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Steely Dan’s Donald Fagen Just Doesn’t Get It (Unless He Does?)

0001Steely Dan's Donald Fagen was recently quoted griping about how he is no longer making enough money from his recorded music, and although it's hard to feel too badly for someone as financially successful as Fagen, his frustration does provide us with an interesting snapshot of music revenue overtime.


Guest post by William Paterson University Professor David Philp from Musicbiz 101

When a multi-millionaire complains that he’s not making enough money anymore, it’s hard to feel sorry for him.  When that multi-millionaire complains out of ignorance, it’s downright sad.  Click on the pick or headline just above this paragraph to read an article with Steely Dan’s Donald Fagen.  Fagen is upset that his income is taking a hit because his recorded music sales aren’t what they used to be.  He recently said this to the Wall Street Journal:

"When the bottom fell out of the record business a bunch of years ago, it deprived me of the luxury of earning a living from records. I don’t sell enough albums to cover the cost of recording them the way I like to. For me, touring is the only way to make a living."

What does he sound like to you?  A spoiled rich kid?  Let’s look at this from his perspective because, as Atticus Finch stated in To Kill A Mockingbird, “You never really understand a person until you consider things from his point of view … until you climb into his skin and walk around in it.”  

It’s very possible that Fagen is bad with money.  Just because he’s earned millions over his 40+-year career, that doesn’t mean he still has the money.  Maybe he’s made poor investments.  Maybe his business manager(s) stole it.  Maybe he’s overspent his money (read THIS RECENT ARTICLE about how Johnny Depp has spent way, way over his earnings).  Or, maybe he just doesn’t want to tour much anymore.  In January, 2018 he’ll turn 70 years old.  Not everybody can be Mick Jagger.


The point is, Fagen may be just like many DIY artists today and have a legitimate beef with his label and the industry as a whole.  Streaming is a business of portions-of-a-penny vs. “the old days” of royalty rates based upon either wholesale or retail priced CDs.  In 2000, when a person bought Steely Dan’s Aja for $12.99 (assuming it was considered a mid-priced catalog item and not a top level CD that was too popular to discount), and the band was earning a 15% royalty on retail (our working guess), the math would look like this:

   x 15%
$1.95 royalty per unit

Go ahead and subtract the packaging deduction, breakage fee, union fees, and other accounting logic of MCA/Universal (the band’s label) of, let’s say 30% of that royalty, and we can see that the group netted around $1.37 per unit.  If they sold 150,000 units per year, revenue would be around $205,500.  Subtract 20% for the band’s manager ($41,100), and maybe 5% for their attorney ($10,275), that would net $154,125.  Divide that by two, since Steely Dan is really Donald Fagen and Walter Brecker, and each member earned around $77,062.50 before taxes.  Not bad for an album released in 1977. (Note that we didn’t subtract any producer fees either.  Aja was produced by Gary Katz.)

Let’s compare this to today.

It takes 1,500 streams from an album to count as the equivalent of a single unit sale or full album download.  If you look HERE, you’ll see what the leading streaming services are paying out per stream.  Let’s try to compare apples to apples.  We said above that Aja sold 150,000 units of the album in 2000.  That would mean we’d need total streams from the album, or 225,000,000 streams (that’s 225 MILLION) to reach the equivalent of 150,000 CDs!  

Apple Music pays out $0.0064 per stream and Spotify pays out $0.0038 per stream.  Let’s just deal with these two top streaming services.

(Note #1: We’re not including YouTube streams in this calculation; we’re considering that different because most Steely Dan fans, I’ll argue, aren’t playing the full album on YouTube [it’s hard to find] and listening to commercials between songs [name one person you know who subscribes to YouTube Red]; I will argue more Steely Dan fans probably pay $10 per month to subscribe to a service like Spotify.  This is a whole other discussion, so let’s just stick with our estimates.)  

