Music and Money: Exceptions and Empties and ‘The Internet’s Half-Million Dollar Man’

An NPR blog calls Jonathan Coulton “The Internet’s Half-Million Dollar Man”, and for good reason. Jonathan, a Yale-graduated software designer whose music is described as “nerd-folk”, and whose song “Code Monkey” got some run from the Slashdot discussion board back in 2006, took in over $500,000 in 2010, mostly by him selling his unique songs directly from his website.

Granted, half a million bucks isn’t that much money, but consider this statistic: For every $1000 in music sold, the average musician makes $23.40. If Jonathan Coulton were on a major label, instead of getting the half million dollars from sales of his recordings, he would be getting only $11,700, assuming he were part of a 4-member band, which is what this average was, to that extent, based on. And if you counted just him, multiply that by 4, and it would be $46,800. Whatever the amount, chances are it would get eaten up by recoupable expenses.

By doing it himself, and keeping overhead costs low,  Jonathan was able to keep most of that half million he took in. All in all, not bad for a guy who challenged himself in 2005 and ’06 with “Thing a Week”, in which Jonathan recorded a song every week for a 52-week stretch.

Despite the thinking of some that Jonathan is an “exception” to the old ways of breaking a musical act, if he can develop his own market for his own musical material, then anyone can.

There are other “exceptions” out there, including….oh, Ani DiFranco, Radiohead, The Donnas, OK Go, and any act that has been through the major-label wringer but either had bad sales, a bad contract that wasn’t to their advantage, or both, and has chosen to declare their independence, bringing their built-in fan bases with them in the process.

And there are also cases of acts who sold millions of albums, yet had nothing to show for it. Girl group TLC’s 1994 album Crazysexycool sold more than 10 million copies, yet by 1995, they ended up $3.5 million in the hole and had to declare bankruptcy.

There’s also veteran country singer Lyle Lovett, who was reported in 2008 to have sold 4,600,000 albums going back to 1991, and more going back to his debut in 1985, yet admits to having “never made a dime” from such sales.

Let’s also not forget the band 30 Seconds to Mars, whose lead singer, actor Jared Leto, responded to a $30 million breach of contract suit [for underdelivery of recordings] filed against them by EMI in 2008 by saying that after we had sold millions of records around the world, “where not only were we never paid a single penny, but we learned that we were millions of dollars in debt.”

Jared’s band did settle things with EMI, though he didn’t say whether their debts were wiped clean. To Jared, it wasn’t about the money, yet cases like these are why it’s best for anyone who thinks that being signed to a major label “rocks” to think twice about it.

While being talented and having a dedicated fanbase matter, it also cannot be stressed enough that staying independent and being original, combined with a strong business sense that comes from owning the publishing rights and master recordings, should matter just as much to any recording artist.

Do you think any act that sells millions of albums and gets little to no money in return should stay signed to a major label?