This week we’re talking with David Macias, President and Founder of Nashville-based Thirty Tigers. We’ll discuss the origins of the label, how their business model has changed over the years, how they approach A&R as well as artist development, and discuss independent release plans (label or not) … and David will spill the tea on the current uproar over the streaming economy.
Skip to ~22 minutes if you’re only here for the Spotify/streaming talk.
To read more of David’s thoughts on Spotify and the streaming economy in general, check out this piece in Rolling Stone, as well as David’s full written notes here.
TRANSCRIPT
[00:00:00] Frank: Okay let’s just start off talking about 30 tigers, the Genesis of the label. And I know it was just you in a room at one point in time and walk me towards that initial business model how that changed over the years and what it looks like today.
[00:00:16] David: Yeah. First of all, in, in fairness to my co-founder Deb, Markland who I started the company with, it was being my bed guest bedroom and her guest bedroom. And and although, she remains a dear friend and then honored it has an honored place in our company’s history.
She after a few years, dipped out to focus on the, her family, her growing family and both of us were refugees from the major label. And, as I like to say, I, I used to work for the majors, but they invited me to explore my destiny elsewhere.
Honestly when the company started it, it definitely was not, it definitely was not what it is now. The only in the most broad sense, did we have the same sort of mission? And rather than, probably the insight that I’m proudest of having, in, in the beginning was that rather than just try to get one label to hire me or us Deb and I as a team what we should do is to rather than have somebody pay, pay me a hundred thousand dollars a year, I’d rather get 10 people to hire me for $10,000 a year because all of these companies were individual artists or startups that were only going to put out one or two records, if they were paying me a salary Like that, then my very presence would be a huge inefficiency.
I would be a financial albatross around their neck. So we started a company to basically serve all of these the startups and individual artists who were, as the great downsizing was beginning were cast out. And and I, and then we wound up getting hired, quite, quite a bit.
And then about a year into that we got approached by red distribution, who is now the orchard and they said, Hey, we love the work that you guys do. You guys. Really prepare our sales reps for, going into, make the sale. And so we want you to bring everything through us and and what, what they had proposed was not necessarily what we do now, but it was that we wound up doing.
But the thing that I realized at the time, and so I, went back to them with was like, okay look I’ll, I’d love to do this.
Basically I was talking to, any of the distribution companies that our clients, we’re working with. And so I said to them like, look, I’ll bring everything to you, but what I want to do is. Rather than I just tee things up for you and you sign the deal.
I want to sign a deal with you. And then I will sign, people because, at that time this was 2001 it was 2002 at that time. And so this was a year before iTunes, launched or anything like that. So if you didn’t have physical distribution, you were just dead in the water and it was a very existentially important issue.
And so what I wanted to do was to basically have the power to bestow distribution on clients. And the, and the model that we set up was rather than. Rather than just charge them a monthly fee or anything like that. We became a small stakeholder, but we would work for a BA a backend portion of the proceeds with the, one of the reasons being that if things really worked, we’d or insignificantly more money than if we just charged a monthly retainer for four months.
The other part was that in terms of startup costs if we weren’t getting paid a monthly retainer, then we would then that could allow them to hire a better publicist because the capital they had to invest with. Was going towards more, productive, sings, it might help them hire radio promotion person that they’re available capital on hand.
Wouldn’t allow them to do it. So it wound up being a win for everybody. And and then, from that point, we started distributing through them and it just slowly but surely through the years we would bring on additional clients and then, we’d grow and then we’d hire another person or two, and then we’d grow.
And and also artists can come and go as they want, they could be free if greener pastures, they get a label deal or something like that. They’re free to go.
And so by design, we had to grow very slowly and organically through the years and, that’s that’s what we’ve done every single year our revenues have gone up in the 20 years we’ve been in the distribution business, 20 or 21 years, and every single year we’ve had we’ve had our sales have grown, so we’ve been on a steady incline and it’s been great and artists, they get to still, get to keep ownership of their work.
And through the years, as we’ve grown and grown, we’ve been able to populate the company with a really incredibly good staff in my opinion. And there’s no diminution of the, the quality of efforts, but, in marketing compared to a more traditional label, in fact, I’m a little biased, but I think we’re even better than a lot of the labels in terms of being marketing advocates and and all that for on behalf of our artists.