(Note #2:  We’re not going to break up the Spotify streaming rates between subscriber royalty rates and the free, ad-supported rates.  The rates are different; subscriber royalties are slightly higher.  This whole game we’re playing now is complicated enough.  Let’s just stick with one rate to see if Mr. Fagen has a point.)

Based upon the chart below from online statistics portal Statista, Spotify has around 60 million paid subscribers and Apple Music has 27 million paid subscribers.

If this was a two-horse race, that would give Spotify a 69% market share and Apple Music a 31% market share.  So, we’ll multiply 69% by 225,000,000 and get 155,250,000 streams on Spotify.  At $0.0038 per stream, this is $589,950 in gross revenue.  The balance, 31%, from Apple Music is 69,750,000 streams times $0.0064 per stream, or a gross of $446,400.

Total Gross Revenue: $589,950 + $446,400 = $1,036,350  

How is that money distributed?  

We believe, based upon our research, that approximately 30% remains with Spotify, so they keep $310,905.  We also believe that approximately 15% is paid to PROs and publishers.  That’s another $155,452.50.  Let’s put 5% aside for background musicians and the unions.  That’s $51,817.50.  Subtract those numbers from the $1,036,350 figure.

We’re now at $518,175 that, in theory, is going to the label.  Let’s be clear that the distributions made to the labels aren’t necessarily made according to this simplified formula.  In fact, we’ve been told that a label will receive revenue based upon a service’s total monthly revenue, total streams in a month on that service, and the label’s overall market share.  According to that theory, if a label doesn’t have a big hit-laden month, artists in their entire catalog may suffer reduced revenue (and the label too) because of the lower revenue distribution going from streaming service to label.

In our imaginary case with Steely Dan’s Aja, we’re stating the label is receiving $518,175.  The Encore article states the artist may receive 25% of that, which would bring $129,543.75 to Steely Dan’s account.  If we do our subtractions like above (20% for management, 5% for their attorney), the duo receive $97,157.81, or $48,578.91 each before taxes.  Now we can compare:

The Year 2000 =  $77,062.50 for Donald Fagen

The Year 2017 =  $48,578.91 for Donald Fagen

That’s a drop in revenue for Donald Fagen of $28,483.59.  Yeah, he’s making less today from recorded music sales.  

But consider this too: We stated Aja needed over 225 million streams today to equal the number of CD sales in 2000; the top 3 tracks off of the album, “Deacon Blues,” “Peg,” and “Black Cow,” have a combined 21,162,403 streams over the entire history of Spotify.  The album only has 7 tracks.  If the other 4 songs have a combined 20 million streams, we’re only at 41 million streams.  Spotify launched in the United States in 2011.  That means Aja, as an album, streams (again, just our educated guess) 6.8 million times per year.  That’s 3% of our 225 million streams above needed to equal the 150,000 approximate CD sales the album received in 2000.  Let’s do one more calculation:

3% x $48,578.91 = $1,457.37  

Donald Fagen is unhappy.

Our income level for Donald Fagen via streams is probably closer to the $1,457.37 than the $48,578.91.  In other words, he’s making way, way, way less today from recorded music sales than in 2000, or whatever year is in his head when he makes this comparison.  Most people can’t survive that kind of pay cut.  Fagen has a beef and, in this case, has a right to complain.  


Let’s look at the publishing side.  Back in 2000, the statutory rate per song was $0.0755 for a tune under 5 minutes. Five of Aja‘s seven songs are longer than 5 minutes, so each of those songs garners an additional $0.0145 cents per minute or fraction of a minute over the five-minute mark.  

Let’s be specific and see what the sale of one album would have generated, per song, back in 2000:

Black Cow – 9 cents
Aja – 11.9 cents
Deacon Blues – 10.45 cents
Peg – 7.55 cents
Home At Last – 9 cents
I Got The News – 9 cents
Josie – 7.55 cents

Aja generated 64.45 cents in mechanical royalties each time a CD was sold.  The band’s current publisher is the Universal Music Publishing Group.  For the sake of argument, let’s say UMPG was their publisher in 2000.  And let’s say the deal is an administration deal, meaning Brecker/Fagen get 100% of the writer side and, in this example, 75% of the publishing side.  Finally, let’s also agree that the Universal Music Group, which owns the master rights to Aja, didn’t make this a controlled composition situation and don’t only pay out 75% of the statutory rate.

