State Champ Radio follow the money
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Once upon a time, most artists performed live to promote new albums. For most acts, the real money was in music sales, so they went “on the road” with schedules and strategies to maximize them.
These days the live business is a juggernaut of its own, with higher ticket prices, adjacent businesses like merch and VIP seats, and schedules, plus strategies of its own. So creators at all levels of popularity are starting to realize that it may no longer make sense to tour the whole country, or world, to promote a new release. In some cases, there isn’t one; in others a tour can boost an entire catalog. The old model of touring focused on building an audience, which meant artists would play cities where they weren’t so popular. Now touring is a revenue stream, so many artists double down to play more shows in cities where they’re already big.
The economics of touring means that acts run up costs every day they are on the road but only bring in revenue when they perform — so it makes sense to play bigger shows, in fewer places, with fewer days off. Metallica’s M72 tour consisted of two-night engagements and a no-repeat pledge to motivate fans to see both. The international legs of Taylor Swift’s Eras Tour involved more shows in fewer places — she covered Asia with four shows in Tokyo and six in Singapore and the Nordic region with three in Stockholm. The natural end of this thinking is a residency, or a few of them, and Adele took the summer off from her Vegas residency to play 10 shows in Munich at a custom-built venue with a capacity of 74,000. Why go to fans when fans can come to you?
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As it happens, this solves another problem with the touring business. As increasing competition for concert dollars inspires more elaborate productions, costs are skyrocketing — and many of them involve transportation and setup rather than a performance itself. For Metallica, much of the cost is in “load-in” — moving and building a doughnut-shaped stage with standing room in the middle, plus eight towers of speakers and monitors that weigh 11 tons each. The resulting expenses, which involve 87 trucks and several days of setup, make single shows difficult. Adele’s Munich show used what’s said to be the world’s biggest video screen, plus fireworks, confetti, smoke, fire and a string section. As expensive as that must be to build, imagine the cost of moving it and setting it up again a couple of times a week? How many venues even have room for a 220-meter-wide screen?
Doing more shows in fewer places also makes it practical to deliver events, rather than just concerts. Touring artists have to compete with festivals, which offer fans a lot of acts for their money, plus an experience to remember — and, not incidentally, share on social media. A memorable production, whether that means the world’s biggest screen or 11-ton speaker towers, can do the same. Personally, I don’t think Metallica or Adele needs any of this — I’d be just as happy to see either in a club, in front of a brick wall — but bigger productions seem to create a sense of FOMO.
Fans have certainly demonstrated their willingness to travel. When I saw Metallica last year in Hamburg, most concertgoers came from other German cities to see both shows. Swift’s European tour debut in Paris was filled with fans from the U.S. and Canada who realized that tickets there and a trip to France cost about the same as tickets back home. To some fans, Swift’s show is a vacation — Paris is just something to see on the way there.
In crude economic terms, concert travel essentially reallocates expenses from acts to fans — artists travel less, so concertgoers travel more. Most people don’t want to pay more than a certain amount for a concert ticket, but they seem more willing to spend on related travel. (I just spent about $300 to go to Stockholm to see Bruce Springsteen, an amount that seems too high to spend on a ticket, even though I essentially went to see the show.)
There are other costs and benefits, too. Younger fans can’t always travel alone. And as several European publications pointed out in their coverage of the Adele residency, this isn’t exactly good for the environment. (I think it makes more sense to tax travel rather than to object to a specific type of travel.) Residencies can also be more pleasant for artists — there are no songs about how nice it is to cross the U.S. in a tour bus. The flexibility is nice, too: Munich is a lot nicer in the summer than Las Vegas. Playing a few nights a week makes it easier to have a family life.
As much as I loved the Metallica and Adele shows, I think I still prefer the old model — although it’s easier for me to say that because I’m fortunate enough to live in a major city. I think there’s still long-term value in building a fan base the hard way. And I worry that fans who spend more money traveling to concerts will end up seeing fewer shows as a result. None of that changes the economics of touring, however, and organizing a profitable and artistically effective tour means understanding that.
The upcoming elections in the United States in November will be profoundly important, with consequences for the economy, foreign policy, technology and perhaps even democracy itself. From a music industry perspective, though, there just isn’t all that much at stake. After two decades of change, the industry has found a new business model in the U.S., in the form of paid subscription streaming, and there’s only so much a new president could do to either improve that or screw it up. Most of the industry’s policy priorities involve either legislation (which any president would almost certainly sign) or in-the-weeds rulemaking procedures.