But that’s more or less the 30 tiger story.
We do try to, in terms of the artists that we bring in, there’s definitely a philosophy of of, the artists that we wind up working with and bringing in and and we’ve, through the years that we, one thing about being in business for a long time as you, you make a lot of mistakes that you can learn from.
So through the years we’ve developed a certain philosophy about how to, take music to the market and have become, really eager students of the economics of it all so that we can, give Sage advice to our, to our artists and sometimes things don’t, don’t work as well as we’d like them to, but, we, we always, anything that we put out, we believe in a hundred percent and we’re honored to go, fight on behalf of that artist. And I think we, we bring I think we bring quite a bit of value.
[00:05:41] Frank: Talk to me about ANR, how many. How many releases are you guys dropping in any given year? Obviously the last couple of years may be a bad example.
[00:05:52] David: We put out about 50 records a year and, that’s and that’s held steady through the pandemic. There, there was a lot of shifting around, because certain artists were, they had different philosophies about it. It was more like some of them were like we need to push our record back so that we can, tour.
[00:06:08] Frank: How do you how do you scout artists, vett artists, what makes it 30 tigers artists for you?
[00:06:14] David: I think for most of them, because most of the artists that we sign are more press driven than anything, there, there are, some commercial country acts that we work with where, the idea of, every artist, even commercial artists have narrative, like Kenny Chesney is a great example. Kenny Chesney I believe that guy, he loves to be on the beach, drinking rum with his friends.
I think that’s who he really is. And he sings about it a lot. So there’s like a, it’s a very Jimmy buffet, ESC narrative around him, but, commercial X can have, can have narrative, but I think that for more press driven acts where you’re really dependent on the journalists of America to tell that story.
If you want morning edition to do a piece about your artists, they’re going to have to talk about them for six minutes. And that producer is going to have to feel like there’s a compelling story to tell, and if we don’t understand the story or that, we think, and sometimes, we think that the journalists will want to tell a particular story and they have no interest as it turns out.
But, we always feel like that there’s a story, behind that artist. What we, and what we try to do is bring the, sort of the gap between the artist and their work. We try to narrow it as much as we can. So try to almost like the sort of like with Greek drama character is destiny.
Who is this artist? Who is this human being. And what have they experienced or what have they seen in the world that moves them? So that, they, that they are that how that sort of flows out of the, in our, through artistic expression seems inevitable, because then you have the sense that the you’ve got an authentic artist.
And we try to really understand. You know what that story is.
And that do we feel like we know how to navigate those mediums in order to build enough of an audience to do it. And then we try to be, super organized around it by, the knowledge that if you’re going to convey a story about an artist or, how, however that comes to be that you’re going to have to compress those stories within a a condensed timeframe so that, you get the sense of ubiquity.
It takes a lot of pre-planning because going to want the artists touring in, appropriate markets.
And that takes months and months in advance to plan that out with the agent. Also, weighing, a factor that weighs in there is who is this artist’s agent? Do we have faith that they’re going to be able to do the, do the work that they need to do to get that artist in to specific markets?
Luckily I’ve done this for a long time. I started in retail when I was record retail when I was 15 and I’ve never done anything else. I like to say that either shows a real love of music or a real lack of imagination, I’m not sure which, but but I’ve done this for a long time and you just, after a while you just get a sense that okay, I know how to tell the story.
I know how to organize this campaign. And when we do that and I share a, and our responsibilities with a woman named lead in a, up in New York, who’s a real classic, a and R type of person and knows, producers and knows, she’s, she’s going have connected with artists and attorneys and stuff like that.
And, my background, I sold the Alan Jackson records to Walmart. So I had to learn how to be a decent ANR person Lee and I sharing those responsibilities and we have a couple other people in the company.
We hear a lot of, good music that I’ve been like, okay this is really good, but it’s we just don’t know quite how to tell that story, and we’re not serving artists well, if we, take something on and we’re kind of like, well, we’ll figure it out.