Got that?  Okay.  Let’s do that math.

64.45 cents divided by 2 = 32.23 cents for the writer side and 32.23 cents for the publisher side

75% of the publishing side’s 32.23 cents = 24.17 cents

32.23 cents + 24.17 cents = 56.4 cents to Brecker/Fagen in songwriting royalties per album sold.  Remember to subtract 20% for the manager and 5% of the attorney from that number, which would be taking away 14.1 cents.  That would net Brecker/Fagen 42.3 cents per album sold (before taxes).  Divide that by 2 (since they share it all 50/50).

Walter and I have always done the 50/50 thing, no matter what was the actual origin of the song.”*  

*He said the above quote HERE.

Fagen at the 50/50 split would earn $0.2115, or 21.15 cents, in songwriting royalties off the sale of each copy of Aja.  That comes out to $31,725 in Donald Fagen publishing revenue based upon the sales of 150,000 copies of that album.

In 2017?  Well, we know those numbers will be different.   Look below.  Take a deep breath first.  It ain’t easy.


THIS ARTICLE helps explain what we’ve been saying about how streaming services pay.  While we’ve been looking at the “per stream” side of it, publishers and PROs look at the entire pool of money before breaking payments to artists (like we said above about labels), which are then based upon the number of plays in a month, or time period.  

In effect, we really can’t compare mechanicals from a CD sale to the mechanicals from a stream because we just don’t have enough information.  We can scour the internet for what artists have stated they’ve been paid (The Trichordist is good with this), but there are too many variables to compare one artist to another, including if the artist owns their publishing outright, like most DIY artists, and get paid through an aggregator like CD Baby or Tunecore.  Or if an artist is like Steely Dan, which most likely has an administration deal and is paid by a major publisher.  

Above, we stated approximately 15% of a stream’s revenue went to the PROs and publishers.  Looking at the graph above, it appears that the PROs probably earn about 25% of that 15%, leaving 75% of the 15% for the publishers.  Therefore, a typical Spotify stream of $0.0038 would generate $0.00057 for PROs and publishing.  75% of that would be $0.0004275 in mechanical royalties.  

Remember that we’re comparing 150,000 CD sales in the year 2000 to the equivalent in streams today.  If we needed 250 million streams to equal the 150,000, here’s our comparison:

The Year 2000

$0.2115 per CD sale for Fagen times 150,000 = $31,725 in songwriting royalties   

The Year 2017

$.0004275 times 250 million = $106,875  But…

Take 25% away from the $106,875 and you have $80,156.25.  Divide that by 2 and you have $40,078.13 for Fagen.  But…  

We know these guys aren’t getting close to streaming these songs 250 million times per year.  We calculated above that they’ve probably received approximately 6.8 million streams per year, or 3% of that 250 million number.  So let’s take Fagen’s $40,078.13 and multiply it by 3%.  He gets $1,202.34 per year.  BEFORE TAXES.

Look at this excerpt below from a 2013 Rolling Stone interview.  It says a lot about their catalog of tunes when it pertains to publishing:


Do you get a lot less publishing money than you did 10 years ago? 
Yeah, I’ll say!

Because of the collapse of the industry?
Yes. I mean, I need to tour to make a living. I get maybe eight percent of the royalty money I used to get.

Is that from 10 years ago, or the peak of Steely Dan?
From the peak, but less than 10 years ago, too. With the amount of free downloading the business is no longer a business, really.

Also, you have to understand that our songs are not covered very often. They’re very personal and, generally speaking, we came from a kind of ironic standpoint where pop singers really don’t do them. We don’t get that kind of coverage.


