He said,

The only group that is making less revenue is the record labels.

Reading the linked article and its associated chart, it does seem that this would be true, as nearly all of the revenue streams on that chart are rising, and the only one that’s falling significantly is for labels.

We’ve all heard about the horrible business practices of the record labels, and we all know the great success stories about how artists are now bypassing record labels and releasing directly to fans. Great! Let’s just do away with the labels then, let digital downloads be free, and everybody wins.

There’s just this one little problem: the revenue lines on the graph are only labeled right for the old music industry business models.

In the brave new world where artists self-release, or run their own micro-labels, that big ol’ declining line at the top labeled “Recorded revenue (to labels)” should really say “Recorded revenue (to artists)”.

“No problem,” you might say. “They can make up that revenue in live performance revenues.”

Hmm. A couple of problems with that.

First, some artists don’t tend to perform much. Suck it up and play live, I guess is the answer to that. (Or just resign ourselves to music being a money-losing hobby.)

Second, other artists might perform, but find it hard to turn a profit doing it. Last weekend, I tweeted:

It was a great show, and I believe it was sold out. But it was sponsored by a couple of the aforementioned micro-labels and a bed & breakfast to supplement ticket sales enough to meet the expenses of producing it. Why? Click the link to see the stage setup and you might get an idea of why it was expensive to put on. And even though this was a sold-out show, this sort of music doesn’t exactly support huge night-after-night audiences. (We tried to get a similar concert series going in Pittsburgh, and practically had to beg people and offer rides to get people into the seats. Clearly a large and well-established series in Philadelphia is about enough for Pennsylvania.)

My point is that live revenues work well for some artists, but they aren’t going to do it for everybody. Many musicians are still very interested in revenue streams from selling recorded music; it’s not just the record labels.