I hope all is well with you and yours.

I worked at AWAL as its U.S. SVP of Business Affairs from 2018-2023, and it was amazing to see how many indie artists at AWAL were earning real money while owning their recordings and controlling how and when they were released and licensed.  As an attorney, I can’t share details, but Kobalt’s founder, Willard Ahdritz, summed it up pretty well in 2020 in this and other articles: https://www.musicbusinessworldwide.com/hundreds-of-artists-are-now-earning-100k-per-year-via-kobalts-awal/.  (Sony bought AWAL in 2021 and, when I left two years ago, it was still very much the same company.)

As Willard said, there is a significant and growing “middle class” of artists who generate enough streams to net at least $100k/year.  This isn’t a myth or an urban legend.  These artists exist.  I’ve seen it with my own eyes.

Based on average broad-stroke streaming “rates” (which are constantly evolving), it may take about 3,200,000 monthly streams for an artist to earn $100k/year.  While 3,200,000 may appear to be an intimidating number, that’s roughly the equivalent of 25,000 fans listening to a 15-track album just twice a week, or 100,000 fans listening just twice a month.  Most of these artists fly under the media’s radar because they build their fan bases primarily via digital marketing.  This simply would not have been possible pre-Spotify.

I’m not suggesting that Spotify is some kind of savior or can do no wrong.  They’re a business, after all, trying to maximize profit.  But, without Spotify and Apple Music and the other DSPs, there would be thousands of currently successful artists stranded on the outside looking in, as they were 30 years ago, trying to figure out how to get their songs played on terrestrial radio and how to secure shelf space for their new CDs at record stores.

Dan Stuart

General Counsel

Seeker Music

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We talked about this topic extensively when I did your podcast…and I still don’t get why people don’t get it.  The details are no more arcane and complex than they were in the physical distribution era (in fact, much of the business is simpler and cleaner) and the basic math is pretty simple.

Ultimately, it’s about ownership vs. loanership.  If you own your masters and publishing (as we do for the Presidents’ debut) and have any traction with listeners, you’re going to make money.  And more of it, in a more clearly accountable way than if you had to distribute physical product.  I.e., you get a monthly accounting from your digital distributor with transparent tracking of your usage and payments, versus a 100-page statement once or twice a year from a label or distributor, typically riddled with holdbacks and exceptions and other minor mechanisms designed to rip you off.  Ask any major label artist or indie label owner about this.  I know multiple former indie label owners who had good distribution deals in the physical era but in the end gave up, tired of dealing with inventory and getting the product out there and getting returns back, etc.

And you are also right about artists’ odd sense of entitlement.  The cream will rise to the top, and there’s only so much cream.  Not to mention that it’s impossible to predict what the cream will look and taste like…case in point, I have absolutely no freaking idea how a band as weird as ours could ever have possibly broken out, but it happened and it happens over and over.

best,

Dave Dederer

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Every time I speak at a conference, I have to re-explain this too.  Once a false narrative takes hold, it is very hard to change.  In every era, no matter the format or pricing model, regardless of genre, popular artists made a lot of money.

If you are popular, you make money.  If you are not, you complain.

Scott Cohen

“The Truth About Streaming Payout – Take a closer look at the actual math behind real music royalties.”

https://spotifynews.substack.com/p/the-truth-about-streaming-payout

Even I missed this story, which was published a week ago. I caught it in today’s Record of the Day e-mail.

I constantly get e-mail from people claiming that Apple pays more per stream than Spotify… But the devil is in the details. THERE IS NO PER STREAM RATE! Furthermore, the more people stream on a service, the less a stream ultimately pays out…

But I don’t expect this story to EVER be accepted by the general public which is somehow convinced that Spotify is the devil…

But that’s the world we now live in. One in which you can’t get a message to everybody and people run on emotion rather than fact. Don’t even get me started on the endless stories about measly payouts on Pandora… When it comes to publishing… How much of the song did the writer contribute? Who owns the publishing? There’s a hundred cents in a dollar. Maybe half is taken by the publishing company and of the fifty cents left… If there are ten writers, each gets a nickel.

Never mind that on demand streaming pays more than radio streaming. I.e. if you pick and choose the tracks, it’s a higher rate than if they are served up to you radio style.

It’s really not that complicated, it’s just that the internet and the advancement in tools has eliminated the barrier to entry…everybody can play/put up their songs on streaming services…and then they complain they are not getting paid enough!