You certainly don’t get this sense from artists and executives, most of whom support Vice President Kamala Harris, the presumptive Democratic nominee for president — and generally tend to vote Democrat. This probably comes from their personal politics — Harris doesn’t have an extensive track record on intellectual property policy or other issues important to the music business, although she was seen shopping for vinyl and appears to have excellent taste. (Make America analog again!) For all the disdain they get from media executives, Republican presidents have often been better for it, since they tend to reduce taxes, regulation and barriers to mergers. Same goes for legislators. Most music industry executives might not care for the politics of Sen. Marsha Blackburn (R-Tenn.), but she’s certainly helped their business.
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Which candidate would be better for any specific business isn’t entirely clear because, at a time when the world is growing more complicated, U.S. politicians seem to offer fewer specifics on complicated issues. Both Harris and former president Donald Trump seem to be running more on who they are than on what they plan to do. (Based on Trump’s comments at the National Association of Black Journalists event in Chicago on July 31, he seems to want to run on who Harris is, which says far more about who he is, and not in a good way.) Some of this seems inevitable — Trump likes to change his mind and Harris only entered the race after President Joe Biden dropped out of it on July 21. It might just reflect an increasingly tribalized electorate.
The music industry’s biggest issues have remained bipartisan, though, and they seem to occupy a rare demilitarized zone between parties in which politicians who don’t normally agree on much come together. The quintessential example is copyright, which often unites Republicans who favor property rights and Democrats who want to support the arts. The most complicated and important part of the 2018 Music Modernization Act was introduced in the House of Representatives by Rep. Hakeem Jeffries (D-NY) and Rep. Doug Collins (R-Ga.), who may not agree on much else. (In 2018, they shared their “Summertime Heat” playlist with Billboard.) This year, the NO FAKES Act brought together Blackburn and Sen. Amy Klobuchar (D-Minn.), among others.
The industry’s traditional opponent on strong copyright is Silicon Valley platforms, which had a lot of power under former president Barack Obama. (Months ago, I saw Obama talk about the dangers of online misinformation without mentioning that he did little to regulate the platforms it’s on.) Biden, who has been a strong supporter of copyright, has been more skeptical of Big Tech. Now venture capitalists and technology companies, who tend to vote Democrat but favor libertarian politics, are courting both parties. Reid Hoffman and a group of 100 venture capitalists have announced their support for Harris, while Trump’s choice for Vice President, J. D. Vance, sometimes seems to operate as a wholly owned subsidiary of arch-libertarian Peter Thiel. The next president will inevitably be asked to deregulate artificial intelligence at the expense of the rightsholders who own the works it will be trained on — the only question is who it will be. Investors will also push to legitimize cryptocurrency — or at least reduce the legal barriers to pretending that it’s an investment instead of a high-end pyramid scheme.
The other big issue these days is antitrust law, which the Biden-appointed Federal Trade Commission chair Lina Khan is trying to strengthen. The immediate issue is the Justice Department’s antitrust lawsuit against Live Nation Entertainment, but more aggressive antitrust enforcement would also make it harder for the major labels to buy catalogs and companies. Although constraining the majors could make it easier for smaller companies to compete, it could also reduce the number of potential buyers they might attract. And although Republicans have traditionally wanted to weaken antitrust law, some populists now see it as a tool to reduce the power of platforms like Google.
The next president’s ability to help or hurt the music business may come down to putting copyright provisions in trade treaties, which doesn’t really resonate with the public. AI initiatives could matter, too. More AI legislation will almost certainly follow the NO FAKES Act, but that debate mostly sets different businesses against one another. (The NMPA recently asked the House and Senate Judiciary Committees to adjust copyright law, but that’s not going to happen so soon.) It’s harder than ever to pass federal legislation, and the president can only do so much to help.
The music business will also try to get wins on smaller issues — whether it’s legal to train an AI on copyrighted content and how much involvement of AI makes a work ineligible for copyright. These are the kind of subjects that require position papers rather than strong rhetoric. But we may not see those until 2025.
