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Old 01-30-2012, 07:49 AM   #1
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The music industry

with the recent hubbub of services like $$$$$$$$$$ getting taken down and protests against sopa/acta/etc i thought this may be an interesting topic; so i was checking out theverge.com just now

and they've got a long article/opinion piece about the music industry and the debate over subscription music services such as Spotify its not free music as theres a fee its very much like radio

some prominent artists seem to hate the idea of it and have had their music removed, such as Adele, Black Keys, Cold Play

here's the article Debate rages as Spotify, MOG, and Rdio kill / save the music industry | The Verge

here's it quoted (spoilered most of it to save space)

Quote:

For the conscience-laden music consumer, streaming music services present an interesting quandary. By separating the concept of "legal access to music" from the age-old paradigm of "paying the artist for an entire song or album," they've presented us with a whole new set of ethical dilemmas to worry about. Instead of buying your music, you pay a subscription fee that is in some way filtered down from Spotify to record label to artist, based on some opaque algorithm of pay-per-play, which is based on some opaque deal struck between the label and Spotify, and then the label's opaque individual contract with each of its artists.

I suppose what I really want is some sort of "free range" sticker slapped on my music consumption, so that I know the artist was ethically treated in this transaction. Unfortunately, the current state of the industry is rife with finger-pointing, and I have no idea who devours — and who's getting screwed out of — the $9.99 I drop into this darkened pool every month.

What I do know for a fact is that some artists aren't happy with streaming services. Notable pullouts include Coldplay, Adele, and the Black Keys (each of whom have removed their most recent albums from one or all of the services), while many artists and catalogs have never been available at all.

The telling quote to me is from the Black Keys interview where they explained their decision to pull their new album, El Camino, from streaming. "I always pay for music," says Patrick Karney, the drummer and apparent spokesman for the band, as if to say that paying for a streaming service is different than paying an artist for music.

He goes on to say that "there's a lot of stuff about some of these services that a lot of people don't really know," and that deals are "more fair" for labels than artists. This lack of knowledge is a big hangup for a lot of the parties involved, and before we can all embrace the beautiful future that streaming services provide, it might be nice if somebody could clarify who exactly these deals are "more fair" for.

I spoke with the CEOs of Rdio and MOG about this, and neither could shed much light on these mysterious deals. Their agreements with labels are mostly confidential, and the payout contracts labels have with artists differ artist-to-artist. One problem is that song royalties aren't the only money that's changing hands — services pay for exclusivity, and labels cut deals to get their artists more heavily promoted by a service, and those upfront costs and windfalls may or may not be passed along to artists.

Still, the general consensus from everybody I talked to is that a "larger revenue pie" in music can only be a good thing, as long as it's distributed well. "The average iTunes consumer spends $40 a year," says MOG CEO David Hyman, "of which the labels are getting about 60-70%." In comparison, labels get 65% or so of MOG's income, which is $10 a month for a premium subscription (though $5 subscriptions and a free service are also available).

"The average American spends only $17 a year on music"

"I have my own black hole in knowledge when it comes to individual deals between artists and labels," admits David, "but I do know that the content owners, the labels and the publishers, are getting a lot more money out of these subscription services than they're getting from iTunes."

Things look even better for streaming services when you consider that the average American spends only $17 a year on music, a number cited to me by an indie label executive who wished to remain anonymous. "If you get more folks spending $17 a month on music," he says, "there's a bigger pot of money to split up and it lets us use the power of our own marketing rather than gatekeepers to develop fans and convert that most precious commodity — attention — into revenue, however that consumer might choose to engage."

Spoiler!

in my opinion (which seems to be an issue lately )

Im surprised these "artists" dont call for a ban of their music from Radio waves then.... or from being sung in karaoke bars

I don't believe music should cost anything, it is as natural as the elements to me; i dont recall hearing about prominent artists in the classical era or even our grandparents era suing other musicians from replaying/mimicking their songs

music, to me, is something that should be shared with the world so as to enrich societies lives

the only time that you should be charging for it, if you must, is when performing for an audience (concerts)

But if an artist feels that their music is deserving of a price tag then so be it, but no ones going to want to buy the song if they've never heard it at all and here in lies the need; the demand; the wiggle room for services such as Spotify to exist, no one listens to the radio really anymore, heck people don't even watch music videos on tv anymore.

