Michael Hosty is a small-business man. He has a company van, equipment, skills and talent. He buys insurance and pays his taxes.
Founded in 1992, his company has a monopoly from manufacturing to retail on its main product — Hosty memories — from which every other product flows. The Hosty brand is known far and wide, at least across Oklahoma, well into parts of Texas, and around the region. His company has a dedicated following of customers.
Yes, Mike Hosty is a small-business man. He works in the music business, and the business of the music business is music.
“What would you rather be doing? Would you rather be here playing music, up there on that stage with your guitar, or would you rather be at Long John Silver’s?” Hosty asked. “My worst day playing music is better than any day working at Long John Silver’s.”
Like most successful small businesses, Hosty has a website, including an online store, along with Twitter, Facebook, Instagram and YouTube accounts. Unlike most Oklahoma musicians, Hosty even has a LinkedIn account that’s mostly up-to-date and includes his work history all the way back to his youthful days as a sacker at Skaggs Alpha Beta.
“The revolution will not be televised because its going to happen on the Internet,” Hosty said.
Industrious in the industry
An OKC native and OU graduate, Hosty is part of an Oklahoma music industry that dates back to the Civil War and the five “civilized” tribes. They didn’t have electric guitars back then, but there were people writing songs, recording them (on paper), and performing in front of people just like there are today.
On a recent night in Stillwater, Hosty played one of his signature products — the song Oklahoma Breakdown, which was the No. 1 song in Texas for Stoney Larue in 2007 — with the other half of the Hosty Duo, Mike “Tic Tac” Byars, at Willies Saloon, where Garth Brooks got his start. (It says so right on the wall.)
It’s one of a dozen or more shows Hosty will perform, either solo or as the Hosty Duo, this month, with original songs from his growing catalog of HossTone Music recordings.
While it’s hard to put Hosty’s music in a box, his rock/country/blues/soul songs evoke musical memories of the last five decades, including Johnny Cash, James Brown and Al Green — the titles of three of his original songs. His stage performance combines a little Frank Zappa humor with a willingness to respond to the audience. For a price, he’ll make up birthday songs for show-goers, and he’ll even humor silly cover requests for 12 bars or so.
Putting art into numbers
Hosty and Byars are only two of the 300 musicians employed in Oklahoma in 2014 (the most recent year for which data is available), according to the Oklahoma Employment Securities Commission. If you believe that data, the mean hourly income for those musicians was about $47 an hour that year.
“There are people working for the orchestra, the musicians, that are making their living from that,” Ley says. “I can’t imagine them reporting their income as anything other than music.”
For the record, the Oklahoma City Philharmonic lists about 90 musicians and the Tulsa Symphony lists about 80 musicians on their websites. Those organizations also have staffs and require millions in contributions to fund their activities.
But most musicians in Oklahoma, like Hosty, are self-employed small-business men or women who earn their livings from live performances, merchandise sales, radio airplay and publishing. Certainly, they don’t have budgets in the millions of dollars.
The hourly rate reported by OESC probably isn’t realistic, either, as all gigs require equipment, travel and rehearsal time.
“Hosty, I imagine he can sit down and learn a song in about 10 minutes. He’s so amazing, probably less than that,” Ley said. “But if you have an entire band, you’re definitely going to have some rehearsal time. You’re talking about the drive to the gig, and you’re probably going to have your own PA system.”
Hosty cruises around the region in a white van packed with merchandise, sound equipment, multiple guitars, pedals and other tools of his trade, like a kazoo.
“That’s the idea of a working musician,” Hosty says. “It’s like a carpenter: You’re going to go to work today. You’re a musician: You’re going to go play some music. That’s what your goal is — you write songs and go play them.”
Like other branches of government, the Oklahoma Film & Music Office has a hard time collecting data to show the impact musicians have on Oklahoma’s economy.
