Long read: The Death of the Middle-Class Musician

The rise of the internet has polarized the world of creative arts. Both in writing and in music, the superstars now make more money than ever before and do so on a global scale without precedent (think Taylor Swift, think Salman Rushdie). At the other end of the spectrum, the internet has made it very easy for young artists to enter the trade – you can self-publish your book on Amazon for a few thousand rupees or self-publish your music on Spotify.

The challenge the internet has created is for the artists in the middle – those who have made a bit of a name for themselves, have won a few awards but are not yet megastars. The middling artists are just about getting by even though to the outside world they seem to be doing just fine. In fact, during Covid, we self-published a book on Amazon but less than 5K people bought it. We gave up self-publishing after that.

This long read from Canada is about why the internet has redistributed the spoils of creativity like so. The obvious business opportunity it has created is for someone who can take the middling artists and give them a better deal because, as we all know, Taylor Swift can take care of herself. Luc Rinaldi, writes for The Walrus about an up-and-coming Canadian artist named Rollie Pemberton (aka Cadence Weapon) and his recording company, Upper Class:

“Rollie Pemberton was barely a teenager when he started rapping. His hometown, Edmonton, didn’t have much of a hip-hop scene in the early aughts, so he honed his craft online. He plugged an old-school microphone into his mom’s desktop computer, recorded a few verses, later turned them into tracks, and sent them out into the burgeoning music blogosphere. Within a few years, he’d adopted the emcee name Cadence Weapon and earned a reputation as a shrewd critic and sharp lyricist….

A Toronto-based indie label called Upper Class Recordings took notice and offered Pemberton recording, publishing, and management contracts. The so-called 360 deal came with a $1,000 advance, barely enough for him to record his first full-length album, and it entitled the label to take a cut of all his future revenue streams, including album, ticket, and merch sales. Even at nineteen, Pemberton knew the terms weren’t ideal. But in 2006, he signed the deal, reasoning that it could be his only shot at stardom…

Behind the scenes, however, he was scraping by, living off earnings from freelance writing gigs, informal DJ sets, seasonal retail shifts, and $11,130 worth of additional advances that Upper Class paid him for his second and third albums. All the other money he made was being collected by Upper Class; per Pemberton’s contract, the label was entitled to collect his portion of revenues (20 to 50 percent, depending on the source) until they’d fully recouped his advances as well as tens of thousands of dollars the label had invested in recording, marketing, and touring, including covering the costs of Pemberton’s flights, car rentals, and hotels. As a result, he was playing hundreds of shows a year yet making no money.”

So, why do the Pemberton’s of the world struggle to make money?

Firstly, by democraticizing publishing of music and access to customers, streaming platforms have shifted the rewards of publishing away from the artist and towards the platform. Luc Rinaldi writes: “By then, fans had almost entirely migrated from vinyl records and CDs—formats that once earned artists roughly 10 percent of profits—to streaming platforms like Spotify and Apple Music, which were paying at most half a penny per listen. On streaming platforms, only a handful of Pemberton’s songs earned more than a few hundred dollars. Even his most commercially successful single, “Connor McDavid,” a pump-up anthem that’s been streamed more than a million times, has earned him less than $3,000 over seven years.”

Secondly, making money from live events has become harder for middling artists because what everyone wants to attend is the megastar’s concerts: “Before COVID-19, Pemberton could rely on live-performance revenues to offset the decline in physical media sales. But for a time after the pandemic, touring became just another way to lose money. In 2021, Pemberton played twelve American cities in support of Parallel World. It was a lean operation—no tour manager, no road crew, no backing musicians. He did his own PR, sold his own merch, and drove his own tour van. Still, with inflation driving up the price of gas, food, and accommodations, Pemberton ended up $2,100 in the red. “If you try to do a headlining tour as a middle-class act nowadays—unless you have a really good team and a lot of solid planning and a [group of artists] you’re rolling with—it’s a fool’s errand,” Pemberton told me. “The margins are getting thinner and thinner.””

Thirdly, middling artists who are desperate for a break often operate without advisors and tend to get coerced into signing contracts with unfair clauses, Mr. Rinaldi writes: ““The carrot that’s being dangled in front of an artist is their dream,” says Kurt Dahl, a Saskatoon-based entertainment lawyer who cut his teeth drumming in One Bad Son, a rock-and-roll road band that opened for the Rolling Stones and Judas Priest in the late 2010s. “When people’s dreams are in play, they’re often not as rational or reasonable as they might be in the regular business world.” Dahl says he’s reviewed contracts that require artists to pay thousands of dollars in “signing fees” or bizarrely charge artists for “breakage,” an outdated charge meant to cover costs of LPs and CDs physically damaged before sale.

Labels get away with these kinds of contracts because their support can make or break careers, especially at a time when anyone can record their own music, upload it to Spotify, and promote it online. More than 100,000 songs are uploaded to streaming services every day. Each of those tracks has to compete not only with 99,999 other new ones but also against basically every song ever recorded. “You’re up against everything, from everywhere, all the time,” says Patrick Rogers, chief executive officer of Music Canada, an organization that represents the country’s major labels.”

Fourthly, three big labels control the music trade – Sony, Universal, Columbia. These are the only labels Spotify and Apple take seriously and beyond a point the big three are not interested in cultivating art, music or artists. Luc Rinaldi writes: “The majors can better get artists’ tracks onto popular Spotify playlists and license those songs in films, TV series, and video games. (Mid-tier musicians often get paid a one-time fee of $1,000 to $10,000 and piddling royalty rates when shows use snippets of their songs—nice but not life changing.) Labels can also help artists line up opening slots on big-budget tours and handle the marketing, legal, and administrative work that goes into building a blockbuster career. But if artists don’t blow up as expected? They get dropped. “Sadly,” says Dahl, “for a lot of those artists, it doesn’t translate to longevity or a reliable career.”

This is a moot point for most artists, however. Globally, the big three signed just 650 acts in 2017, the last year for which data is available. They’re not interested in working with the majority of Canada’s 37,500 professional musicians. Likewise, most of Canada’s musicians aren’t particularly interested in playing stadiums or posting multiple TikToks a day.”