You don’t want to fuck people’s shit up, and and it’s not, it’s a way to, to grow a reputation. And we had to learn through, growing that just when it was then it was, it’s actually a gift to an artist, not to say yes and bring them in and book their shit up, so sometimes, we’ll have the passion and the vision, and then sometimes we won’t so that’s our, and our philosophy, yes.
[00:09:53] Frank: It’s a fair one. I totally get it. You leaned into it. So let’s just go right there. Sure. Talk about the deal structure. Is it the same across the board?
Or, you work case-by-case kind of thing?
[00:10:05] David: It’s largely the same across the board. And I’d say the vast majority of the, of our clients are artists. We do have a small handful of labels that we, that we serve they’re our clients and whatever their contractual relationship with their artists, we don’t really, no and it’s not really our business, but we’re there to serve both, label and artists to just do the best job, that we can, I tend to shy away from labels because if we turn the, the decision-making about the art that, comes through our doors over to somebody else and half of the stuff they re, we’re really passionate about. And half of it are like, why are they, like we don’t get that at all. Then all of a sudden we’re, spending a lot of time. It just, it doesn’t, it actually doesn’t serve the label or the artists. And so I, I tend to be very judicious about that. But I’d say, 80% of what we put out is just as direct with the artists forms their own label. And the basic deal structure is that the artists keep ownership of their work.
From day one, they own it outright. We don’t license it, we don’t own it. And they earn about 75% of the gross revenues that come through the distribution channel. And then the remaining 25, we share with the orchard. So we’re working for about 10 to 12% of the gross revenues now, any expenses that come and we’re pretty, we’re pretty competitive when it comes to advances, even though we don’t own the work, but, we will, provide artists, advances and it’s up to, Lee and I, to make sure that we’re not, that we’re judging the risk accurately because we work on such thin margins so , just say the roughly 10% that we earn our goal is to is to spend, 7% of that on overhead.
So our goal is a 10% gross margin and the 3% net margin. So of the 75% that the artists gets any advances that we give them any money that we spend on their behalf. Which they have to approve by the way, we can’t just be like, oh, we didn’t tell you about that $5,000 Facebook ad campaign.
Ah, shit. At any rate, it’s on your statement, sorry. Like we have to get all that stuff approved ahead of time to spend on their behalf.
For all important things, the artist as the owner of their intellectual property asset and the owner of their business, gets to make the decisions. Now, they’ll lean on us for our advice and most of them follow that advice and we’re we, plan a lot of that stuff, we’ll do profit loss statements on almost everything that comes out so that the artists knows ahead of time okay if we’re going to spend this much, they get to understand in the context of everything that’s going on, how it affects the bottom line.
The more informed our artists can be. Transparency and and proper consultation. But in addition to that 75% minus expenses and advances and things like that, they also keep a hundred percent of what they sell on the road.
They keep a hundred percent of master use licenses. So if they get the song used in a film or TV, we don’t share in that at all on, for performance royalty. In the digital realm sound exchange money, they keep both the artists and the label side, we don’t get any of the sound exchange money.
And when you add up all that ancillary revenue and 75% of the gross minus expenses, then if things work and we do our job well, and the artist is successful, then it can be a very remunerative situation for the artist. And once the artist is successful and they have, money coming in and they have control and we don’t, and also we don’t like, we don’t tell them like, who am I to tell Jason is bull or Lucinda Williams, what they should be doing in the studio that’s preposterous, and we tend to gravitate towards fully formed artists and our baseline assumption is that, The artist is the artist and we trust their creative vision, or we wouldn’t be signing them in the first place, but, the end result of all of the, of the much larger size of the revenues through the distribution channels and all the ancillary revenues it makes it a pretty compelling situation.
Assuming that we have a shared vision about how, to go to market. And even though we’re making, like a 3% net margin hopefully it’s a little more, that’s like the, the lease that we want to do, it’s usually a little higher than that.
[00:14:05] Frank: What about a first release artist? I noticed you’ve got some people with artists development in their job title.
What does that look like for you guys? Taking someone that’s, maybe not totally from scratch kind of thing.
[00:14:16] David: Sure. I, I will give an example of somebody we’re signing this artists named Drayton Farley.