So artists, imo, should be fully supporting services such as these if their desire is that people will hear and want to purchase their music and as with traditional radio artists will be getting some royalties so its not like the music is being given out for free

the music industry was already slow to react to changing times/technologies when it came to embracing MP3s/digital media is subscription services such as spotify a repeat?
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Old 01-30-2012, 07:56 AM   #2
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i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.

I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
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Old 01-30-2012, 08:30 AM   #3
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ive been downloading music for years now, buying tracks here and there off itunes. what i like about it is i dont need to buy a whole cd when there are only 2 good songs on the whole album. i rather pay for the 2 good songs, than spend the 15-20 bucks to buy a whole cd.
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Old 01-30-2012, 08:31 AM   #4
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I'm going to preface everything I say here by saying I don't know jack about the music industry(or music really for that matter).

I get why people are pissed.

First, whenever I see "the plan" for the music industry presented by those outside the industry as being music is free, and you make money on live performances, that would piss me off.

I used to create an album. Then I'd go on tour to promote it. I'd make some from the tour and see most on the backend through sales. Now you are telling me that I need to work for my supper. Tours would be hell! I've got a great house! But I never see it. Bought a new car! Never drive it.

I see why people all have opinions. Music lovers were abused in the system before Napster. The one story that always sticks out is that of Nine Inch Nails asking why their album was priced higher than Britney Spears. They were told that they have a loyal fan base that will pay more for their product. Nice! I actually go out of my way to listen to you, and get gouged to do so.

What I don't get is how the artists continue to go for the old system. Distribution is highly irrelevant now. There has to be enough artists with enough money to start a direct supply model. I know many start their own labels, but they all distribute through the same old companies.

The only reason I can think of, is they are still stuck sucking the teat of the same old companies and are going to have a problem going into direct competition with their cash cow.

So it needs to be outside money. Apple took it on, but they only replaced the pressing of cd's. A little promotion within their system, but are still fed by the same old companies.

The companies, through the RIAA and MPAA all want to go back to a system that puts them right back in the middle of a system that for the most part doesn't need them anymore.

But that brings me back to my original point. Everyone looks to live performances as a carrot to dangle in front of people.

"Yeah, we stole your shit. Oops. You sued us, it didn't work. iTunes kinda converted a few people back to paying, but now your 'cd pressing' company gets a cut per track. But hey! You can still sing and dance for me live!"

What if, just what if, I developed a way to pirate a live performance? Sneak 30,000 people into an arena. Eventually people are going to call for live performances to be free too, right? I mean, I already sneak into Black Eyed Peas for free, so it should be everybody.

Dangling live performances as that carrot is like a concession prize for people, after you went through and ransacked the store.

I fully believe that they need to adapt to the new system. As I said, suing didn't work. Going after website after website is like fighting weeds. They still come. But asking these companies to adapt to a system where the customer calls the shots and dictates what you can charge them for isn't the best answer.
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Old 01-30-2012, 08:39 AM   #5
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Quote:
Originally Posted by StylinRed View Post
Im surprised these "artists" dont call for a ban of their music from Radio waves then.... or from being sung in karaoke bars
The royalty calculation must be sufficient from radio, TV, and establishments if they are not challenging it.

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Originally Posted by StylinRed View Post
I don't believe music should cost anything, it is as natural as the elements to me; i dont recall hearing about prominent artists in the classical era or even our grandparents era suing other musicians from replaying/mimicking their songs
There was no internet then, duh.

When the cassette was first introduced as a viable means for the average Joe to copy music, these same debates were had. The industry introduced a levy to recoup forecasted loses due to piracy.

What year was the cassette introduced? It might help you understand why your grandparents had no issues.

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music, to me, is something that should be shared with the world so as to enrich societies lives

the only time that you should be charging for it, if you must, is when performing for an audience (concerts)
When even then? Why not make it like a giant open mic night?