As a music journalist, I tend to look at fan armies with only professional interest — what they mean for the industry and how I can make sure they won’t figure out where I live. Last week, however, I suddenly had to face the fact that I’m in one — and I have been for the last 35 years. And I realized that many creators might need to change the way they think about cultivating and keeping superfans.
I went to Stockholm last week to see Bruce Springsteen, one of my favorite artists, for what must be at least the 30th time. I stayed in a hotel close to the venue, which was full of people like me — by which I mean Springsteen fans of a certain age (ahem) who wanted to see the concert enough to travel from all over Northern Europe and, in some cases, the U.S. Many came with spouses or children, and some planned on seeing a few shows — or even a couple of weeks’ worth. One couple said that they were happy Springsteen now gives himself a couple of days off between shows, since it gave them more time for sightseeing during the vacations they organize around concerts.
These people don’t think of themselves as part of a fan army. They don’t have a nickname or collect different versions of the same CD. I don’t, either. In fact, I feel a bit sheepish saying that this concert was one of the highlights of my summer, or that I spent a few hundred dollars to go, but it is and I did, and it was totally worth it. After the show, about two dozen people gathered in the lobby after the show to talk highlights and trade war stories, and some of them gathered again the following night after cancelled flights left them stranded in Stockholm. I feel even more sheepish about how much I enjoyed that.
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Whatever. From a music business perspective, this is just what superfans do. One difference between his and most is that Springsteen built his audience the old-fashioned way — with unforgettable live shows that convinced fans to come back and bring friends (and, these days, kids). The people in my hotel are obviously the exception — I’m talking about a few dozen people in a venue that holds more than 50,000 — but at this point I think Springsteen concerts mostly draw serious fans. (Springsteen opened with “Seeds,” which he only ever released as a live performance on a 1986 box set, so I assume he thinks the same.) And although it’s hard to be sure, I think most of them were won over by his concerts.
These days, music executives focus less on live acts — how live are most pop performances anyway? — and more on hit singles. Fan armies are built online, usually around the shared experience of hoping a song will go to No. 1 or buying extra copies in order to boost it. But how long will that last? The music you love when you’re young tends to remain in your life, but going to concerts might have more appeal over time than trading gossip about chart position online. Cultivating an audience devoted enough to keep coming back year after year can be much harder — but it can also be more effective.
The problem is that this part of the business is hard to see in data. Industry executives often talk about how much superfans are worth in terms of the CDs or tchotchkes they buy, but it’s harder to measure the effect of fans who keep coming back over the course of years. I saw one Springsteen show this year and two last year, which doesn’t really move the needle. The 30-or-so shows I’ve seen would, of course, but those were over a period of 36 years — starting with, if you’re curious, the Tunnel of Love Tour in May 1988. (I was already enough of a fan to attend two of the five shows — and then I was really hooked.)
What keeps me coming back — and I think what keeps most fans coming back — is that Springsteen delivers shows that are both consistently great and fairly different. If he’s had an off night, I haven’t seen it. At the same time, he makes every tour different and varies the set list every night, with moments of genuine magic — in Stockholm he delivered a haunting “Racing in the Street” and pulled a kid up onstage to sing the chorus of “Waitin’ on a Sunny Day.” Others keep going back to hear rare favorites — seeing Springsteen play “Jole Blon” in September 2012 was a profound experience for me, even if most of my friends had absolutely no idea what I was talking about.
You could say a lot of these things about a lot of rock bands — there was a time when playing a different set every night was the rule instead of the exception. And it does seem to draw people in. Fans love a curveball of a cover, and some even appreciate the flubs — there’s so much more at stake without the artificial perfection that comes from a click track. Communities are built from appreciating, comparing and, yes, griping about difference performances. Just read the New Yorker story about Dead & Company to get the idea.
Like any true fan, I’m going to say Springsteen is different. More than any other current artist, he believes — and gets concertgoers to believe, at least for the time he’s onstage — that rock actually matters, that there’s more at stake onstage than entertainment, that this kind of music can actually sustain you. As I get older, with less time to drive down an empty highway for no reason at all, it gets harder to believe that. But I’d like to. Maybe in some way I need to — so much that I’ll be back next year and probably again the year after that.
