“How do I make enough money as a musician so I can transition into a full-time music career?”
I imagine that’s the big question many aspiring and emerging independent artists wonder about.
After all, it’s believed by some that there’s no real money in music. After seeing the total music revenue in the U.S. dip in 2006, things have started to show growth again since 2015.
According to a 2018 report cited in Rolling Stones:
- U.S. listeners are spending more money on music than ever before: over $20 billion a year.
- Total music revenues have risen to about $43 billion a year, which includes on-demand streams, CD sales, radio play, live events, advertising.
There’s definitely money to be made from music, but unfortunately, most of that money isn’t going to the artists themselves. Artists only take home $5 billion, or about 12 percent of total music revenues. So what can you do about it?
As the music industry continues to adapt to changes in technology and waits for legislation to fairly compensate artists, it’s important for you to know how to make money in music.
In this blog, I will cover the top 13 income streams that are available for musicians. This is in no way a complete list, but it should cover all the major areas to help you structure your career based on different ways you can make money.
Non-Music Sources of Income
First off, I want to state that it’s not uncommon for musicians to do music on the side with a full-time career doing something totally unrelated. When you’re pursuing your dream or passion in a highly saturated industry, sometimes you’ll have to do whatever it takes to make it happen. Building a career in music, just like with building any business, requires money or capital. You need to fund your music expenses somehow so it’s normal to supplement the income from other sources.
A 2017 survey of 1,227 U.S. musicians, by the nonprofit Music Industry Research Association, in partnership with MusiCares and the Princeton University Survey Research Center, found that the median musician made about $35,000. However, only $21,300 was from music-related sources or roughly 60%. I imagine this is on the generous side, and a majority of independent musicians are making much less.
To survive as an independent artist, it’s fair to say that you will need multiple income streams, even if it’s not related to music. As much of a hindrance a day job can feel like, it could also be the only way to hopefully escape it.
1. Songwriting / Publishing Royalties
There are various payments you can earn from your music called royalties. The basic idea is that you generate money by licensing songs to companies or even individuals who want to use it on their platform or project.
For example, if you distribute your music to Spotify, you give them permission to obtain the necessary licenses needed to stream your song on-demand to a subscriber in exchange for small royalty payments each time it’s streamed for 30 seconds or more.
As you should know from reading my music royalties blog, there are two parts of a song that you can have copyright ownership over and generate royalties from – the musical composition (lyrics, melody) and the sound recording (explained in the next section).
For songwriters, composers, and lyricists, you have specific royalties that you can receive from the musical compositions you own.
You get mechanical royalties generated through the licensed reproduction of recordings of your songs — either physical or digital. Every time your song is streamed on-demand (like on Spotify or Apple Music) or digitally purchased as a download on iTunes or Google Play, you get money from owning the songwriting copyright of a song.
Another payment you can earn from your musical composition is a public performance royalty.
In order to collect this, you will need to register with a Performance Rights Organization (PRO) like ASCAP or BMI in the United States. They represent songwriters and publishers, collecting performance royalties when your music is played in public settings. This includes the TV, radio, retail businesses, clubs, bars, sports arenas and even music venues.
Public performance royalties can also be generated through digital performances from streaming, like Spotify (Interactive stream) and Pandora radio / XM satellite radio (Non-interactive stream).
You should also sign up with a publishing admin company to collect other related songwriting royalties on your behalf outside of the region your PRO covers.
If someone wanted to do a cover of a song you wrote, they would have to pay you, the songwriter, a royalty that is a standard rate set by the U.S. Copyright office.
In the United States, the statutory mechanical royalty rate for physical formats (CDs, cassettes, LPs) and permanent digital downloads (e.g. iTunes) is 9.1¢ for songs 5 minutes or less or 1.75¢ per minute or fraction thereof for songs over 5 minutes.
This type of licensing is called a compulsory cover license, which means the person doing a cover of your song has the right to and does not need your consent. To do so, they need to secure the proper mechanical licenses and compensate you, based on how they plan on distributing the cover song.
If an artist wanted to get the proper licenses to cover your song, they would go to one of these sites:
2. Sound Recording Royalties
Another income stream you can earn from licensing your music is from the sound recording as the performing artist. The sound recording, or master recording is the performance of the musical composition in the form of an audio recording. It is the actual sound file itself that you would use when uploading to your music distributor.
