Few inhabitants of the music world are as well placed to comment on its current state, and to offer a glimpse of its possible future, as Casey Rae. In his position as Chief Executive Officer of the Future of Music Coalition, a Washington DC nonprofit dedicated to empowering musicians through research, educational outreach and advocacy, he has a ringside seat for the current fights being waged in the halls of Congress and the boardrooms of corporations that will determine the fate of musicians in the digital age.

Not content with being a spectator to these historic events, Casey Rae is also an active participant. He’s the editor of The Contrarian, an online magazine dedicated to exploring issues in politics, media, metaphysics, technology and creative culture, and the head of Lux Eterna Records, an art-rock and experimental music label with releases by his alter ego, The Contrarian, and Strange Angels, his collaboration with San Francisco composer and performer Arthur Leon Adams III. And if that wasn’t enough, he’s also an adjunct professor of Communications, Culture & Technology at Georgetown University.

The Guv’nor caught up with Casey Rae prior to his participation in “Music Licensing Part One: Legislation in the 112th Congress,” a hearing before the House Subcommittee on Intellectual Property, Competition Policy, and The Internet that dealt with issues of licensing and royalty payments to artists from internet and digital radio. In this, the first of a two-part blog, he talks about the challenges facing musicians in the face of the current economy and the sea-change that the digital revolution and social media have forced on the business.

THE GUV’NOR: Let me begin by asking you to get out your crystal ball. What trends do you see on the horizon? What battles do you see looming for musicians? What, in your opinion, are the biggest challenges facing musicians today in the new business environment?

CASEY RAE: Musicians as a whole have always lacked leverage in terms of affecting the legal and marketplace structures that govern how they make a living. In the past, there were a few fairly narrow paths to reaching audiences, and major tradeoffs to get there. But at least you knew who was ripping you off! Nowadays, musicians have more options and greater flexibility with regard to how they manage their careers. The challenge is now maintaining control over how your music is used, by whom, under what conditions and whether or not that activity generates revenue. People like to talk about the collapse of the major label system, but in actuality, the big labels and publishers still wield tremendous power in the marketplace. Then there are the technology companies, the largest of which have enormous capital and scale. Unfortunately, musicians are often caught in the middle without a lot of influence over how law and policy are shaped or how private marketplace deals are hammered out.

These are issues facing creators writ large; on an individual level, many of the challenges are the same as in decades past. Certainly the leveling of the playing field has created a lot more competition for attention. It’s been said that the biggest obstacle to an artist’s success isn’t piracy, it’s obscurity. In some ways, that’s true. There’s also a premium placed on non-musical skills, like marketing. In bygone days, an amazing tenor sax player didn’t have to be the most charismatic social network personality; he or she just played the damn horn. And it takes a real investment of time to achieve that kind of mastery. Today, it can seem like a musician can spend a huge portion of their day pondering data, maintaining interactions with fans and trying to attract new ones. Musicians who play live have a tried-and-true method for gaining attention—get the right gigs and be really good. But it’s important to remember that there are many musicians, songwriters and composers for whom “getting in the van” isn’t an option. So the question is, can our cultural landscape support high-quality artistry outside certain narrow conventions? In some ways, the internet has made it easier to do niche; in others it has eroded the structures that have traditionally supported creativity outside the pop marketplace. I personally worry about a kind of cultural of Darwinism in which certain kinds of expression are driven even further to the margins.

You can already see this in the major label sphere. The big companies have gotten even more conservative about what they sign because it costs a ton of money to cut through the noise and they want a return on their investment. We can lament that all we want, but who else has money to kick in?

THE GUV’NOR: A part of me looks at the industry today compared to, say, 20 or 30 years ago and says “ ‘Twas ever thus.” Artists still don’t get paid royalties worth speaking of on their recordings, and the “real” money lies in touring and merch. So is this a case of “plus ça change” or is something really different happening?

CASEY RAE: The musicians’ advocacy nonprofit that I work for, Future of Music Coalition, has spent the past two and-a-half years conducting serious research into artist revenue streams. We identified something like 42 unique means by which artists can get paid, and devised a robust methodology to ask what we think are the most pertinent questions as apply to a whole range of musicians—from the jazz bandleader to the indie rock sideman to the classical orchestra player to the composer for-hire. As you might expect, the revenue picture for artists is quite complex, with most musicians relying on multiple activities to support their careers.

We are very keen to debunk myths, and one of the bigger ones is that touring and merch is a lock for making money. Not true! Being on the road costs money, and there are so many variables that even the best planning isn’t a perfect predictor of profit, or even break-even. Plus, with the decline of the recorded music marketplace, there is even more competition in the live space. Bands are staying on the road longer and facing tougher economics since there’s an abundance of supply, so to speak. We also found that merch comprises an incredibly small percentage of most artists’ earnings. That doesn’t mean it doesn’t count; it’s just not the bounty that some observers would have you believe.

In terms of royalties, there are challenges and opportunities. One example is that federal statute in the US allows artists to file to have their copyrights revert back to them after a 35-year period. The first wave of eligibility is this year, and it just cascades from there. Obviously, the music companies aren’t keen to give up their holdings, and there will be litigation (with a majority of suits settled without going to court). Then there are new forms of digital audio transmission, particularly streaming music services. If we’re talking about internet broadcasting, the royalty splits are actually transparent and quite fair: in the US, the performing artist gets half, and the label gets the other half. The artists’ money is paid directly and isn’t held against their debt to the label, which is huge. And, if the artist retains all copyrights (sound recording and composition) as is the case more often, they get the whole pie. Right now, we’re talking about fractions of pennies, but I see that structure as ultimately an advancement in artist compensation. For on-demand services like Spotify, it’s a different story, however, as there is no compulsory license. This means that terms are dictated to a large extent by protracted, contentious and expensive negotiations between the labels and the music service. Artists have next to no say in any of this. That’s an area I think needs a serious rethink.

(Originally published December 2, 2012)