Donald Fagen Income Comparison Recap

Year 2000 Revenue (150,000 copies of Ajasold on CD)

  • $77,062.50 from recording royalties, based upon a 15% royalty rate and $12.99 retail
  • $31,725 from publishing

2017 Revenue (Based On Streams)

  • $1,457.37 from recording royalties 
  • $1,202.34

Don’t forget, this is all before paying taxes.

These new numbers are terrible.  Fagen has a right to complain. However, he isn’t going broke (again, assuming he’s no Johnny Depp).  There are more revenue streams for him than just from his record label and publishing company.  Take a look:

  • Ticket Sales
  • Merchandise Sales
  • PRO (performance rights organization) Income
  • SoundExchange Income (think Pandora and SiriusXM)

Income from these sources may be rising for him each year.  SoundExchange revenues rose 229% between 2010 and 2015 (although that may change for various complicated reasons; see HERE).  Lots of people have created Steely Dan channels on Pandora (that’s a large generalization, huh?).  And how many times do SiriusXM channels like ’70s On 7, Classic Rewind, or Classic Vinyl play Steely Dan tunes?  (Here’s a note for big and crazy music biz geeks: Steely Dan’s first album came out in 1972, so they don’t fall under any pre-1972 lawsuit settlements.)  There is income there that used to not be there, so that can replace some of the lost recorded music revenue.  

In terms of ticket sales and merch, one must think that he’s doing better there than 17 years ago.  

In North America, average ticket prices overall increased by 20% between 2010 and 2015. According to trade publication Pollstar’s end of year report in 2015, the price of tickets to live music hit an all-time high that year, with an average cost of $74.25.”

Available tickets for an August 8, 2017 show in Miami Beach range from $69.50 to $89.50.  Since Donald Fagen has some credibility as a live musician (millions of album sales, streams and tickets sold over the past 45 years), he has some say in what the ticket price is.  If you read THIS ARTICLE, you’ll see a quote from Dean Budnick, the co-author of great book (required reading for music biz geeks) Ticket Masters.  

[Artists] establish their deal terms with promoters, which then, in turn, inform the final ticket prices. In doing this, the artists, their managers, and agents certainly consider the entire ticketing landscape, including prices on the secondary market [second-hand retailers like StubHub], to land on a figure that they believe is fair.”

“Fair,” above, means “profitable.”  Fagen isn’t touring for free, even though he may feel like that’s the value today of his recorded music.  Fagen also earns a nice royalty from the sale of his merchandise, be that t-shirts, CDs, scarves, or any other item.  

Fagen has been making this argument for at least 4 years, that, if he didn’t tour, he couldn’t “make a living.”  That’s true.  If he didn’t tour, his income would be far less than in decades past.  But here’s the rub – This isn’t new.  We stated above that Spotify debuted in the U.S. in 2011.  And before that, there was the illegal Napster and peer-to-peer file sharing.  Threats to his recorded music income have reigned for 17 years.  At some point, you have to just shrug (unfortunately) and say, “What are you gonna do?”  It is what it is.  The industry is no longer built around revenue from that big label deal.  Instead, now more than ever, an artist needs to understand that their revenue needs to come from different sources.  

Is Fagen’s publisher actively selling Steely Dan songs (or his solo stuff) to agencies to exploit for synchronization purposes?  Can something from his solo The Nightfly album appear in a film?  Fagen wrote a book in 2013 called Emminent Hipsters.  Is he selling that at his merch table?  Is he and his team coming up with other creative ways to exploit his music?  Have they approached SiriusXM about a Steely Dan channel?  Think about the combined revenue from SoundExchange and ASCAP (the PRO I believe Fagen is signed to) that could rise incrementally.  The Eagles scored a big hit with a documentary, History of the Eagles, back in 2013.  Is there a compelling story about Steely Dan that could receive similar treatment?  