He’s from alabaster Alabama, and he’s a really great singer songwriter. I learned about him through a podcast or friend of mine from West Virginia who he’s found out about a lot of important, pretty important artists before anybody else did.
And I listened to him when he tells me I should pay attention and he brought this guy Drayton to my attention and I w and I, it was listening to his music and I just, I love him, but he he trained him to have, he had no infrastructure around him. He just, the album that he made that’s up on Spotify right now, which is really great and just did on his own and put up there and just got out there.
And he was working at get a job working at a railroad, but just on weekends and everything he’d go and do his thing, but he had no infrastructure around him at all, but we, somebody’s always gotta be the first there. And when I think about artists development, like I think about like with Drayton, because we’re I think a trusted source for a lot of people, we were able to go and introduce him to the person that became his manager eventually, who is a an incredibly good manager who manages like Ryan Bingham, for instance through, through that relationship and also ours, he wound up getting on the radar of CAA, who is booking him now.
So we’re pulling all of these elements together and people, it’s the quality of his work first and foremost, that is driving it, but our advocacy, and sometimes when people like they know that we’re behind it, or if I know that somebody else has, behind it, if they’re like, man, I, like I’m on fire about this.
I think it’s great. I want you to hear it. And then, it’s just, it helps the vision clicked in a little bit like, okay, at least I know that they’ve got a great agent, at least I’d know they’ve got this. And then, when you hear the music and the tumblers starting to fall into place, to me, when I think about artists development, it’s, especially for new acts, that’s the kind of thing that I’m talking about, like building a community around that artist and, sometimes we’re the first to get there sometimes, where the second or third or something around that artist.
But the basic principles, like I’m super confident that dragon Farley’s going to be a big deal. Like I think he’s going to be an artist that is going to be very successful and, as do a lot of other people, it’s, sometimes, when it’s people like that, you’ve just got to go knock on people’s door.
But it is important that a holistic community be around that artists, because, if an artist can’t go out and tour, because they don’t have an agent that is going to be a really tough thing to overcome, concerts are less like church, you’re like, that’s where the intimate, the most intimate connection with your fans are going to take place. And if you can’t get out there, that’s an almost impossible thing to overcoming there’s certain types of music, obviously that don’t depend as much on live touring, but for, somebody in the Americana singer songwriter type vein that’s, it’s essential.
[00:17:07] Frank: Let’s talk about the uncool side of that. It’s 20, 22. Now social media is a thing. Digital marketing is a thing. Pulling the scope away from 30 tigers. And let’s just talk a cohesive release plan if I’m an independent artist.
And I’m like, okay, I’m going to hire a radio promoter. I’m going to hire a publicist. I already have a booking agent we’ll figure out distribution, maybe a label services situation.
Taking it to social media marketing. You mentioned a $5,000 Facebook ad spend earlier.
I’m sure those budgets vary wildly.
[00:17:43] David: I know and believe me, I was thinking about some of our bigger artists when I was thinking about that. Not not our baby acts and believe me, we try to be very thoughtful and frugal about the, artists money. That’s part of our mission to serve the artists. I tell my staff, like we did not make this music. We do not own this music. We are here strictly in a capacity to serve and being good stewards of their financial resources, even if we front them, it’s going to come out of their back end. If we do stupid shit and waste, $5,000 on an ad campaign, that shouldn’t be, that should be $1,000 because that’s what’s appropriate then then we haven’t served, the artists. I think that the thing that I would say to, artists, the thing to keep in mind is, when you’re trying to plan something, is that that’s the same principle that we work on under.
You have to aggregate impressions within a fixed period of time. However, that happens, if it’s hiring, PR person making sure if you’re going to have a release date in August, make sure that you use, have you talked to your PR person, you have identified them and hired them by february or March, because, you guys book out pretty far in advance because, you need to have the proper setup time and all that kind of stuff.
So if you’ve finished your record and you’re just kinda like, I just want it out, and you don’t give the people around you that you’ve brought on ample time to do their jobs properly. It’s not going to go well. I’d say that, there’s a, there’s a rule of thumb in marketing that you know David Ogilvy, was the.