Owning your masters (sound recording) is a big deal in music because that’s the only way you are entitled to royalties generated when the sound recording is licensed. As an independent artist, chances are you will have copyright ownership of your sound recording, possibly splitting with a producer if you worked with one.
Here are some of the main royalties associated with the sound recording.
You have the mechanical royalties from the sound recording, which is typically money from streams or digital sales (digital distribution revenue).
The most common example is streaming, which as we all know does not pay well. 1,000 streams depending on platform generate roughly $4 to $6. It’s not a lot of money when you think people use to make over $9 of profit from selling a single CD for over $10.
You also have digital performance royalties from the sound recording through non-interactive streaming services like Pandora or satellite radio. SoundExchange is a service you need to sign up for to collect this specific royalty, at least in the United States.
The importance of knowing what these royalties are is that the more music you release, the more potential and opportunities you can earn in the long term. However, if you release a lot of music, these numbers can add up. If you do a proper job of promoting your releases, building your brand, growing an audience and expanding your catalog, it can payout in the future.
A good example that comes to mind is DJ.Fresh, a Bay Area hip hop DJ and producer who has built a massive catalog with his Tonite Show series since 2006. He’s also the one pictured in the middle for my blog cover up top, which I shot myself.
The beauty of building a catalog of songs is that it can continue to generate passive income in the long term. Not only can your songs generate royalties this way, but you also have the right as the copyright holder to exploit and license it to others. For instance, it can be used in video projects, which is discussed in the next section.
3. Synchronization Deals / Placements
As the copyright owner of both the musical composition and sound recording, you have the ability to license your songs in synchronization or sync deals. Synchronization is when you give someone permission to use your song and synchronize it to a moving picture (like a film, commercial, video game or TV show), usually in exchange for a one-time fee.
A music supervisor is often the one in charge of selecting music and obtaining the proper licenses for these types of projects. Getting a song placed in a film or video game can also be good for exposure.
You get paid a licensing fee when someone wants to use your song and place it into a visual medium. There are two licenses involved, one for the sound recording (master-use license) and one for the musical composition. As an independent artist, you most likely have ownership of both, which is a big advantage for getting a sync deal. If not, a music supervisor will need to get a license from both copyright holders to use.
4. Live Performances
In the report mentioned in the introduction, their survey found that the biggest source of income came from live performances. This makes sense because it’s a form of physical scarcity. You cannot replicate the live experience and social interaction of physically being somewhere compared to a video recording of a performance. Not even a live stream can do that. Live performances can be your typical music venue gig to perform at a private event or wedding as a performer or DJ.
As big and important of an income source live performances are for independent musicians, it’s not easy to come across paid gig opportunities when you’re not established yet. Even then, you often have to work your way up doing a bunch of crappy gigs that usually don’t even pay.
Part of the challenge is that performing live is a skill of its own. Not everyone has what it takes to be a good performer or entertainer. It’s not just about being the best singer, rapper or saxophone player. You need to have the complete package with things like stage presence, charisma, showmanship and audience participation.
However, once you’ve built a strong brand and reputation for captivating a crowd, then live performances can be a major source of income that can support your music career.
A big reason why is because it also provides an opportunity to sell merch, which is probably the second biggest income source independent musicians can earn. The fact that you have these two income streams often go hand in hand to making a living off music. For emerging artists, selling merch can be the bigger income stream than the gig itself.
Live performances aren’t for everyone because everyone’s goals, skill sets and life circumstances are different. You technically don’t need it but it is a big market and possible income stream. It can improve your chances of transitioning to a full-time career if you’re able to build your brand, grow a following and actually be really good at performing. If you’re still relatively new, I would still try to develop live performance skills as much as possible, but don’t solely depend on it for income.
10 Ways For Independent Artists To NOT Get Booked For Shows
Here’s a brief breakdown of each type of live performance you can explore and possible ways to get started.
Traditional Music Venue
When we think of musicians performing live, we often think about a local music venue or music hall, maybe even a restaurant or nightclub.
This is something that you usually work up towards by generating buzz after many years, or if you know the right people.
The big reason why it’s more challenging to get paid gigs for these types of opportunities is that venues, bookers and promoters need to sell tickets and draw a crowd. It’s not easy for someone who has not established a strong brand to get paid for live performances at bigger music venues. In some cases, you can pay to get on a bill or tour as an opener, but it may not always be the best investment.