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Originally Posted by StylinRed View Post
no one listens to the radio really anymore
No true. Radio has expanded online, I can listen to my favourite station streaming. Furthermore, you don't see artist backlash against radio streaming online - so why only against pure online streaming companies. Again, it comes down to royalty calculation.
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Old 01-30-2012, 08:41 AM   #6
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When music cd's were in, artists would get pennies on each sold. Nowdays they don't have that, but with elaborate show displays and PR, they are making insane money off touring, appearances, sponsorships, features, movies etc.

Nowdays an artist could be a CEO of a record label, their own producer, a manager of other artists, and have a clothing line, while headlining a massive tour...and they don't even need to be very well known outside of their region

if artists are gonna tell me tehy're making less now than before, i call bullshit. instead of thinking of free music as a long term PR and brand building strategy reaching more people, tehy're thinking short term and being greedy. A businessman not willing to invest in the growth of their brand is an idiot.

we've seen artists like wiz kalifa, soulja boy, and others all get local fame from local buzz, and then seen them utilize myspace and internet-distributed mixtapes, to get a bigger buzz, radio play and eventually global fame. So WTF is all this bs?
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Old 01-30-2012, 08:48 AM   #7
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From what I gather it's more the record labels who are lobbying to have these sites shut down and are losing money from them, not the artists themselves.

As mentioned, artists are making as much, if not more money from these new media compared to the pennies they got from record labels, and seemingly few of them are outspoken against piracy and new media.
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Old 01-30-2012, 11:02 AM   #8
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i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.

I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
^^ truth brother

oh yea and fuck dubstep/electronic music. its annoying and reptitive
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Old 01-30-2012, 11:09 AM   #9
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The reason they don't complain about radio is you can't pick your own songs to listen to on the radio. Oh sure, if you go to the streaming version of the station you can go back and pick previous songs to listen to, but who would bother with that when you can go to Spotify and create your own custom playlist and leave out all the songs you don't want to listen to?

I have a hard stance against copying/piracy, but of the things that can be copied (music, software, movies/TV) I have the least sympathy for music being copied. I did a calcuation awhile back and it seems relevant to bring it up again.

If game companies and movie companies used the same distribution methods and markups as the record labels, then a typical top-rated game would sell for $700 and a top grossing movie would sell for around $3,500. This is how crooked the music industry is.
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Old 01-30-2012, 11:37 AM   #10
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The reason they don't complain about radio is you can't pick your own songs to listen to on the radio. Oh sure, if you go to the streaming version of the station you can go back and pick previous songs to listen to, but who would bother with that when you can go to Spotify and create your own custom playlist and leave out all the songs you don't want to listen to?

I have a hard stance against copying/piracy, but of the things that can be copied (music, software, movies/TV) I have the least sympathy for music being copied. I did a calcuation awhile back and it seems relevant to bring it up again.

If game companies and movie companies used the same distribution methods and markups as the record labels, then a typical top-rated game would sell for $700 and a top grossing movie would sell for around $3,500. This is how crooked the music industry is.
Can't even compare the models though. Movies make their money on theatre showings. DVD sales/PPV and airing rights on TV are the icing on the cake. If you don't make money on first run, then you aren't going to make a fortune on the icing either.

Movies and Hollywood also fall under 'Hollywood Accounting' which just brings up a whole new host of issues affecting an industry about how a profitable movie can be made to have a loss.
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Old 01-30-2012, 12:15 PM   #11
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Probably has nothing to do with it, but after MU got shut down, I bought a few digital albums from underground artists that I was on the edge about. These are the people that deserve my money.

Don't music artists make the majority of their money off live shows anyways? People like Wiz Khalifa started out giving their music out for free in the form of mixtapes and in turn got a "cult" following that attended their shows.
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Old 01-30-2012, 12:59 PM   #12
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Can't even compare the models though. Movies make their money on theatre showings. DVD sales/PPV and airing rights on TV are the icing on the cake. If you don't make money on first run, then you aren't going to make a fortune on the icing either.

Movies and Hollywood also fall under 'Hollywood Accounting' which just brings up a whole new host of issues affecting an industry about how a profitable movie can be made to have a loss.
I'm not talking about where they make their money. I'm talking about how much money it costs to develop the initial product. A movie, for example, can cost $100 million to make, can employ hundreds of people and require well over a year by the time it's shot through to final post production.