The head of Oklahoma and may the Mather advertising is like the Dean of modern advertising, but he used to make the case that before anybody was aware of what you were conveying to them, it took seven impressions. And you can think about it anecdotally through your own consumption.
The last time there was a movie that you wanted to go see or a book that you wanted to buy, it wasn’t like the first time that you heard about it likely that you were like, oh, I gotta check that out. And that’s the way it is with musicians. That’s the way it is with artists.
And so you have to be methodical. You have to plan ahead. If you’re going to plan a tour to be in your key markets in say that, hypothetical August, tour date if you book yourself, you’ve got to get way out in front of those venues book out pretty far in advance.
And so you’ve got to really think about what you’re doing and have all of the different mediums there that are going to play a role in the seven impressions. And it’s not hard and fast. If something’s really sticky and people are freaking out about it, it may take three or four, but just as a general principle, the idea is aggregating a sufficient number of impressions so that you rise above the din of noise out there.
Because there’s a lot of noise out there. So it’s very tough to break through these days. And so that, that would be, my advice is to not just wing it. Don’t let anybody tell you like, oh, should just run and gun and do this or whatever. You have to, really think about, this and be very methodical. You, if you give yourself six months in advance to give, you guys that opportunity to do what you do and give the booking agent an opportunity to do what they do and plan, all the ways that you’re going to bring enough impressions through whatever mediums are relevant to that type of music.
That makes sense.
[00:20:55] Frank: It does. It does. And I totally agree and appreciate the insight.
I’m looking at my show notes here. We’re down to streaming economy. I know you’re gonna and I’ll probably point to it if you’re going to have a byline in rolling stone. So I guess you could just give us the cliff notes.
[00:21:12] David: I don’t know because Jonathan Bernstein is actually writing it.
How this came about was, I was having spirited discussion this weekend on Twitter for, people that were I felt maybe not looking at the streaming environment through the proper lenses and, and I think people in good faith can disagree, about these things, but it’s something that, and I know that they’re taking it very seriously, but it’s something I take very seriously too.
Through the years I’ve been probably. The, I’ve probably been the, one of the label people, in the country who has been the most they’ve had the most faith in the streaming, cause, remember in 2012, when things came out, everybody was like, Spotify, boo they don’t probably pay they pay whatever, half a cent, a stream, that’s bullshit.
And but I looked at Sweden at the time because, honestly again, like it’s my duty when I’m being of service to my artists to figure out what’s really going on. So there was all this talk about Spotify and, should people do it?
Should they not do it? And miss, the economics seem crazy. And so I decided to do a deep dive and I actually got on the phone. And at this point when Spotify was launching over here Spotify had already scaled to the point where it was responsible for 85% of the music business revenues in Sweden.
At that time, they’re Swedish company, they, they built there first. And so I felt wow, will they become like the dominant way that people consume music in Sweden? So what is the, what has been the end result of, in terms of revenues into the music industry and the music industry grew precipitously during the time that scale that the streaming was scaling. And I thought about it too, because know, I remember one time, I think it was like 2003 or 2004 around them. I went to they used to have a convention called norm that was the national association of record merchandisers.
And it was, basically the record retail convention and they did a massive survey and what they did was they asked all people granted the methodology was probably bot, super, tight, but they would ask people, do you consider yourself an avid music consumer?
And for all the people that self-identified as avid music consumers, what they did was they and it was a pretty large pool of people, but they did a study on okay what are their buying patterns, all this kind of stuff. But one of the questions was how much money. On average, do people who consider themselves avid music consumers spend a year on music and the answer wound up being about $60.
It’s about, five CDs or whatever was on the average. And and I thought about that and I was like, honestly, the number I thought, I thought it might be a little bit higher probably. Cause I’m just looking at my own consumption, how much I spend on music but that was what they came out with.
And then you think about the streaming, mobile first fruits, this subscription model you’re talking about people are spending $10 a month. So then the average consumer is spending $120 a month essentially. And so it makes sense that if somebody is going to go from 60 to 120 as it goes from more of a transactional type of relationship into the streaming relationship, that revenues are going to grow because the gross revenues that are, going into the system are growing. And so it happened in Sweden and that’s what’s happening right now, as Spotify launched here in 2011, but really didn’t kinda get the league going until maybe 20 13, 20 14.
