There are many ways to make money in the music industry. To date, I’ve made money from the music business in 21 different ways and counting (though I probably don’t represent the average artist since I’m into media creation and business).
But where do most artists earn the bulk of their income? What are they doing to build a financially sustainable career?
Though no two careers are exactly alike, there are basically eight income streams that most musicians rely on. Interested in finding out what they are? Let’s get into it.
Important: If you want to learn how these and other revenue stream in the music industry work, and want to learn and use them to earn from your music, you’ll want to enroll on our course The IMA Music Business Academy.
In it you’ll find 10 full modules dedicated to how you can earn in your music career. You’ll also get a certificate on completion, personal feedback by industry experts and more.
What Are The Major Revenue Streams Musicians Have?
An article from TorrentFreak indicates that the top eight revenue streams for musicians are (5,000 artists were surveyed):
- Touring, shows, or live performance fees. Live performance accounts for 28% of an average musician’s income, and is the largest piece of the pie. Based on how little music sales and streaming brings in for independent artists these days (more on that in a moment), it’s not surprising that ongoing touring and live engagements have the potential to bring in steady income.
- Teaching. Teaching accounts for 22% of an average musician’s income. I’ve done quite a bit of teaching myself, so this is somewhat expected. One of the tough things about teaching is that your earning potential is capped, at least in part, by the whims of the economy. The other factor is how much time you can dedicate to it.
- Salary as an employee of a symphony, band, or ensemble. Salary makes up 19% of an average musician’s income. There are, of course, many people that do not belong to the orchestra or a classical ensemble.
- Session musician earnings. Session playing makes up 10% of the overall pie. There can be good money in session playing, but getting steady gigs can be difficult.
- Other. I’d be curious to know what “other” means, but knowing musicians, it could be things like busking, tips from live streams, YouTube ad income, and so on. Other income represents 7% for the average musician.
- Songwriting/composing. At 6%, songwriting or composing is a small chunk of the whole. Songwriters and composers can also earn from sound recordings, however.
- Sound recordings. Recorded music (digital sales, streaming, etc.) only accounts for 6% of the graph. And I can’t imagine this number has gotten any larger in the four years since this study was published. Some studies also show top 1% of artists earn 77% of all recorded music income.
- Merchandise sales. Some artists say merch sales are integral to their success on the road. Yet, it only represents 2% of an average musician’s income.
The article on TorrentFreak was originally published in 2013, and was also based on a study from 2013.
Are These The Only Income Streams Available For Musicians?
In a word, no. Future of Music Coalition, for instance, has identified 42 revenue streams. The challenge is that these 42 sources would not apply to all artists. For example, you’re not going to get a record label advance, support or settlement unless you are, or at one time were, a signed artist. Not all musicians will win grants, nor will all generate ad revenue from blogging or YouTube videos.
To complicate matters, to pursue all 42 wouldn’t be the best use of your time. Even if you somehow managed to get these 42 streams working for you, it would be a juggling act at best, and the money earned from each likely wouldn’t be substantial. Not the best way to make money in the music industry.
The best strategy isn’t to pursue everything at once, but rather to group similar strategies together, cross-sell, upsell, and earn more from the things you’re already doing.
Let’s look at what that would look like in practical terms.
What Can I Do To Diversify?
If you have a blog, you could add a PayPal “tip jar” to your site and ask for donations. You could also earn from ads and commissions on affiliate products.
If you have an email list, you could start a fan club and encourage your fans to pay for their membership. This could potentially add to your workload, however, because you would have to give people a reason to keep coming back.
If you’re making YouTube videos, you could join their Partner Program after you’ve built up your following and encourage your subscribers to micro-fund you on an ongoing basis on Patreon. You could also join Audible’s sponsorship program.
If you’re touring or playing live shows, you could also live stream them on Concert Window (or another site like it) and earn tips for your performance separate from a guarantee or ticket sales.
Just remember that keeping all these balls in the air isn’t easy, and that’s what it takes to get regular income coming from them. Before diversifying, get one or two consistent and steady streams of income working for you. The biggest mistake you can make is branching out too soon, too fast.
What Does Success Look Like?
The studies and numbers cited here aren’t exactly encouraging. But even as we’re talking about money, there’s one important thing you must keep in mind – your goals.
Is your goal to be signed to a label? Would you like to be making a living doing what you love to do? Would you prefer to keep music a hobby? Are you more interested in helping people, supporting charities, and making an impact on the world?
Success looks different for everyone, so you must define what that means to you. You must think about what level you would be satisfied with, because working for money will only get you so far. There are much better ways to make money than to become a musician.
The problem is not that there aren’t enough ways to earn an income. The problem is that many artists are unwilling to try their hand at different strategies, or simply don’t have the self-image to believe they could be earning more.
Your confidence level affects your income. The more you believe in yourself, the more you will realistically earn. But your self-image doesn’t improve in a vacuum. You must take proactive steps to study, get out of your comfort zone, and tap into skills you didn’t even know you had.
Update: If you’re a rapper, we’ve now also got a guide showing how rappers make money. So you’ll likely want to check that out too. 🙂