The music industry has taken a 180 degree turn in recent years due to the massive use of social networks and digital platforms. This has facilitated the consumption of music in its various forms and has also made it more accessible. However, how does this affect the sector? According to laywer Don Franzen, an entertainment and music specialist both in the United States and in Europe “in 2017, the music industry made more than it did in 2016, thanks to ‘streaming’”.
He made this statement at a round table organised as part of the University Master’s Degree in Cultural Management held at the Faculty of Humanities on 15 March. Víctor García, artistic programmer for the Palau de la Música, and Legal Aspects lecturers from the Master’s Degree, Cristina Calvet and Carlos Rivadulla also participated in the round table.
Don Franzen, also a professor at Berklee School of Music, analysed the impact of this new type of digital consumption of music, and said that streaming platforms such as Spotify have led to the sector recovering in comparison to numbers seen in previous years. And what is the impact this has on the industry? According to the lawyer “Spotify pays 60% of the income generated by record labels”. Out of this 60% received by companies, he explained that artists receive between 10 and 20%.
Therefore, musicians end up receiving a small part of the income generated due to the types of contracts that tend to be signed in the sector. Therefore, in the same way as happens with Spotify, by selling a record, a singer can earn between 10% and 20% of the total. At the beginning this same income is used to cover the production costs that the record label took on initially. When this has been returned “the artist begins to make money”, he explained.
Franzen also said that managers earn between 15% and 20% of what the artist generates while agents - whose position in the sector is regulated - earn 10%. He also mentioned that “artists currently earn more as songwriters”.
The regular requests that a lawyer like Franzen receives usually include “requests for help with contracts, concerts and merchandising”. Sometimes people ask about tax-related issues. “My job is to help the artist and the manager make legal decisions related to their career” the specialist concluded.
As an anecdote, Don Franzen, who is also co-founder of the Los Angeles Opera, mentioned that the concert that made the most money in the United States wasn’t one by Beyoncé, Madonna or Lady Gaga. He said in fact it was a concert given by the Three Tenors in Detroit in 1999: more than 20 million dollars.