“Where do you start?” asks Lindsey Flowers, deputy director of Music. “I have a questionnaire put together, and Folk Alliance (International in Kansas City) is my first chance to use it.
“I’m trying to figure out which cities artists play in, how many gigs per year, what percent of their income comes from music, do they sell merch’? It’s not simple.”
A diversified strategy
It’s also true that most musicians do other things on the side to earn money. Hosty, 45, has offered generations of guitarists lessons on how to play and improve, and he has also been an adjunct instructor for ACM@UCO, teaching students the ins and outs of the music business from a firsthand perspective.
Even though he’s only 33 years old, Ley also knows something about how the industry works, because he lives it and teaches it. Last year, in addition to his academic duties at ACM@UCO, he played drums and percussion at 50 to 60 shows with Oklahoma City icons the Flaming Lips and his other band, Colourmusic.
He also knows not everything is reported on tax returns or questionnaires in an industry that has a large cash component via tip jars and cash merchandise sales. One of the first things Ley talks about in the finance class he teaches at ACM@UCO is why a musician would want to report cash income.
“You’re getting paid in cash. It’s pretty cool. You don’t have to pay taxes on it. That’s pretty great, right? It’s money the government doesn’t know about,” Ley lectures. “Fast-forward two years — or you want to buy a car or you want to buy a van to tour with the band or you want to buy a house — when it comes time to get a loan, you have to have some sort of proof of income, and you haven’t been reporting it. You don’t even write it down, so you really can’t even tell someone about it.”
That makes measuring the economic impact of the music industry very problematic. There are few studies anywhere, but one for the state of Georgia published in 2011 estimated that music brings in nearly $4 billion annually, employs nearly 20,000 people and brought in more than $125 million in tax revenue. In Nashville alone, the economic impact of the music industry is estimated at about $10 billion annually.
There are dozens of music festivals across the state of Oklahoma, including the Woody Guthrie Festival in Okemah, the Norman Music Festival, the Center of the Universe Festival in Tulsa, Metro Music Fest in OKC’s Bricktown and Jazz in June in Norman, just to name a few.
Jazz in June estimated that its 2010 event generated more than $3 million in total economic impact, including more than $250,000 in state and municipal sales taxes.
It probably adds up to at least a couple of billion dollars and perhaps a few hundred million dollars in tax revenue for the state of Oklahoma. Or not.
The digital dynamic on a global level
In an age when few people buy CDs and everything is streamed, the ability for musicians to make a living in music still comes down to writing great songs, playing them live, selling merchandise and collecting the money.
However, much of the industry is consolidated into just a few international acts like Adele, Taylor Swift and Kendrick Lamar. According to Nielsen, 3.1 percent of all the albums sold in the United States last year were Adele’s latest album. All told, she sold 7.4 million records in the last six weeks of 2015, or roughly 16.4 percent of all recordings sold during that brief time. Hosty sold a little less.
Depending on the act, a rat’s nest of rights and payments hides behind trick-accounting practices and limited accountability. Before anyone sees proceeds from a digital sale, Apple, Amazon, Google and others take 30 percent off the top. Because you can’t generally get in those digital stores without an aggregator who places your album or single in the digital stores, that company is also going to take a cut — perhaps 10 percent, perhaps more.
If an artist has a label, it takes what’s left, 60 percent or so, distributes about eight percent to the songwriter’s publisher and then takes a cut for its expenses — packaging, advertising, promotion and any advances on having the record produced and recorded. After everyone else gets paid, the artist is lucky to get 20 cents on the dollar and then pays producers, managers, accountants, lawyers, musicians who played on the record and just about anyone else who participated in ways small and large.
In most cases, the artist actually makes more on physical CD or vinyl sales, but, because of streaming, the only type of recording sales that are growing are vinyl records, which are typically sold at venues where the artist is performing. For the working musician, managing inventory is an important part of the job and being in the music business.