Same thing with making a video game, which could easily employ one hundred designers, artists and programmers for many months or even years before it's finished.

A hit record can be cranked out in two weeks. Before music editing software, you could spend a lot of time in the studio doing take after take until you got it right. You could also spend a huge amount of time setting things up physically (instruments, performers, mics) in just the right locations to get the sound you wanted. Nowadays, you can do a couple takes and "fix" everything in software later on. How many records require 100,000 hours of rendering time on a server farm of 1,000 PC's?
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Old 01-30-2012, 01:12 PM   #13
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^but ur assuming that net cost is what determines price, which is not true, as it is the type of good and what people are willing to pay for it.

People are also willing to pay close to $100 for a Microsoft Office Product, while no more than a dollar per pound for an apple at a supermarket. They are willing to spend a hundred thousand dollars on a rolex. Once again, the costs don't matter, but rather the type of good and people's price point based on consumer research.


People are willing to pay $12 for a CD and around the same price as a movie. The margins are much better for the cd, yes, but that's irrelevant. It's not about cost to produce, but rather, what people would pay for it. Of course in the long run movies make far more money than CDs, whether it be through syndication, various channels and packaging they're sold in, netflix etc. But that's a different argument altogether.

Note: I personally don't buy music or movies, nor do i buy software hahaha i'm just referring to the typical business modesl and pricing schemes and their basis
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Old 01-30-2012, 02:12 PM   #14
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^ Of course most products are priced according to what the market will bear. However, the recording industry takes this to a whole new level since they have a lock on distribution, and use their position to massively overcharge for their product. This is why the RIAA has been fighting so hard against piracy - they see their gravy train of enormous profits going away and are fighting to keep them.

Considering the huge number of illegal downloads of music, and the enormous success of iTunes and the $0.99 price per song model, I'd have to disagree and say most people are not willing to pay $12 for a CD.
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Old 01-30-2012, 05:54 PM   #15
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Quote:
Originally Posted by EmperorIS View Post
i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.

I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
i still don't understand why people have to bash rap music so bad. there are plenty of other genres that have it just as bad..
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Old 01-30-2012, 07:43 PM   #16
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i still don't understand why people have to bash rap music so bad. there are plenty of other genres that have it just as bad..
Because what he said was true?

I'll also add: "Yo. I'm the best there is. Yo. I spit rhymes better everybody in the biz. Yo."
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Old 01-30-2012, 08:14 PM   #17
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Most Rap sucks. I will say, there are some diamonds in that rough. Too bad its more like needles in haystacks the size of Mt. Kilimanjaro.

Hip Hop is a completely different animal. But you have to be real Hip Hop to qualify. True lyricists. With a message. Whatever that message may be. Nothing wrong some good Hip Hop IMO.
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Old 01-30-2012, 10:06 PM   #18
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The royalty calculation must be sufficient from radio, TV, and establishments if they are not challenging it.

...

No true. Radio has expanded online, I can listen to my favourite station streaming. Furthermore, you don't see artist backlash against radio streaming online - so why only against pure online streaming companies. Again, it comes down to royalty calculation.
There have been standardized rates approved by the RIAA and the Copyright Royalty Board for internet radio that has slowly risen over there years its something like $0.002 each time a song is played now

but the thing with streaming sites like spotify, as noted in the article, they are paying royalties too to the studios

but i agree these guys likely just want More $$ but is it deserved? is it needed? shouldn't the exposure counter their concerns?


Quote:
There was no internet then, duh.
that isn't really a fair comment to make because in the eyes of people back then radio/concert/recods (LP) were their internet

and there was people performing/singing the songs and making their own records without royalty fees even in our grandparents era there was some anger over "copying" their songs not due to royalties it seems but rather racial equality issues

it just wasn't a big concern for them imo everyone was still making money and still getting exposure
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Old 01-31-2012, 04:22 PM   #19
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Alright I tried to bite my tongue. Here we go.

A lot of valid points in here. Working in the industry, I'll try and clear a few things up.

Personally, I only (and am willing to) pay for music from Canadian artists, and upcoming independent artists. One track you buy from an independent artist is worth/means way more than buying all of Lil Wayne's CD's. The big names don't need any more of our money.