Another avenue to get paid for performing live is Sofar Sounds. For those not familiar, they put together intimate live music shows all over the world at local businesses that apply to become hosts. The 3 live performance acts at each show are kept a surprise to the fans that get tickets for a particular date, but they can range from local talent to more established artists.
After receiving flak in the past, Sofar Sounds now pays the artists that perform. Not a lot, but it’s a start. Otherwise, Sofar Sounds a great way to get exposure in your local city and sell merch at these shows.
Private / Corporate Event Performances
Live performances can apply to do events like weddings, parties or home concerts. It may not be as fun as performing in front of a crowd at a music venue, but it can be an income stream and give you more experience.
Busking (Street Performing)
Busking is the less prestigious form of live performance where you’re just performing for tips on the street or public space. Although it seems like anyone can just set up and perform in any public space, check with your local area on any rules or regulations regarding busking first. Some places you might need permits or permission.
Another modern alternative is performing online through a live stream. Live streaming is easier than ever with tools like Facebook, Instagram and YouTube Live. You can set up virtual tip jars (usually a link to some site like PayPal).
You can also try an online venue platform like StageIt that allows you get to get paid for your livestream performances. Depending on how many virtual tickets you sell, you can make from 63% to 83% of ticket sales revenue. You can also chat with fans and they can give you tip donations throughout the live stream as well. Another option is Moment House.
The next level of livestreaming is where monetization (at least the ability to gift or tip the streamer live) is integrated into the broadcast. Popular platforms that have this ability include YouTube Live (through Super Chat), TikTok and Periscope (through their Super Broadcaster Program).
However, my favorite one is Twitch. Although it’s associated more with gaming, there is a community of musicians on the platform who can accept tips / donations from their livestreaming efforts. You can check out JVNA and HANA as examples.
5. Sponsorships / Brand Deals / Partnerships
Businesses are often looking for new ways to reach their target audiences and get exposure to people that may be interested in their products or services.
If you have built a large enough fan base, you may be an influencer that businesses want to work with through a brand deal. From their perspective, it’s called influencer marketing.
A brand deal is a way of monetizing your fanbase through partnerships with companies or big corporations in varying capacities. It could be a one time mention in a social media post or simple sponsorship. A sponsorship is when a company or business pays you to do something for them in return, such as helping raise brand awareness by displaying their logo at your event or show.
Brand deals can be a more long term campaign or endorsement deal where there’s a direct relationship of mutual support and you get paid and free products as the influencer.
As the name implies, you need to have a defined brand to work with others. If you’re anything like Snoop Dog or Willie Nelson, partnering up with cannabis companies is a no brainer.
Here are some examples of brand deals:
- Michael Jackson and Pepsi
- Run D.M.C. and Adidas
- Leon Bridges and Gap
- A$AP Rocky and Courvoisier Cognac
- Mike Phillips and Nike / Jordan Brand
It’s possible to pitch to different businesses too, but just keep in mind that it needs to make business sense. What’s in it for them? If you don’t have a decent following, then there’s really no incentive for them to work with you.
6. Session Musician / Work for Hire Commissions
Rather than using your skills and talents for your own music, you can play a supportive role for other artists and lend them as a session/studio musician.
This income source applies to songwriters, singers, rappers, DJs, instrumentalists, producers and sound engineers. Depending on how well you work with them and know their music, it could potentially open up other opportunities with artists. This can include playing in their live performance as a backup or full-time.
Another way you can lend your creative ability is to do work for hire jobs and commissions. This means that you are paid for your work, but you don’t have ownership of it because you’re being financially compensated through the job to create it. So if a company reaches out and pays you to write and record a song for them, they own the rights to the song. Or if a YouTube influencer wants to pay you to record a custom beat for one of their videos.
7. Merchandise (Merch)
I would argue that one of the most important income streams for musicians is selling merch. Largely, this is because you’re not dependent on someone else to get booked. If you have the money and fan base, you can sell it to them directly through an eCommerce site like Shopify or Squarespace. You can also take it a step further and set up a storefront to sell directly on Instagram.
When we talk about merch, it includes your typical physical products like t-shirts, hats, posters and stickers to things like USB drives, shot glasses and even pillows. Selling physical music is technically considered merch, which can still be viable. For example, vinyl is still in high demand. Making merch more collectable can help sell items faster and help build stronger brand loyalty.