Streaming services like Spotify, Apple Music and Pandora affect what musicians can earn from vinyl and CD sales, and even digital albums and singles, because people pay streaming companies directly for pennies on the dollar instead of buying and owning physical or digital media. When you pay a streaming service, you are the product to them as they gather your listening habits and turn that on you, Hosty said.
“The ease and access to thousands of songs for free means two things,” Hosty said. “One, the songs are not played enough to generate credits to be counted for payments — or the payments are pennies — and secondly, the streaming music also cuts into the sale of CDs which, for an independent artist, was the major source of revenue. CDs nowadays are just fancy business cards.”
Ley agrees, but he and Hosty think the whole streaming thing might eventually work out in musicians favor.
“It bothers me that we look back at the ’90s — the late ’80s, ’90s, 2000s — with the peak of the CDs, compact-disc sales, and say: ‘That’s the norm, that’s the heyday, that is the music industry’,” Ley says. “The music industry has always been volatile. It’s up and down, it’s left and right. It’s just the craziest thing ever.”
Hosty offers this advice: “Own music; don’t rent it. Make lasting memories with a physical copy you can pull out years from now and enjoy. Don’t be a metric for advertising through streaming. Don’t give away your power of choice.”
As an academic, one of Ley’s roles is to quiet fears that parents may have about their children getting into the music business.
“If you work in the oil industry, which is just as volatile as any other industry you can think of, there’s a cap as to what they’re going to make in their lifetime, and there’s probably a floor as well,” he says. “In the music industry, there is no floor and there is no cap. You can make as much money as you can possibly fathom. It just depends on who your child is, and what they’re interested in doing, and how hard they work. That’s not really what a lot of people want to hear.”
‘Employee’ health in the music business
Hosty said aspiring musicians should ask themselves some simple questions: “Can you make music that you want to make, play gigs you want to play for people who want to hear you? It’s a balancing act, for sure. But then that’s the whole idea. What do you want to do? You have choices, decisions you have to make. Do I want to be a working musician or do I want to pursue something else?”
In Hosty’s case, one of the people who wanted to hear him play includes a physician who also plays guitar and who hired him to play an Arkansas house concert in 2013. Before the show, the doctor examined Hosty after he had joked about trading his performance for a free echocardiogram.
“He told me, ‘Oh wow, you’ve got something seriously wrong with you,'” Hosty recalled.
The diagnosis turned out to be severe aortic stenosis. His father died of a similar condition when Hosty was 16, so it should have been diagnosed sooner, and the surgery should have been performed that summer. Fortunately, he had insurance that covered much of the $250,000 procedure cost.
But musicians don’t typically have disability insurance that covers them when they aren’t playing, so Hosty asked his doctor, “‘Do you think I can wait? The holidays are big.'” He worked right up until the surgery in January 2014 and then got back out playing gigs as soon as he could because, if he was not playing, he was not earning.
‘It’s revenue, but not necessarily income’
Back at Willie’s, Hosty’s merchandise sales totaled four CDs at $10 each, but no purchases of big-ticket T-shirts, beer koozies or stickers. There were also a few dollars dropped in the tip jar, maybe even a $20 bill and, of course, he got paid something for being there by the bar, which was packed.
“I sell the usual band merchandise like shirts, CDs and stickers, most of which is used to pay for expenses such as gas, oil changes, van-related payments, repairs and advertising,” he says. “So it’s revenue, but not necessarily income.”
After that night at Willie’s, he played his regular Sunday solo gig at The Deli in Norman, where he first started performing in 1990. This week, he’s in Norman and Tulsa, but in the coming month he’ll be in Kansas and Arkansas as well. In short, Hosty works all the time.
“It’s all about building your brand,” he said. “People like to support you. You give them the option of different things they can support you with. Not everybody wants a shirt. Not everybody wants a CD.
“When it gets bad and that drunk guy is yelling ‘Freebird’ at you, you have to remember that all he wants is just to have a good time.”