SXSW 2012: Artists, you have 42 different ways to make money

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The music industry in 2012 was characterized as one of ‘micro-pennies’ at this year’s South by Southwest festival and conference. The phrase was used by Rich Bengloff, who heads indie label trade group the American Assn. of Independent Music. ‘Access and getting noticed is harder because everyone has access,’ he said.

Nowhere is that more evident than in Austin, Texas, this week. More than 76,000 albums were released in 2011, Bengloff said, and more than 2,000 artists are in Texas this week. The five-day-and-night event was winding down Saturday afternoon, as industry heavyweights stood in line not for concerts but for that rare Austin cab.


There was still music and business to be had, of course. Jazzy chanteuse Norah Jones and noisemakers Sleigh Bells were the name acts among those slated to play at Austin’s more than 90 venues Saturday, and plenty of revelers still hadn’t had their party fill.

PHOTOS: South by Southwest

Celebrity chef and TV personality (maybe not in that order) Rachael Ray threw her annual party Saturday, and fancy sloppy-joes and mini-corn dogs were as big a draw as the artists. In an old-fashioned bit of promotion, reps from Warner Music Group stalked the line handing out CD samplers for newcomer LP, who has the kind of show-stopping, booming voice that draws standing ovations on TV singing competitions.

LP was something of an anomaly among SXSW’s more than 2,000 acts. Her rootsy rockers -- she has an arsenal of ukuleles -- build to the kind of big, old-fashioned choruses that were once a major label’s stock in trade. While no one will debate her ability to command a stage, one can easily picture the tiny, curly haired singer rocking out with Sheryl Crow.

While she has the support of one of the world’s largest music corporations, LP didn’t appear to have any noticeable leg up in Austin. At Ray’s party, she was tucked into the tiniest of stages, and despite the WMG reps circulating in the crowd and nodding their approval, she’s entering an industry that appeared in Austin to be as uncertain as ever.

‘You’re not going to make a living on touring and albums and merchandise,’ Bengloff bluntly told SXSW attendees. ‘You need to be much more diversified.’


Indeed. Why not try selling Prisms?

Early Saturday, experimental electronic musician and label owner Nicolas Jaar showed SXSW attendees his next album. He held up a cube, which he calls a Prism. ‘Can you stand up and hold it,’ shouted one of many fascinated audience members.

The tiny box houses 12 songs, will sell for $40, charges via a computer and has two headphone jacks. Why two? ‘The point is that you’re listening to the music, and if you’re listening to it alone then someone is missing,’ he said.

As music moves to the digital space, either via hard drives or cloud services, making a connection, as well as selling a product, has become a challenge. ‘What is the equivalent of a cheer, a scream, on a computer?’ asked Alex Asseily, founder of audio company Jawbone. ‘Those moments when you have those emotions, that’s when you can monetize.’

The good news, perhaps, is that there are more ways than ever to bring in cash. Artist lobbying group The Future of Music Coalition revealed at Austin the results of its two-year research project into how artists make money. Jean Cook, one of the architects of the project, specified Saturday to Pop & Hiss that no single artist is, of course, benefiting from all 42 potential revenue sources that her group has identified. A classical artist, for instance, may have access to only two or three, she said, whereas a singer/songwriter may be able to pull from as many as 25 different sources.

In addition to the expected sources, such as merch, concert ticket sales or, in the case of symphony musicians, employment, the Future of Music Coalition found artists make money from teaching, speaking engagements, fan-funding, acting, YouTube partnerships, persona licensing, session musician work and myriad national and international publishing groups. More than 5,000 participated in the survey, and nine provided the Future of Music Coalition with detailed financials from the past four to 12 years.

By examining the books of a successful indie rocker, for instance, the Future of Music Coalition found thant nearly 40% of his expenses go toward travel, and more than 30% of income stems from live performances. While publicity accounts for nearly 10% of his expenses, record sales make up less than 4% of his income.


Here in Austin, we’ve barely had time to scratch the surface of the data. There are plenty of notable nuggets throughout, such as the conclusion that a full-time jazz band member makes three times as much money in foreign territories as in the United States. All told, just more than $55,000 was determined to be an artist’s average income.

Cook said the group is still collecting data, and it will become more valuable in the coming years, as the Future of Music Coalition will be able to track what’s changing and what isn’t. A primary goal, she said, is to provide Congress with some tangible data as to how musicians themselves live, while groups such as Bengloff’s and the RIAA represent the industry.

Policy makers, she said, ‘come to us and say, ‘We’re hearing this from the RIAA, but what are you hearing from musicians? It’s a big data gap.’

Whether or not those streams of ‘micro-pennies’ can ultimately sustain the industry may still be a matter of debate. Until then: ‘It’s just nice to have facts once in a while,’ Cook said.


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-- Todd Martens in Austin, Texas