And, in, in 2014 was the year that we hit our absolute rock bottom as an industry, we did less than $7 billion in terms of retail value for the music business down from 14 billion in 1999. So the business basically halved and And so when streaming came along, then all of a sudden we started seeing those revenues go up.
And as of 2020, the RIA hasn’t done that. They haven’t done the numbers for 20, 21 yet, but the numbers for 2020, it was 12.2 billion. So from 2014 to 2020 the business grew 75%. And that’s huge. And it’s a bigger pool of money for, for potentially everybody. Now, the rub is that with the advent of, digital delivery, things like tune core where , nobody would ever want to hear an album of me singing, but suppose I got a wild hair up my ass and decided that I wanted to do it.
I could make a record, here in my in my office. Loaded up to tune core and it would be in the market now. It wouldn’t do very well, but, you got my point the barrier to access to get, to be, on those platforms is radically different than it was back in 2004, for instance, where you had to get signed to a label in order to have records made, get them into stores, promoting them, through radio or whatever, but like you had to sign a label deal, or you were pretty much dead in the water.
I think the only exception that was John Prine and Anita Franco, they started their own labels, but even then, they had, relationships with prominent distributors and everything but it restricted the access and it also forced artists to do deals where they were basically beholden to the labels.
They didn’t have any other options. And it was just a matter of who is it that I’m going to get? That’s going to fuck me the least, again, like I don’t fault the label, the major label, deal is everybody, as long as everybody knows what the deal is going in.
And it artists like, even though, certain artists may not make quite as much on their recordings if they’re in a traditional field, but if it allows them to tour and make revenue or the songs that they write get on the radio. So they’re able to earn, publishing income. Not everything is, needs to be thought of strictly in terms of how much value are you going to ring out of your, your recordings.
But the democratization that happened through tune core and through Spotify. And frankly, I think even within the last couple of years, Spotify, this is a real sort of double-edged sword, because Spotify and I’ve, I’m saying Spotify, just because they’re the hot, this applies to all DSPs, but, but it’s democratized to the point where I think last year, Spotify in there, whatever, their town hall thing talked about the fact that they have 60,000 songs a day that get uploaded.
So go back to, again, back and go back to, 2004 ish, when, it was going to those NAR meetings. They, at that time, there were about 50,000 albums coming out a year. So if you do the math and let’s just say that, just in terms of just like the business equivalent, that 60,000 songs a day equates to about, from an economic standpoint, it’s the equivalent of 6,000 albums being released every day. And that if you extrapolate that out to 365 days a year, you’re talking about at that point over 2 million albums worth of material, that’s being uploaded now. That number is also a worldwide number in the U S is about 50% of the global, market.
And so maybe it’s more like 1 million albums, but you’re still talking about 1 million albums worth of material relevant to the U S market versus 50,000 titles that, in 2004 and the amount of money that was made in 2004 and the amount of money that was made in 2020 are almost exactly the same as about $12.2 billion in revenue.
So what is happening is that the pie is getting cut so thin today for artists that that they to extend the analogy. They’re getting such a small piece of the pie that they leave the table hungry, and it’s really hard to earn a living and I have an immense sympathy for that.
But is it, is it worth, so if you dismantle the, the streaming platforms and there’s people that, there’s varying degrees of how people want to remedy the system, but if you take a look at the system again, you’ve had a huge increase in revenues over the last six years because of streaming.
You’ve had immense democratization in terms of people being able to, to have access. I looked at the new boots playlist on Spotify and I looked at the labels for all of those artists and 20 of the artists.
The copyright information was just their name. It was just them putting it up. But new boots has 800,000, listeners that, that listen to that it’s a very big, popular thing. And 20 acts who are just like people that are just doing their own thing. There’s no label affiliation, I think these are just people uploading their music and Spotify and it’s good music and Spotify is picking it, which is like very democratic, and so what concerns me is that in the frustration of not getting enough pie and not earning a living.
That they miss diagnose the problem and that they are taking something that gives, a multitude of artists, at least a shot to scale to get in there and to scale, and I think about a country artist that we work with named Russell Dickerson before we ever signed him.