In summary, Fagen is right to complain.  His recorded revenue is way down compared to the past.  But the opportunities for future revenue remain as long as he and his management embrace today’s music industry models and focus on where the revenue is.  If he’s that serious about not earning enough to make a living, then there are ways he can make it up from the past.  An artist of his caliber can meet this challenge. 


Professor David Philp is Assistant Professor Music Management & Popular Music Studies at William Paterson University. He is the co-host of the only FREE advice college radio-based music & entertainment industry talk show in America, Music Biz 101 & More, which airs live most Wednesday nights and is available as a podcast HERE every night (days too).  Your favorite professor is also co-author (with Dr. Steve Marcone) of Managing Your Band – 6th Edition.  Reach him at or find him on LinkedIn HERE.

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  1. Of course we should be sympathetic of Mr. Fagen’s plight, as he earned his success. Steely Dan are among the most meticulous and perfectionistic of musicians and producers, hiring the best musicians and working on the albums until they have become standards for high fidelity listening (and thus are frequently the perfect choice to demonstrate or test stereo equipment).
    “At some point, you have to just shrug (unfortunately) and say, “What are you gonna do?” It is what it is. ”
    No, no, no. Why should we accept that? Piracy and devaluation of music should not be accepted.

  2. The key in Fagen’s statement is that the sales do not cover the cost of making the album “the way he likes to”. This writer goes into great detail of a point they missed. Maybe they are too young to know that mp3’s are junk, or not an audiophile, or do not understand that quality takes time.
    Fagen and Becker record music with everyone’s ears in mind. You wrote this article for yourself. Fortunately we have this benchmark in music to help calibrate our ears from the garbage that is allowed to hit the airwaves. The same cannot be said about the news media.

  3. So the prof agrees with Donald..Great..Then suggests he work harder than he (and Walter BECKER) already
    have to break even at best..I would prefer he get his perspective straight from
    The Dan before speculating..Good luck with that after having screwing up on Walter’s
    last name..Perfectionists hate that kind of crap..

  4. There’s far too many unknown factors in all this. The music industry at large has been hit early because it’s technology based. But all employment will be hit by bots & AI soon enough. I love SD but from the get go they were an aquired taste. Stones & Beatles eg were mainstream and money was made before streaming. Here’s a comparison that only sits well with either side of the equation but rarely with both. The perfectionism that’s the hallmark of SD musical creativity is also the hallmark of the top music business people. Rarely do both come together as one. When they do you have a Paul MacCartney or a Mick Jagger… Just saying

  5. I don’t buy Steely Dan/Donald Fagen (and Todd Rundgren) stuff anymore. After Fagen and Rundgren bashed President Trump, they bashed their demographic of fans above 60 years old, thus fans stopped buying their stuff and subsequent drop in revenue. As a supporter of President Trump, I will never buy a Steely Dan, et al. product again!

  6. PS-The demographic of those fans above 60 years of age that were more likely to vote for a conservative president like Donald Trump. It’s funny, but it appears the liberal Democrats are the ones wearing the tinfoil hats! But then again, it figures…

  7. To bad JR… if we held all of our favorite musicians to our own individual values and morals, we would be fans of no one… I pity you for that as well as you being a Trump supporter..which makes you either incredibly ignorant or knowingly okay with hate and prejudice.

  8. Late to the party, but wait a second. This analysis is all based on 1,500 streams being equivalent to one album sale? Who says? On what planet is that close to being realistic?
    If every album was listened to, on average, 1,500 times that would be the equivalent of six hour-long albums playing non-stop, 24/7 for an entire year. (I’m tired – check my math on that.) In 2,000 most music listeners bought more music than that, and listened for a lot fewer hours.
    Once you realize that that is completely made up, unfair equivalent – and we’re not “compar[ing] apples to apples” – the entire analysis becomes moot.
    I’m guessing that albums get listened to closer to 15 times each than 1,500. (You could get a more accurate number if you wanted to.) That changes the math dramatically.

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