The complex new revenue flows of the music business

Johnny Black had a nice article in the Guardian on Friday, So Who's the Biggest Star?

"It used to be easy to tell who the big acts were. If an artist appeared regularly on Top of the Pops or lodged their releases consistently in the charts, we knew they were popular and, very probably, financially successful.

That's no longer true. There are now hitmakers who appear frequently on TV, who are household names and faces, but who are not making fortunes. At the same time, increasing numbers of relatively unknown musicians are quietly getting rich without their faces ever appearing in Heat magazine, or even NME. The old rules for judging pop success no longer apply...

..."We need to look at a lot more factors to be able to determine who's really doing well today... the way their incomes are made up is much more complex. It's not just about how many records, or even concert tickets, you have sold."

...the increasingly lucrative revenue streams artists can tap into from a host of sources - including what is called "synchronisation", product endorsements, merchandising, internet streaming, ringtones, magazine cover mounts and broadcasting royalties.

Synchronisation means getting your music into TV ads, TV series and movies, and on to ringtones and computer games. It can be hugely lucrative: "Aerosmith have probably earned more through royalties in Guitar Hero than they have from selling albums in the past two decades," suggests Sat Bisla, founder of Musexpo, an annual Los Angeles-based international music and media conference."

We've seen business models evolving and getting increasingly complex in the music industry and although I've been watching the process with a kind of abstract academic eye for such a long time now, I don't know if I really got it until one day my then 10-year old son said he wanted to get some CDs by a rock group I had never heard of. Where had he come across this group? They produced the background tracks on one of the computer games he was particularly fond of at the time. He tracked down the name of the band, then actively sought out other samples of their work on YouTube and decided he liked them so much it was worth saving up his pocket money to acquire some of their CDs. Now if a 10-year-old with seriously limited disposable income can go to so much trouble then surely the promotional worth of outlets like computer games and YouTube must be obvious to even the most old style music executive, mustn't it? Mind you, I do have to admit, still, to completely failing to understand why the ringtones market is so lucrative. Perhaps I too could have been an executive at one of the big four?