Touring Can’t Save Musicians in the Age of Spotify

Every couple of months, I see another post in my Facebook feed about a band that was cut off by an 18-wheeler or skidded on a patch of black ice and rolled their van into a ditch. Some members are injured, and they're launching a Kickstarter campaign to pay for medical bills and to get back on their feet.

My heart (and often, money) goes out to them. But if you need to crowdfund your hospital costs, you were never on your feet to begin with. After many years as a touring artist myself, I'm honestly surprised that the person in that ditch has never been me.

Touring is, of course, the most ancient business model available to artists — and in many ways, it remains a vital part of their livelihood, even while the surrounding industry undergoes major upheaval to accommodate the new paradigm of streaming music. In response to the shift in revenue sources, standard recording contracts now intrude into the numerous nonrecording aspects of an artist's career. But the advice given to the creative generators of this multibillion dollar industry is still one that would be recognizable to a medieval troubadour: Go on tour.

And yet from a business standpoint, it's hard to find a model more unsustainable than one that relies on a single human body. This is why we have vice presidents, relief pitchers and sixth men. When applied to music's seemingly limitless streaming future, the only scarce resource left is the artists themselves. You would think the industry would protect such an important piece of its business model, but in fact, the opposite is true.

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The contribution of live touring to the music industry's bottom line is enormous, and the number is only growing. Consider Taylor Swift: According to Billboard, her live show grossed $30 million in 2013, with another $10 million in merchandise sold. And depending on whom you believe, she made anywhere from $500,000 to $6 million from her catalog on Spotify that year. While she is certainly making money in retail sales and digital downloads, both of those metrics are spiraling downward as people migrate away from the concept of owning music at all. Nielsen recently released numbers indicating substantial drops in both CD and digital-track sales, which are down almost $100 million year over year from 2014; streaming music continues to grow, but the revenue it generates isn't close to making up the difference, yet.

This means that the bulk of Swift's income rides on her ability to get to venues safely and perform. It also makes her much-examined decision to pull her 2014 release “1989” from Spotify the financial equivalent of her taking a few months off. Regardless how you look at it, the health of her singing voice is far and away the single most important aspect of her business.

Record labels have followed the money and addressed these changes in the contracts they offer to recording artists. In the predigital era, labels profited only from the physical recordings they funded, but as that income began dwindling, a new logic was applied to the artist-label relationship. Labels argued that by promoting the recordings they owned, they were also promoting the artist's career as a whole, and were entitled to profit from the full spectrum of artist's revenue streams — the “360 deal,” named for the totality of its coverage.

But labels do not take on the additional risks associated with their additional profits. Instead of protecting the health of their revenue-generating engine, they simply point to an artist's independent-contractor status, which releases them from any liability they would be on the hook for if artists were labeled employees. Rather than sparking a labor dispute, these 360 deals quickly became the new normal. As a result, administrators, support staff and office spaces are insured against the risks of doing business, while the company's income generators — the creators of their master recordings — are on their own.

Artists today are not only touring more to make up for their own lost recording-sales revenue; they're also being compelled to by the labels that also stand to profit. This makes it a great time to be a fan of live music: From the rise of electronic dance music to the regular resurrections of the Grateful Dead, a major musical event is never far away. But the physical price that artists pay for this easy access is steep. Last summer, Foo Fighters' Dave Grohl was forced to cancel shows when he fell from a stage in Sweden and broke his leg. Other artists with 2015 tour-date cancellations on account of injuries, surgeries and other health issues included Sam Smith, Miranda Lambert, Steve Aoki, Little Big Town, Meghan Trainor, Nickelback, the Black Keys and Kelly Clarkson.

That's a lot of injuries — and millions of dollars lost. The European shows canceled by Foo Fighters alone, including a headlining slot at the Glastonbury Music Festival, cost the band nearly $10 million in fees and travel expenses.) And of all the instruments on a given tour, the vocal cords are the most vulnerable to the harsh environment the road virtually guarantees; basically anything that inconveniences the ordinary traveler becomes a business risk for the singer. Regardless of the circumstances, the singer has to call on this small, unprotected instrument to deliver on a daily itinerary that can extend from a morning drive-time radio show to the meet-and-greet after the performance.

From royalty rates to basic safeguards against the standard hazards of doing business, recording artists begin the negotiating process with a deck that is stacked against them. This lopsided balance of power allows labels to treat all artists as replaceable until proven otherwise, and both sides know that there is always a long line of hopefuls outside auditions for “The Voice” or “America's Got Talent” to undercut a young artist's bargaining power.

The question of why recording artists have been unable to organize and collectively bargain the way other artists have — actors and screenwriters, for example — is one that has dogged them since the dawn of the record deal. Musicians do have a union, the American Federation of Musicians, but it's not a particularly strong one; it primarily represents members of symphonies, and it hasn't been on a national strike in 70 years. Recording artists are not really considered core members, because their tenures within the union tend to be shorter than those of lifelong pit musicians and orchestra members. Music is also a traditionally decentralized, live art form with an ingrained renegade spirit. Hollywood, by contrast, has a single dominant hub.

Perhaps musicians renegade spirit is what ultimately will save the next generation of recording artists, who are increasingly forgoing record deals altogether and going it alone. As true independents, they work the margin between the technology that makes recordings cheaper to create and a public that is steadily buying fewer of them. Without a label taking a bite out of multiple revenue sources, the numbers can actually work. Others are coming together in groups centered on advocacy and pressing for changes to the laws that dictate royalty payments in the new streaming economy — something that could mean all the difference when injury, accident or age brings a touring musician's career to a halt. But in the meantime, the vans and buses roll on.