And then there are the artists who were supported by the major labels in the pre-internet era. Well, not only do they no longer have major label deals, not many people are streaming their music. If people are not listening, should you get paid?

What is the number of people who should be able to support themselves as full time musicians? Think about the number of people who can play in the NBA…or in Major League Baseball. It’s a thin elite of highly-compensated players. Most people can’t get paid at all, and those in the minor leagues that exist get paid a pittance. But everybody in music should be able to earn a living wage?

Everybody keeps telling me I’m on the wrong side of this. That Spotify and streaming are truly the devil.

And this is why we can’t have a discussion. Because we can’t start with the facts. Read the above article, it’s simple and clear.

But it doesn’t square with your emotions…

So we live in a world where few know the facts and when confronted with them they deny them.

So most in the music business don’t even bother to explain themselves, it doesn’t make any difference. It reminds me of the sixties, when people believed music should be free… Funny how now everybody is complaining they can’t get paid…

If you’re a fan of the man and his bands you’re gonna love this book.

I met Derek back in 1990, when I wrote about the Rembrandts, a band on his nascent label, Atco. Their manager sent me an advance cassette and I loved it. It was a return to form for Danny Wilde, who’d made a great solo album for Island, “The Boyfriend” (one of my absolute favorites, I play it regularly to this day), but Danny could never quite hit those heights with his subsequent records on Geffen. But after reuniting with his old buddy Phil Solem, the magic was recaptured, and I loved it.

This led to not only phone calls, but endless get togethers with Derek. Who I could relate to. Maybe because he was a musician before he was a suit.

Actually, I remember going to lunch with him at the Ivy, whereupon he complained…why are we going here? He could afford it, but he wanted something more down and dirty than my pick.

And Derek would talk like I knew all of his history, but I didn’t.

You see Derek was a teen phenom as the frontman of Simon Dupree and the Big Sound, which had a slew of hits in the U.K., but meant nothing in America.

As for the follow-up band, Gentle Giant…the only album I owned was “Giant for a Day,” which Derek told me was one of their worst!

I’d only dipped my toe into Gentle Giant, because how many prog rock records could I afford? I was into Yes from the very first album (do you know their version of “Every Little Thing” by the Beatles? Killer!) And I hate to tell you I really got into Genesis after Peter Gabriel left the band, “Trick of the Tail” with “Squonk” is amazing (and don’t criticize me too much, I bought Gabriel’s first when it was released, and every one thereafter, and went back and bought the Genesis catalog), but Gentle Giant did not break through in L.A. and after I bought that one album…

But in this book, Derek delineates the history of that band.

You see Derek pivoted back before the techies brought that concept to the forefront. He didn’t want to keep playing the same old pop, he didn’t run it into the ground, Gentle Giant was new and different and gathered fans and accolades but eventually the writing was on the wall and Derek crossed over to the other side, with Polydor…starting as a radio promotion man and then working his way up to A&R, where he signed…

Bon Jovi.

And Cinderella.

And as a result of all this success, he was given his own label under the old Atlantic moniker, Atco… Where he had success with not only the Rembrandts, but a resuscitated AC/DC and more and then Doug Morris stole the label out from under him. Brought in his crony Sylvia Rhone…Derek could have theoretically stayed, but once again the writing was on the wall. This was over.

So he ended up working with Cees Wessels and grew Roadrunner into a monolith. You know, with Nickelback. Ha! I remember Derek sent me a box of CDs and I said that was the one even though he was focused on other acts, and a few years later Nickelback blew up. And I know you hate Chad, but “How You Remind Me” is a fantastic track, truly.

And underneath this entire journey was Derek’s Jewishness.

Sure, a lot of suits were Jewish, but not a lot of musicians, and those who were didn’t make a big deal of it. But Derek was the first to hip me to the technological breakthroughs of Israel and… Derek owned who he was, with no airs, he’s a good guy.

So do you need another rock biography?

As I stated at the top, if you’re a fan of Derek, definitely. As for the rest… There’s a lot of focus on the early days, which most acts never delineate in their books, they go straight for the breakthroughs. And those are the most interesting pages, the early days in the U.K. Calling off his engagement to a wealthy woman whose father would bring him into the business because it just didn’t feel right.

