I think we're almost done with this, finally: with a laptop, an Apogee Quartet and some $1000 ribbon mics (all easily resellable) you can make recordings as good as any studio, magic mixing board or no. And with Spotify, Rdio etc catching fire distribution will soon be no problem for the little guys. No need for big labels and dummy contracts.
But we have to make sure Spotify, Rdio etc are transparent about their payouts. The big labels are probably making deals to ensure they live on as gatekeepers to these services and right now they have the leverage. We have to demand openness so we don't see a situation where Warner gets 5 cents and smaller labels get 1 cent per play.
Spotify is horrible for artists. In some senses it's even worse than piracy because listeners think it's far, far better for artists than it really is. At least with piracy people know the artist isn't getting paid. http://www.digitalmusicnews.com/research/augustconcerts2.jpg
What makes it even worse is that Spotify itself doesn't make money! They are losing tens of millions of dollars per year, it's crushing all other distribution models, and artists aren't getting paid. It's basically the worst outcome for everybody all at the same time.
When it catches on with Mom and Dad and the country western Walmart crowd hopefully people will start making money.
And all we know is some artists are getting screwed. Warner, Universal, EMI might have made a deal where they get a decent percentage and smaller labels get peanuts, we have no way of knowing.
Doesn't take long at all to find out that the deals struck with majors included not a decent percentage, but actually ownership. Ownership means access to a revenue stream — good for labels, bad for artists who don't receive royalties on investment revenue.
Go beyond that one Google search, you can quickly learn that indie labels — the folks who win more than half the Grammys — don't get the same arrangement. So the music one their labels actually subsidizes the competition. They're not all that happy about that.
And lastly: artists. You can listen to them. Plenty are outspoken. For every Metallica getting onstage with Spotify there are many others essentially saying that they receive nothing — and that makes sense because the payouts are designed to work at scale, not at the level most working musicians operate.
Saying all this without judgement. I think the streaming market could be a good one for artists if it were more geared to driving direct purchases — but thinking about it as the answer is a problem. It's the start of exposure, like radio used to be, not the end goal.
See I think it is the end goal and it's going to replace CDs and iTunes really soon. I personally don't like Spotify but Rdio and Mog are incredible. And to have the major labels pulling the strings, which sounds like is happening, is probably a really bad thing.
You are forgetting a lot of stuff inbetween, not in the least the fact that even successful bands have a hard time making ends meet, major label or not.
Grizzly Bear, a very successful indie band recently had an interview where they spilled out everything. The band that opens for Radiohead and Paul Simon, is featured in ads for Volkswagen and Peugeot and sells out Radio City Music Hall.
They can't afford health insurance. After a tour they just about break even, and they make most of their sales from touring. Here are a couple of quotes from Twitter: "Mog and Spotify do not help bands or labels or indie stores. Not shaming you, just stating the facts since someone asked" and "Buying an album helps a band ten fold over buying a t-shirt, no matter what format. Again, answering questions".
The vocalist, Edward Droste, says that he doesn't even make a middle class living.
Here's the money quote from the interview: "“There’s a ceiling that independent artists hit,” he recently told NPR, “and the only way past it is radio.” And radio “still feels very much controlled by major labels’ ability to use leverage—you still have to have the muscle. Very few indie acts actually have breakthrough radio hits.”"
But we have to make sure Spotify, Rdio etc are transparent about their payouts. The big labels are probably making deals to ensure they live on as gatekeepers to these services and right now they have the leverage. We have to demand openness so we don't see a situation where Warner gets 5 cents and smaller labels get 1 cent per play.