And we signed them to the, we also have a joint venture label that we’re a part of in the commercial country, they in Russell’s very much commercial country artists, he, in addition to his music being great, he also had 25 million streams on Spotify before we were ever on the scene, and so he basically delivered proof of concept, he was able to get on those playlist and the music performed there. We had a pretty good idea that like the ship might work and it, if it were 2004, he would have never had a chance. It would have had to come through a gatekeeper.
There’s a finite number of things are only so many artists that got signed, but nobody could tell Russell no, and he and his team, who’s got a great management team. He and his team got out there and hustled and worked and built something that, eventually they decided that the deal that we offered them was the thing to do.
When he’s had four number one hits. Now he’s making money as a publisher. He’s out touring, like he’s got a career. He’s doing it. He’s very, successful. And believe me, that, that doesn’t happen all the time, but the thing is you have a chance.
Nobody could tell them no, and they got after then. And we all know like a bunch of artists that. Started out chance, the rapper through SoundCloud, like basically nobody was in a position to tell him no, or his team know. And they went and built one of the most successful careers that they are, if it weren’t for the streaming ecosystem and especially the, through tune core and, the DSPs and the, and their support and Spotify is not the only one that supports is that apple does a great job title, does a great job.
Like they all, do their part and it, it just feels like the more that we chip away at that ecosystem without really an idea about how we’re going to replace it, all they know is that they’re hungry. All they know is they can’t make a living and that’s a serious issue. But what I would counsel, artists to do is get into the weeds and understand the dynamic and put this way.
I have a pretty, I’ve thought a lot about it. I could be wrong. I don’t know. I don’t think I am, I’m not immune to, to people challenging my notions about it, but I feel like so much of the conversation just stops it. I can’t make a limit or, artists can’t make a living.
And artists deserve to make a living. Therefore, they’re just not getting paid enough. And I’ll be honest, like one of the things about the Joe Rogan, you’ve seen it, I’ve seen it. They’re like $100 million and that could be going to artists. And it’s not, not really. They’re trying to build a separate business vertical and they’ve made an investment and it may turn out to be a bad one .
Because they’re losing a lot of customers right now. But things are always more complex and nuanced than people want to give it credit for. And I feel like a lot of the discussion begins and ends of artists don’t make them on money and it’s just the easiest thing in the world to just be like, and it’s because of corruption or it’s because of, evil, corporatism, and all this.
And I’m just like it’s like the pie is growing. And you’ve got to figure out if you want to do this. The money is there. You just have to like, be able to organize. And also the truth is, is that, not, everyone’s going to make it through.
Just because you’re an artist doesn’t mean that it’s gonna work, and, and there seems to be this sense of almost I think about my business, for instance there were many times in the first specially, the first eight years where I was like, I don’t know if this shit’s working.
Like literally did not make a cent of profit in eight years. And we, it was just this, the stress of just making sure that we were bringing enough, enough revenue to be able to keep everybody employed, to move forward. It was surviving.
That’s what I can say about it. And then in about year nine, shit started to be like, oh, and I think a lot of that had to do with. Industry catching up, but have I failed, it’s like nobody was going to subsidize that, and and that’s just, unfortunately that’s just the harsh reality of it.
And I feel like the more, what I want artists to do is to like, really dig in and learn what the fuck is going on with the money where the pennies, where the micro payments going, how does all this work and be open to, hearing nuanced arguments like Spotify is not actually the devil, there’s some things that they do that I don’t care for.
Right now, the they’re stiff arming the publishing community on, paying a percentage that was mandated by the copyright royalty board that they and the other DSPs I’ve had under appeal for, for three years, the fact that, songwriters are getting, basically two thirds of what they should be getting through those platforms, because it’s been under appeal during a pandemic no less.
That does not sit well with me. I definitely don’t feel like I’m an an utter apologist for Spotify. I can see, you know what, but, if artists are going to make it through, if you don’t actually know the battle you’re fighting, if you don’t understand the terrain that you’re dealing with, both the pros and cons and really dig in and become an app student then you’re, it’s, it’s it’s hard to win a war if you don’t even know what battle you’re fighting, and I feel like the battle that a lot of people are fighting out there is, Evil corporatism and they’re fucking they’re artists. And it’s just that just hasn’t been my experience.