I wouldn’t necessarily say it counts as an income source. Technically it is a source of income that musicians can use, but it’s just not always consistent and dependable.
Crowdfunding campaigns are where you leverage the funding power of many others to fund things, like the making of a new album, music video or tour, in exchange for specific rewards or perks. It’s an opportunity to get fans involved in your career by essentially funding a part of it and letting them see behind the scenes.
9. Membership Model (Patreon)
A newer model that has been emerging for musicians is creating a membership platform that fans pay a subscription to access exclusive content and perks. Patreon is one of the big pioneers in this realm, although there are other platforms and other ways to go about it. Although I don’t have any direct experience working on crowdfunding campaigns, I do with Patreon.
It is similar to crowdfunding, but on a continual, month-to-month basis. The idea is that fans pay a monthly subscription to get access to various perks and exclusive content that you normally couldn’t get anywhere else. This includes things like private live streams, behind the scenes content, unreleased music and even personal phone calls. It’s great for independent artists because it can bring in a consistent income for their art and time.
I currently work with an artist who has thrived on Patreon and has one of the top creators on the platform. On the flip side, I’ve worked with other artists who tried to move in the membership space and failed miserably. I’ve seen other established artists not doing well and abandoning it.
Unfortunately, it’s not a viable source for most musicians because you need to have built a large audience or fan base first. Patreon has no discovery features, meaning you can’t be searched for on their platform. Even then, it’s not easy to persuade and convince fans to join a membership page as I’ve experienced first hand.
10. Music Education / Music Lessons
A big area for musicians to earn an income is in music education. Teaching some aspect of music could be something you charge for lessons if you have the mastery and experience. Areas include singing, playing instruments, production, music theory, DJing, production, sound engineering, songwriting, music business or even music marketing.
Music education can also be done online, like the blog you’re currently reading right now. There are people who are able to build a following teaching some element of music and use that as a platform for their music career. Starting a blog or YouTube channel are common ways to go about it. You can even create an online course that you can license or sell through sites like SkillShare (Affiliate link disclosure) and Udemy.
11. Social Media Monetization / YouTube Partnership Program
Whenever YouTube displays ads on any video that contains your music, they pay a portion of that ad money to you as the copyrights owner. This is known as YouTube monetization, through its Content ID system. Even if the song is not on your channel, YouTube’s Content ID can identify your songs used in other videos so the money goes to you and the the people who uploaded the video with your music.
In 2017, YouTube’s payout rate in the U.S. was stated to be $3 per 1,000 streams, which is relatively lower than other streaming platforms.
Social media platforms like Facebook and Instagram can also pay out similarly when your music is used on their platforms. As far as I know, their music monetization systems are still developing and nowhere near the levels of YouTube monetization.
12. Stock Music and Sound Licensing
Stock music, or royalty-free music, is something video creators and live streamers are often in constant need of to sync with their videos. Although using a Drake or Taylor Swift song may be perfect for a video, it’s technically illegal (copyright infringement) under the Digital Millennium Copyright Act (DMCA) to sync it with a video without obtaining the proper licenses. This is where royalty-free music comes in.
Royalty-free means you can purchase a license with a time payment to use and not be obligated to make any future royalty payments for using it. This can also extend to certain sound effects, sound kits, sample packs, snippets and loops that other musicians and producers can use.
As a musician or producer, you can create music and sounds that can be sold in online marketplaces or directly to stock music libraries.
13. Selling Fan Interactions
Your time as a musician only becomes more valuable as your popularity increases with a larger fanbase. A way you can monetize your time as an artist is by offering specific fan interactions for sale like personalized video shouts, 1-on-1 Zoom calls or live autograph signings.
These types of fan video services were made popular by Cameo where people would often buy these personalized videos from celebrities, athletes, musicians and influencers as a gift.
Another competing platform is memmo.me but they just don’t have the talent or market share that Cameo does at the moment.
There are a lot of different income streams you can earn as an independent musician. What I covered was an overview of the more common income streams that are available to you, but there are also others. Figure out what your goals are and work towards building the foundations in the income streams that make the most sense for your circumstances.
Making money as a musician is great, but are you making smart investments with that money to grow your business towards a full-time music career?