Record sales from the big record companies/labels are pretty redundant now. ALL the money goes to the label. An artist makes more selling a t-shirt than a CD. However, with independent artists, record sales is usually their only form of income.

Other than the A-listers getting royalties and endorsements left and right, musicians make most of their money from live performances (touring) and producing other artists.

Radio play is more of an exposure tool than a form of revenue. Like someone said above, with internet radio, you barely get a fraction of a penny. With commercial radio, you make $0.15-$1 every play, depending on the station.

On the other hand, when artists license their music to film/TV and video games, that's when they make some pretty paycheques.

The reasons why the artists don't even bother fighting these things is that it doesn't matter to them. They're still getting exposure, and it's not their money that they're losing. They just got a million dollar paycheque from their tour; they're not gonna bother fighting to get their $2 cut from CD sales.

Either way, I suspect record labels are going to be gone in the future. With Youtube being the top vehicle of exposure (not to mention viral capabilities and their advertisement payouts), it's pretty much useless now to sign with independent labels. All the giants will still be around, but unless an indie label has some crazy hookups in film/TV, they're pretty much chasing their tails. For example, unsigned Youtube stars like David Choi and Christina Grimmie are far, far ahead of signed artists like Hedley, Marianas Trench, and Faber Drive. The latter 3 are signed, touring, and producing, but I would bet dollars to donuts that the Youtube stars have a bigger following, more income, and more freedom than the signed artists. Everything the Youtube stars make, they keep. Anything they promote off Youtube and sell, they keep. They cross out the middleman of a record label, and are far better off.

The whole "signing a record deal" is all a big illusion at this day and age. Of course it does have its perks.. being on TV, being sold in (dying) CD stores, meeting celebrities, and most of all, it's a fast track. The label will take care of all your videos, sales, marketing, tours, whatever. But that comes with a price.
Indie artists have to do all their own work, book their own tours, find their own funding, and so on.

In a few years, the whole industry is going to be made up of Youtube and a handful of the big shot labels.

Everything else will be pennies in a goldmine.
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Old 01-31-2012, 04:34 PM   #20
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I'll also add: "Yo. I'm the best there is. Yo. I spit rhymes better everybody in the biz. Yo."
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Most Rap sucks. I will say, there are some diamonds in that rough. Too bad its more like needles in haystacks the size of Mt. Kilimanjaro.
Rap is always a bit of a touchy subject. I'll go ahead and say I listen to all music, including rap.
And yes, most rap these days is about money, sex, and cars. But that's what sells.

There will never be another Tupac. There are the few artists like Lupe Fiasco who raps about real things, but the majority is going to fall into the "brag" category of rap.

Honestly it doesn't take much to be a rapper these days. You have a catchy beat that you buy online for a dollar or make on Garageband, you write a sheet of rhymes, play around with syllables for a proper flow, have a singer sing a melodic chorus, and there's another mediocre rap song. This genre is all about attitude and brag now.

With other genres, much more knowledge, emotion, and talent is needed to write and perform a real song. Song structure, keys, change-ups, melodies, harmonies, not to mention a strong vocal if they're a singer as well.
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Last edited by PJ; 01-31-2012 at 04:42 PM.
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Old 01-31-2012, 11:32 PM   #21
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I agree you with stylin. "Selling music for mass consumption" is a very new thing. i mean, back in the victorian days the only way you could listen to beethoven was by going to his concerts. Now you can hear anything and everything. And to honest, half the stuff on the radio will be forgotten within the year. I barely ever pay for a cd unless I really feel like the artist gave his all into making the album. And I always believe in seeing a band live as apposed to watching the dvd or youtube videos. That's where the real experience is, that's where it all started. Live concerts. If you can sell out a venue at 25$ a ticket at 30 different 500-1000 venues a year then 5 people in your band are making 20,000 a year... That's fairly reasonable since most bands are in it for the fun or in it for the experience and you can do 30 shows in 2-3 months. To be honest, I'd never pay 80$ to see some big event concert unless it was important for the band. If its just another profit margin then its just another sales event for them, especially if it's some terrible pop band.
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