This exact story hasn’t been told elsewhere. Because there aren’t that many people who had success on both sides of the fence.

But Derek did.

I read his book in a day.

I was interested. I think you will be too.

I wanted to write about this book because of the endless stream of CEOs… People have this idea that Patagonia has always been smooth-sailing, but that is not the truth. Yes, the company was started by Yvon Chouinard, but what people don’t realize is this visionary is a mercurial man who has contempt for his workers… Yes, you hear all about the surfing breaks, but Chouinard keeps believing his workers are slackers and don’t deliver.

Meanwhile, he doesn’t want to be hands-on. He’s always off on extended wilderness trips and then he comes back and cocks up the works, having no idea how the company is run, never mind not always having good ideas.

There’s this belief that the success of these companies is linear, once they catch fire it’s onwards and upwards, but not with Patagonia.

Chouinard was a climber who was dissatisfied by the day’s pitons who became a blacksmith so he could make better ones. But once he gained traction, he was horrified at the results…scarring of the rock walls, so he killed his own business, just like Clayton Christensen said to do in “The Innovator’s Dilemma” and switched everybody to chocks… Putting his business in jeopardy, but changing the entire sport for the better in the process.

Not that every innovation was linear. He decided to use organic cotton… Which gummed up the works, literally, and colors faded and… God, you read this book and all the failures of Patagonia are pointed out and you almost wonder how the company survived (and at one point it almost didn’t), since Patagonia prides itself on quality products sold at a premium price.

I first heard of them in Utah, back in ’75, my housemate had these pants he got from the Great Pacific Iron Works… He couldn’t stop testifying about them, even though they were baggy and the opposite of the skiwear of the day, and Tom kept saying this guy Yvon Chouinard was a visionary manufacturer but I thought he was just another Frenchman yet it turned out he grew up in Southern California…

And then I heard about Synchilla. The initial fleece. Which I bought in the early eighties, when almost no one had heard of Patagonia… In truth, the jacket was boxy and not exactly form-fitting, but I testified about its warmth even when wet and then a few years later fleece was everywhere…still is.

And I’ve bought a lot of Patagonia stuff, but it’s become somewhat of a cult, and I’m not enamored of all its members… You see them on the slope, they wear this boxy stuff that is layered… I guess it would be okay if they didn’t look down on the rest of us. I mean the stuff is functional…but far from the height of style…

But I was hiking at Vail a summer ago and it started to rain and I was kind of enjoying it, figuring my Marmot jacket was protecting me, but when I got back to the condo…I couldn’t warm up. Hard to believe, but I had symptoms of hypothermia, I started to freak out, I jumped into the shower and had to stand there for minutes before my body temperature rose. That’s when I decided I needed a better rain jacket.

So I did the research. And all agreed that this Patagonia jacket was definitive. And it was in stock in Vail, but not sure what color I wanted I went to the website to see the range of possibilities and found out it was ON SALE ONLINE! List was $179, but it was offered for $124.99 and I clicked to buy it and I’ve been pondering writing about it ever since, telling you about it, and here is my opportunity.

Unlike the lightweight Marmot jacket I had and the North Face one before, this Patagonia Torrentshell 3L actually keeps the water out. (However, it is a bit thicker, a bit stiffer, so not as squeezable/packable as the competitors, but it keeps you DRY!)

https://www.patagonia.com/product/mens-torrentshell-3-layer-rain-jacket/85241.html

I guess I’ve got one foot in the cult.

Anyway, Chouinard famously “gave away” Patagonia, but I was more interested in what came before.

And reading this book I realized Chouinard was a rock star. He had a vision and it had to be done his way. He refused to go public, take outside money, because he knew it would mess with the business. And how much money did he need anyway? He’s the opposite of the titans you see in the news, accumulating ad infinitum. And at this point people know the story, but they don’t know how difficult, even headstrong Chouinard is.

And people don’t like controlling, headstrong people. Which is why if you are one, you can’t play nice, you’ve got to find a lane where you can operate unhindered. In a country where everybody wants you to get along. And to play by the rules. Chouinard is the antithesis of this. He’s all about conservation, saving the planet, and if his minions get arrested protesting corporation/government overreach, he supports them…even when it’s bad for his business.

Don’t read this book to learn how to emulate him. Chouinard is one of a kind.

But know you don’t have to do it their way.

Then again, Chouinard seems to be the only person doing it his way.