For a little over a year, since the Fake Drake track bum rushed the music business, executives have been debating whether generative artificial intelligence is a threat or an opportunity. The answer is both — creators are already using AI tools and they already compete with AI music. But the future will be shaped by the lawsuits the major labels filed two weeks ago against Suno and Udio for copyright infringement for allegedly using the labels’ music to train their AI programs.
Like most debates about technology, this one will be resolved in real time — Internet start-ups tend to believe that it’s easier to ask forgiveness than to get permission. Although neither Suno nor Udio has said that it trained its program on major label music, the label lawsuits point out that both companies have said that using copyrighted works in this manner would be “fair use,” a defense for otherwise infringing conduct. They’re not admitting they did it — just defending themselves in case they did.
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Whether this qualifies as fair use is well over a million-dollar question, since statutory damages can reach $150,000 per work infringed. The stakes are even higher than that, though. If ingesting copyrighted works on a mass scale to train an AI is allowed under fair use, the music business could have a hard time limiting, controlling, or making money on this technology.
If it’s not, the labels will gain at least some control over these companies, and perhaps the entire nascent sector. There are other ways to limit AI, from legislation to likeness rights, but only copyright law has the kind of statutory damages that offer real leverage.
Although neither Suno nor Udio has issued a legal response, Suno CEO Mikey Shulman released a statement that said the labels had “reverted to their old lawyer-led playbook.” The obvious reference is Napster, since most people believe that in the late ‘90s the music business saw the future and decided to sue it.
That’s not exactly what happened. The major labels knew that the future was digital — they lobbied for the 1995 Digital Performance Right in Sound Recordings Act, which ensured that streaming services had to pay to play recordings in the U.S., even though traditional radio stations don’t. They just didn’t want peer-to-peer services to distribute their content for nothing — or to have to negotiate with them while they were doing so. In July 2000, three months after the major labels sued Napster, leading executives sat down with the company to try to figure out a deal, but they couldn’t agree; the labels negotiated as though Napster needed a license and Napster negotiated as though it didn’t. In the end, after a decade of lawsuits and lost business, creators and rightsholders established their right to be paid for online distribution and the music sector began recovering.
And here we are again: History isn’t repeating itself, but it seems to be rhyming. If the labels negotiated with Suno and Udio now, how much would those companies be willing to pay for rights they may or may not need? It’s easy to make fun of either side, but it’s hard to know how much to charge for rights, or pay for them, before you even know if you need them.
These lawsuits aren’t about whether creators and rightsholders should embrace or avoid AI — it’s coming, for good and ill. The question, in modern terminology, is whether the embrace will be consensual, and under what terms. Most creators and rightsholders want to do business with AI companies, as long as that actually means business — negotiating deals in something that resembles a free market.
What they’re afraid of is having technology companies build empires on their work without paying to use it — especially to create a product that creates music that will compete with them. That depends on the outcome of these lawsuits. Because if you don’t have the right to say no, you can’t really get to a fair yes.
A couple of weeks ago, at a culture conference organized by the German recorded music trade organization, I heard German Justice Minister Marco Buschmann put this as well as anyone I’ve ever heard. “The moment people have the opportunity to say ‘No’ and to enforce this ‘No,’ they gain a legal negotiating position,” he said in a speech. (Buschmann also makes electronic music, as it happens.) In the European Union, rightsholders can opt out of AI ingestion, which is far from ideal but better than nothing.
What happens in the U.S. — which often shapes the global media business — might hinge on the results of these lawsuits. There are two dozen copyright lawsuits about AI, but these look to be among the most important. Some of the others are mired in jurisdictional maneuvering, while others simply aren’t as strong: a lawsuit filed by The New York Times could involve a different fair use determination if the ingested articles are used as sources but not to generate new work. These cases are straightforward, but they won’t move fast: It’s easy to imagine the issue going to the Supreme Court.
Despite the high stakes — and what will almost certainly be a rap beef’s worth of sniping back and forth — determinations of fair use involve a considerable amount of nuance. Fair use makes it legal in some cases to excerpt or even use all of a copyrighted work without permission, usually for the purposes of commentary. (An iconic Supreme Court case involved 2 Live Crew’s parody of the Roy Orbison song “Oh, Pretty Woman.”) This is far from that, but Suno and Udio will presumably argue that their actions qualify as “transformative use” in the way the Google Books project did. Next week I’ll write about the arguments we can expect to hear, the decisions we could see, and what could happen while we wait for them.