One thing I do want to say too about the rates is, and this is, and again, this is a disagreement people can have in good faith, but I feel like it’s coming on par people, because I see this shit on. Social media all the time about, we’ll, apple pays this and title pays this and Spotify five pays this.
Spotify does pay in fact less than apple and title, but there’s a, how valid of a reason you think it is? It’s up to you, but I think it’s a valid reason.
They offer a free ad supported tier for for listeners who are, not able to pay the $10 a month or choose not to. The ad supported side brings in a lot less revenue than the subscription side does.
So it has the, so they’re paying in the same percentages as the other DSPs, Spotify, actually indie retail, Spotify, apple, and title are all between 60 and 70% of all the revenues, to the recording community. The difference between Spotify and apple and title is that Spotify brings in less revenue to split up per consumer because of the things that they do, they offer a $5, a subscription fee to college students.
They offer the ad supported thing so that lower income music fans can at least be participating in the economy. And you can make the argument that you know what, I would rather the lower income people, not having an outlet, we shouldn’t be subsidizing paying for that.
I feel like I’d rather than be participants in the music economy and, when, their situation improves, I’m sure they don’t love sitting through ads when their situation proves they’re likely going to be subscription, customers but in the meantime, they’re streaming music.
And again, like I can see, good faith arguments being made in both ways, but nobody ever talks about why Spotify charges less. And there’s a, as a valid reason, they made a decision, as a company to offer that where the others decided that they didn’t want to, again, valid choice, but but it’s always painted as like those evil motherfuckers they’re lining their pockets.
They’re doing it. It’s no. That’s not the case. Spotify is actually losing money maybe even because of Joe Rogan. I don’t know. But it’s just not as easy as that, and again, like if artists are going to win, they need to understand the war that they’re fighting and, just, I, and it’s just, to just, get on social media and just it’s just easy to get a bunch of likes if you’re like, booze, Spotify, BU corporate America or whatever.
And it’s just man, like it’s just more complicated than that. And, and again I’m open to, when I make the case, I’m open to people telling me why I’m wrong. I have things to learn all the time. I could not be seeing this a hundred percent accurately, but when I asked people, okay explain to me why a streaming is bad for an ecosystem.
Why in country, after country when they moved to a streaming model, why do revenues soar? And I’ve yet to have one person tell me w basically answer that question within, even like the universe of like satisfaction, and it’s you’ve got to answer that question.
If you are going to make a critique on the streaming environment.
[00:38:13] Frank: I wish I could even offer a counterpoint, but I’m pretty much. I am with you a hundred percent there. They may not be the answer most people want to hear. And I think that’s why you get the pitchforks.
[00:38:24] David: Oh I’m definitely going to get the shit kicked out of me.
I’m going to undoubtedly have some people coming after me, look I love the dialogue and sometimes I get a little feisty or whatever, like we’re all trying to figure this out together.
And I think that the presupposition that basically like the industry is there to fuck you labels, Spotify, everybody’s there to fuck you and, and artists. It’s just grist for our collective mill. It’s man, like if you fuck people over, like you’re gonna, you’re not gonna do business with people after awhile.
Almost all the shitbags that I know in the business have found their way out because you know what, after a while people don’t trust you, people don’t like you. And this just distrust of the industry, like I said, I know tons of people in this industry and the vast majority of them are really good people who really want everyone to win and, I hate thinking that artists who are trying to get going, are, buying into the idea that like, everyone’s trying to fuck them over. And, it’s just they’re just, they’re going to be scared to, access certain things that could help them have a career, and that’s what, I just don’t want people to cut themselves off from that. And again, I’m open to critiques about why I’m wrong and I’m certain that I’ll get them.
[00:39:35] Frank: Yeah, no doubt. I’ll all good insight here, David. Thank you for taking the time to speak with me.
[00:39:41] David: Thanks again for having me and hope to see you around sometime soon.
[00:39:44] Frank: Absolutely, man.
