Economies of Scale and the True Cost of Music

Music is expensive. Far more expensive than the average consumer is aware. I had this conversation twice last week, so I figured I’d blog about it.

Let’s use Rob Gardner’s Lamb of God oratorio as a case study:¹

Composition

The Lamb of God is an 83-minute long work for vocal soloists, choir and full orchestra. From what I can tell, the orchestral instrumentation is 2.1.3.1 – 4.0.3.1 – timp, 3 perc., harp, piano – strings.

How much does such a work cost? Well, New Music USA has this friendly commissioning fees calculator to give us a rough idea. A work of concert music over 25 minutes for orchestra and choir would cost on the low end . . . $33,600. The upper end is close to $90,000.

Want a second opinion? According to the Composers Association of New Zealand, the piece would cost at minimum of NZ$1000 per minute. In US dollars that comes to around $56,000.²

Recording

The Lamb of God was recorded by the London Symphony Orchestra in England and the Spire Choir in Arizona.

The London Symphony pays rates based on the UK Musicians Union scale. On that scale, 83 minutes of music would need to be recorded in four 4-hour sessions. Based on that scale,³ just one of those 4-hour sessions costs around $11,072. All told, he’s paying nearly $45,000 for just the orchestra musicians.

The choral musicians (about 60 strong) are based in Arizona, which means he can probably get them for less than the going Los Angeles rate of $44 an hour. Assuming he pays them $25 an hour and the recording sessions last an additional 16 hours, that’s another $24,000 for the choir.

Already we’re at nearly $70,000 and we haven’t even paid for the following:

• recording engineers in Arizona and London
• recording spaces in Arizona and London
• orchestral cartage costs
• mixing and mastering costs

These amount to at least $15,000, likely closer to $20,000.

Distribution

So we’ve just dropped at least $85,000 to record the work — plus at least $34,000 if it were a paid commission — and we’re still not done. We still have to print CDs and booklets and get the recording on iTunes/Amazon/etc. Let’s say you want 1000 copies in jewel cases with an 8pp. printed insert, all color. And you need a designer. All told, you’re looking at another $2,400, for just 1000 CDs.

Spire Music’s Bottom Line

Rob writes his sacred music pro bono. (He has valid reasons, just as those who charge have equally valid ones.) But that still leaves Spire Music a nearly $90,000 bill to record and distribute his oratorio. Ignoring for the moment well-heeled donors, how will he make that back?

Well, this is what he charges for various products related to the oratorio:

• full album digital download: $12
• single track download: $1
• physical CD: $13
• choir and piano selections for $2
• full piano and vocals for $10.50
• orchestra excerpts for $12
• full orchestra score and parts for $50

His unusual copyright policy means that instead of a church choir of 15 paying $30 to perform a movement, they pay only $2. Or instead of an orchestra buying the score for $125 and renting parts for $600,⁴ they pay only $50.

Needless to say, Spire Music has a serious commitment to non-profit. Still, the money must come from somewhere, so how does Rob Gardner break even?

Assuming he breaks even with just these products, $90,000 translates into:

• 7,500 audio downloads (ignoring the cut iTunes/Amazon/etc. take)
• 45,000 downloads of choir and piano selections
• 1,800 downloads of the full score and parts

Likely (again, leaving aside donors), that sum would come through some mixture of these products, meaning he needs to make probably at least 15,000 sales. By way of comparison, there are 14,160 Latter-day Saint congregations in the United States. If every single US congregation bought one selection from the work, that’s only $28,000. He’s still $62,000 in the hole (and, again, that’s not including the $33,000+ commission he forfeited).

Economies of Scale

Needless to say, music is expensive. The only reason it doesn’t look expensive to the average consumer is that, for them, it relies on economies of scale. Recording and distributing an 80-minute oratorio may cost $90,000 but if Rob can get, say, 45,000 people (i.e., the football stadium capacities of Boston College or the University of Utah) to each pay $2, he breaks even. Alternately, if he can get 10,000 people to pay an average of $9, again he breaks even.

In other words, only by selling his music out to tens of thousands can Rob Gardner achieve the low prices that the average consumer assumes.

Although a decent (and again let me assert low) estimate, those figures are nonetheless still an estimate.

Want harder numbers?

In his Kickstarter campaign to produce a concert film of the Lamb of God, Rob places the overall budget to film the work in Walt Disney hall at $200,000. Of that budget, half went to “hiring the orchestra, getting all of the performers to Los Angeles, and the major task of marketing and distributing the film to theaters.“ The campaign raised another $100,000 to cover these additional costs:

• Lighting and Stage Design: $10,000
• Post-production (edit, mix): $15,000
• Audio crew and equipment: $15,000
• Film crew and equipment: $25,000
• Venue rental, equipment and labor: $35,000

So there you have it: a confirmation that $90,000 isn’t an unreasonable estimate for the CD recording but rather is likely on the low end.

And how did he raise those funds for the film endeavor? 1,171 individuals paying an average of $94.53, including 26 who paid $1,000 or more. Economies of scale. In total, he exceeded his fundraising goal by $10,000 — which may be just enough to cover all the promised gifts.

Why is Music So Expensive?

Professional musicians aren’t good amateurs. Growing up, they didn’t study with the lady down the street at $15 a lesson; they studied with professionals charging at least $50 a lesson, likely up to $150 or more. And they didn’t just play on their spare time for a few years; they developed their skills practicing and performing at least 2 hours a day for at least a decade.

Moreover, among classical musicians, most have graduate degrees and many have doctoral degrees — which brings their total to almost 20 years of intense, specialized training. If we measure skill based on educational investment, musicians handily out-skill lawyers (3 years and a bar exam? Please.) and would arguably be about the same level as doctors. (That is, the doctors can argue they have as much specialized training. The musicians don’t need to make that argument.)

Furthermore, doctors and lawyers can rest reasonably assured their work days will booked to at least 8 hours. Musicians often work fewer hours a day.

All told when a musician charges, say, $150+ for a 4-hour recording session, no one should be blushing at this figure. It just affirms that, unless you having the backing of an institution or of wealthy individuals, the only way the average person can afford music is through economies of scale. By getting 100 or 1,000 (or 10,000) of your best friends to all pitch in for a product you can share, what was once unaffordable becomes attainable.

Economies of scale are also the economic logic behind commissioning consortiums (groups of half to several dozen participants who pay for a new work), but that’s a subject for another post.

1. I don’t know him personally and haven’t spoken with him about the actual numbers, so this is simply an informed estimate.
2. A third opinion? The UK Musicians’ Union would price the work at £800 ($1150) per minute. You see where this is going.
3. Per session breakdowns — Wind and percussion players: (118.76+113.12)x5+118.76×6+107.64×5 = £2,410.16. String players (assuming standard complement of 12.12.10.8.6): 129.12×5+107.64×43 = £5,274.12.
4. A figured fudged from what John Mackey charges to rent his 30-minute band work Wine-Dark Sea.