Saturday, 30 November 2019

Rocket Fuel

I have a confession to make. I wrote about the Elton John film Rocket Man before having seen it. Back in August I was stating, ‘if you want to see a movie that conveys the musical impact of Elton John, you would be better off watching the bus scene in Almost Famous than digesting Rocket Man’.
            I’ve now seen Rocket Man. For me it is a game of two halves. I like the coverage of the pre-fame years, particularly the scenes of Elton John as a boy in suburban Pinner. When he becomes famous, though, the film becomes dull. It’s not that stardom or drug addiction are inherently boring, it’s more that this film doesn’t really capture their highs, lows and weirdnesses. Interviewed by Graham Norton this week, Elton John had far more engaging things to say about the megalomania and depravity of rock stars, as well as about the oddities of fame. In particular, I enjoyed the story about introducing his partner, David Furnish, to his mother for the first time, only to have Michael Jackson turn up and come along to the dinner date as well.
            And what of the music? I think my hunch was right. Almost Famous is the more effective film when it comes to illustrating Elton John’s brilliance. There is one scene in Rocket Man that cuts through musically, however. It depicts the composition of ‘Your Song’. What I liked about this scene is its relationship with ‘truth’. It could be considered false in relation to music making, but true in terms of illustrating what it feels like to write a break-through hit. You capture lightning in a bottle.
            It takes place at Elton John’s childhood home, where he has returned to live with his mother and stepfather, bringing his lyricist partner, Bernie Taupin, along with him. Taupin hands John the lyrics to ‘Your Song’. John goes to the piano and writes the tune in real time. This brought to my mind Oliver Stone’s film, The Doors, in which the band similarly create their breakthrough hit, ‘Light My Fire’, in a spontaneous jam session.
Looking at the scene in The Doors again, the guitarist Robbie Krieger has scribbled down the chords and lyrics to ‘Light My Fire’ beforehand, and there is some tinkering around by the keyboard player, Ray Manzarek, before he stumbles across the Bach-inspired introduction to the song. The fully realized version that follows takes place in a different context: it soundtracks a montage sequence in which we witness the band’s escalating fame. In contrast, in the film Rocket Man, Elton John finds the tune to ‘Your Song’ immediately.
Why then does the naturalistic setting in The Doors feel corny, while the theatrical scene in Rocket Man rings true? Part of it comes down to this staging: naturalism can sabotage itself if the detail is not perfect. Melodrama, on the other hand, can capture a truth to feeling without having to concern itself with historical accuracy.
            Another reason is that The Doors scene surely is false. ‘Light My Fire’ may well have emerged from the scribbled notes, been worked up in rehearsal, and had a quickly realised intro because, in  Manzarek’s words, ‘It just came out of, you know, fifteen or twenty years of music practice’. Yet there is still the feeling that the whole process would have taken longer than this.
            Elton John, on the other hand, really does take the words of Taupin and create fully-realized songs off the bat. ‘I put my hands on the keyboard and away we go’, as John stated to Norton this week. As one example, he composed the music for the double album, Goodbye Yellow Brick Road, in three days. Lest we forget, this is an album that includes ‘Candle in the Wind’, ‘Bennie and the Jets’, ‘Saturday Night’s Alright for Fighting’ as well as the title track. ‘Your Song’ was written just as quickly. John talked with Norton about its staging in Rocket Man. For him, the film gives ‘a pretty accurate description of how it was done’.
            Even though it is ‘true’, this remains a remarkable means of creating successful music. Other composers, in contrast, can toil for months. I’m not sure how widely known it is that John writes in this way. Yet my guess is, even amongst viewers who do not know about this process, the ‘Your Song’ sequence would still appear honest. Could it be that there something in the music that is letting us know?

Friday, 1 November 2019

Stream Weavers

In last September’s blog entry, ‘Stream a Lie’, I pointed out how the recording industry is disingenuous when it comes to its revenue figures:
Streaming income is not calculated in the same manner as physical sales income, yet the record industry presents it as such. In its market reporting, the industry lumps together the wholesale revenue from CD and vinyl sales with the money it receives from streaming and downloading companies to present an overall picture of industry wellbeing. This is misleading, as the revenue from physical sales income includes costs that are absent from streams. The former is provided as a gross revenue figure and the latter details net revenue. 
The result, in the UK, is that the trade figures provided by the British Phonographic Industry (BPI) look like this:

While I still stand by my analysis, there are some amendments to be made. In the first instance, while the money from physical sales is represented as a gross revenue figure, it was wrong of me to represent the money from streaming and downloading as net revenue. Some, but not all, of the expenses are taken out.
The percentage splits that make up the wholesale price of a physical release can be broken down as follows:

