Analysis Californian technology utopian Kevin Kelly says we don't need a music business. Artists can cut record labels, collection societies and distributors out of the loop, he reckons - they only need "One Thousand True Fans”. Economist Will Page picks through Kevin’s rule-of-thumb argument - and finds the math doesn't add up.
According to Kevin Kelly, an artist needs "only 1,000 true fans to make a living”, and it's got all the blogs abuzz. But when you're talking about a creative business like music, a rule of thumb formula can’t be applied; and that's something Kelly has overlooked.
For starters, you need to ask where does an artist need to ‘make a living’, exactly? The cost of living varies across cities and countries considerably. Take New York for example, where many artists need to perform in Manhattan to make a living, but can actually only afford to live further down in Brooklyn, or further away in Philly – and travel in each night to perform. From there, a little economics can kick in: how many more ‘true fans’ would be needed to live in Manhattan, and would basing yourself there lead to more performances, artistic satisfaction and revenues as a result?
Kelly then highlights Google, YouTube and eBay as new means by which an artist can create a sustainable living from these 1,000 true fans. But, with the exception of YouTube which has been licensed by the MCPS-PRS Alliance here in the UK, I’m not aware of royalties flowing from any of these entities back to the creator of the works. Moreover, when Kelly points to the benefits of the "eBay page where your out-of-print editions show up", he's forgotten that, as with Amazon, second hand online sales only generate revenue for the willing seller and the platform; again, nothing necessarily goes back to the creator.
Not-so-Modest Expenses in Creating or Collection
In terms of the math, Kelly calculates that at $100 of consumer disposable expenditure each, and with 1,000 fans, you get $100,000 per year, which, minus some "modest" expenses, is a living for most folks. I’ve already pointed out the relative aspect (so his generalization will be distorted by the region to which it is applied) but what about these modest expenses? Indeed, what about the initial investment needed, presumably by the solo artist, and how would that be recouped?
Similarly, the "current" popularity status of the artist and the "crowded" state of their chosen genre are going to be two more important variables, which erode the relevance of Kelly's theory further. Even when you see successful examples of songwriters and performers "going it alone", there are significant upfront costs and risks associated with doing so. Radiohead might have broken free from their record label, but they did employ a large management team, many of whom were experts in their field. Are these captured in his "modest expenses" - or does he like to keep them off his balance sheet?
So, if the 'new' economics of creating recorded music is not going to be the 'free lunch' which utopians would have us believe, the cost of collection of that assumed $100,000 revenue poses even more questions. Namely, what’s the "net"?