They can’t start from scratch anymore, because so few artists are breaking.

Here’s another statistic in 2008 there were 1500 releases that sold over 10,000 album units. Out of that there were only 227 of them that were artists that had broken 10,000 for the first time. So in the whole year only 227 of the artists were artists that had broken what we call the “obscurity line.” When you sell 10,000 albums, you’re no longer an obscure artist; people know about you. You may not be a star yet, but you’re in the game. That gets you out of the glut and into the game. We looked at the 227 and identified that only 14 of them were artists doing it on their own and all the rest were on majors and indies; a little more than half were on indies. And that includes Lady Gaga in that number of 227. It includes the biggest artists and ones that sold 10,000 as well, whether they sold a million or 10,001. That’s a pretty daunting number.

Full Article at
State of the Music Industry Pt1

State of the Music Industry Pt2

State of the Music Industry Pt3

State of the Music Industry Pt4

I really recommend you read the whole articles to get a full picture of Tom Silverman’s opinions and the data that he’s basing it on. The article has really touched a nerve with quite a few independent musicians and with people helping to support musicians and their work that fall outside of the mainstream reporting systems like soundscan etc. For a really good considered response then check out Quick thoughts on obscurity from Steve Lawson and How people use neilsen to hurt musicians from Jeff at Tunecore.

Also mentioned on Music Think Tank , Hypebot , Digital Music News , TechDirt, Billboard.Biz , Cnet, Lefsetz.

By far one of the most enagaging and genuine people I met at Un-Convention, Steve followed up the panel session with a great blog post about all the ideas he had that he hadn’t had a chance to share. Check it out….

Brainstorming new models for music careers

To see Steve performing with his loop pedals and Lobelia check out the below video. It gets gorgeously strange by the end

The bottom line is that they sold themselves as an ongoing business concern rather than on the basis of the artistic worth of their music, which is a good lesson to learn! By emphasizing the gigs, previous sales and previous earnings they had done they managed to convince Peter Jones that his money wouldn’t just be a donation to fund their art but instead a genuine business investment that would see a return. When you are approaching record labels or other investors it’s important that you don’t just make the pitch entirely about the music unless they are the sort of person or organization who likes giving away money for free.

Links to related articles

http://musicblog.merseyblogs.co.uk/2008/07/hamfatter_are_a_trio_from.html