            Record company 45.5%
            Artist 20%
            Manufacturer 14%
            Distributor 12%
            Songwriting copyright 8.5%

The first key difference between the reporting of physical sales and the reporting of downloads and streaming is that the costs of songwriting copyright are only included in the former category. This not because the record companies are masking this expenditure in respect of downloads and streams, but instead because it is not them who bear it. They pay the songwriting royalties for physical sales; it is the digital service providers who pay them for downloads and streams. A more equal tabulation would nevertheless have these payments removed from all formats. It would then look like this:

This does make a difference. Whereas the record industry depicts their overall trade in 2018 as bringing in only 75% of the revenue that it had in 2000, once songwriting copyright is factored out it is instead worth 80% of the business at the turn of the century.
The next thing to eliminate are the costs of manufacture and distribution. As with songwriting royalties these form part of the record companies’ expenditure when it comes to physical sales but they are not spending in these areas for downloads and streams. On the one hand, there are no (significant) costs of manufacture. Each digital download of stream costs little to create. On the other hand, it is the service providers, rather than the record companies, who bear the costs of distribution. If we additionally remove these costs from the physical sales figures, we end up with the following chart:

Viewed from this perspective, the record companies were more prosperous in 2018 than they were in 2000.
            One reason why it is important to remove these costs is because it gives us a clearer idea of record company profits. Following on from this, we can gain a clearer perspective of what share of royalties it is fair for recording artists to receive. Record companies could perhaps justify their claim for 80% of the revenue for physical sales on the grounds that they had significant costs to bear. That 80% looks more questionable once the expenditure on songwriting royalties, manufacture and distribution are removed. Together they represent 34.5% of the wholesale price of a physical product. The record companies have nevertheless paid their artists the same royalty rates for downloads as for CDs. They have accounted for this parsimony by pointing to their figures. Their representation of revenue has painted a picture of an industry in decline, while at the same masking the reduction in their costs.
            Streaming has been treated differently. Whichever way the figures are represented, the position of the recording industry has improved. BPI’s own figures demonstrate an increase in revenue of 29% since trade bottomed out in 2015. My adjusted figures demonstrate an increase of 30%. Against this background, recording artists have been in a stronger position to demand higher royalties. They can also highlight the diminished role of record companies in the digital age. Some of them are being successful too. At the top end, there are artists who are now receiving 50% royalty rates for streaming.
            This also has an effect on the figures. If our next move is to remove the costs of royalties from each of the formats, bearing in mind that the record companies are now paying out higher percentages for streaming, the overall trend is reversed once more. We arrive once more at a downturn in the overall figures from 2008 to 2018. The trade in 2018 worth 83% as much as it was in 2000:

It should be pointed out that, even when we reach this stage, the figures do not detail net revenue. There are still the costs of artist advances, recording advances, video production, tour support, and marketing and promotion to take into account. IFPI have given their own representation of these figures, breaking down the US$500,000-US$2,000,000 that represents their ‘typical investment in a new signing’ into expenditure that looks like this:

There is some sleight of hand here. Much of the expenditure on advances, recording costs, video production and tour support is borne by the recording artists out of their share. The record companies advance this money to the artists, but it is ‘recouped’ from their royalties. Amongst the expenditure outlined by IFPI, it is only the costs of marketing and promotion – tellingly portrayed as the major expense – that the record companies pay for outright. They do, however, also have staff, legal and facilities costs to account for.
And there is one further twist. The BPI do not adjust their figures for inflation. If we update my final ‘net’ figure according to the Bank of England’s inflation figures, we end up with this chart:

The result is an industry that is worth only 50% as much in 2018 as it was at the millennium.
What can we gather from all of this? On the one hand, the BPI has inflated a story of decline. On the other hand, it has under-reported it. When it comes to the over-representation of decline, the most important tactic to bear in mind is not the overall totals, but instead the manner in which BPI’s representation of revenue masks the differences between physical sales and downloads/streams. Not only has this enabled them to downplay disputes about artists’ royalties, it has also aided them in their negotiations with the service providers. They have obscured the fact that the turn to downloads and streaming has reduced their costs.
The under-reporting is harder to account for. The recording industry has tactically employed its decline as a means to strengthen copyright laws in their favour and as a means to defend punitive recording contracts. Why then, has it not factored in inflation to illustrate an even more precipitous decline? Maybe, this too is about their negotiating position. They want to tell the world they are suffering. They don’t want to place themselves as beggars, however, by demonstrating that theirs is an industry that has been on its knees.