Music And Money

Music is a business, which means that ultimately, no matter how much you wish it wouldn't be, it all comes down to the money.

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Music is a business, which means that ultimately, no matter how much you wish it wouldn't be, it all comes down to the money. Yes, it may bastardize pure art, but that hasn't stopped record companies before and it won't in the future. You've got to be proactive about what you want to do with your band if you want to avoid being taken advantage of in the future.

Record sales are the least of your concerns. This may be the category that everyone pays attention to, the one that gets you press and lands you magazine covers, but as a musician you aren't going to receive much in the way of profits on record sales. If you can land with a major album, you'll keep about 7% of the total sales of your album, which usually translates to about a dollar an album for unproven bands. Indies tend to be a little more generous, letting you keep anywhere from 15-40%, but their limited promotional reach usually translates into significantly lower album sales. So even if you manage to sell a million albums through a major label (that's quite a feat!) then you're making less than a million dollars, because any promotion the record company does for you and any advance is going to come straight from your cut of the sales. That's simply the way the music industry is set up; record companies take big risks in signing artists and take a huge cut of any successes that they have. They do the dirty work to get your album to radio stations and run ad campaigns, which set you up nicely for the real moneymakers.

Touring and live shows are going to be your bread and butter as an artist. Emerging artists tend to make around 10% of the gate charges. This number can balloon to 60% for legendary acts like the Rolling Stones on their last tour they generated $437 million in ticket sales, of which around $262 million went to the band. This doesn't even include band and tour merchandise available, a number that averages 10% of the gross ticket sales.

The other big ticket item as an artist comes from royalties and licensing. Every time a radio station or bar plays your song, you've got a three-cent royalty. Put your song on rhapsody or other streaming sites and you'll grab a one-cent royalty per song. Sell your song on iTunes and you'll earn ten to twenty cents (more if you aren't selling through a label). If a movie or television show uses any of your songs, you earn a negotiable licensing fee. Michael Jackson would charge $500,000 for the use of any Beatles song in a movie. Let an outside company put your name and/or image on their product and take a cut of sales. KISS is the industry standard with its $1 billion/year licensing business.

That's a lot of numbers. How does this pertain to survival in the business of music? Simply, this means that your album sales are far from the most important thing. Album sales generally receive the greatest amount of publicity, but generate the smallest percentage of cash flow for the artist. Album and single sales have their greatest effect as a means of promotion, not as a means of revenue.

You're primarily an artist so I doubt that that conclusion reverberated within your mind. Let's break it down like so: albums and singles are simply promotional tools. Don't be bound by traditional thoughts about albums. It may be well worth it as a band to give away albums or release a single that has nothing to do with any album that you've got in the works. In today's music industry, the album is no longer the focus. The focus needs to be on you, what you offer to the consumer as a band.

To the consumer your band isn't an album. To the consumer your band is an emotion. The consumer buys your album because they feel love, because they feel aggression, sadness, or like some badass roaring through the desert in a convertible packing a 9mm and aviators. Your job is to deliver that promise, and an album is only a part of the picture. Your job is to let them feel that emotion whenever they wear a t-shirt with your band on it, or whenever they see your picture. This is something you can do by making sure that everything non-recorded fits together. Deliver the emotion you promised on an album in a live performance, show that emotion in your merchandise. Your album is like a one-night stand in Vegas, but the other aspects are what form a lasting relationship between you and your fans when you've got to live with each other, warts and all. Don't let a rigid focus on albums hold you back from a career as a musician. Don't try to sell albums; try to sell your band.

By Ben Heere, Dotted Music

25 comments sorted by best / new / date

    theway1966
    Your article makes sense. Helps me understand a band like KISS. In the beginning, they were putting alot of albums out in a short time. By 1980, 6 years after the release of KISS, they had 15 albums out. Including 2 live albums, 4 solo albums, and a greatest hits album. They were trying to get recognized. Now they've reached legendary status and no longer need to put out albums to get recognized. Everybody knows who they are
    Andragon
    All the people who talk shit bout this article obviously haven't been in contact with actual (successful) bands. The article is as true as they come; crucial points were well presented.
    foo_diddles
    Nice read, as a few have said: you have to make money. I know most of us dream of playing Wembley Stadium, and you need, if nothing else to pay for your equipment, your crew, transportation, food, and what about your home life? money is not evil, greed is what wrecked the industry. money is just a means to an end.
    theAccursed
    Interesting article. However, I do have one criticism and that is; the ad in the sidebar! I feel uncomfortable reading these articles at work when there are bare-chested teenagers appearing in every advert in the sidebar lately.
    Cold Reader
    yenners wrote: There is no longer any money in music. Professional musicians often work for peanuts, like the court jesters of old.
    Not sure where you're pulling that from, there are loads of ways to make money in the music industry, session players can be paid gratuitous amounts if they know what to look out for in contracts, composers get paid about 4-8 per bar of music, one piece of music that is 230 bars long, sorted, even down to doing local stuff, usually about 120 max for a full band in a pub which isn't a great deal when you split it, but if you get regular spots or do more than one venue a week it'll all add up. There's also synchronization to moving picture, like adverts, tens of thousands are spent on about 20 seconds of music. Joining PRS is a huge help to any band who are starting to get attention, they pay about 40(ish) in royalties per 4 min song, the amount changes according to duration but if you have a meaty set list then you can expect a meaty royalty. Publishers get 50% of everything the songwriter gets because they are really good at getting peoples songs used, creating a royalty for the band and himself. There are more like music councillor, music therapist and others like that as well. There are so many ways in which to make money out of the industry. I'm not by any means saying they're all good ways, but they are methods in getting money.
    ninjafingers
    MrReMo wrote: "Dont try to sell albums; try to sell your band. " That's the end of the article, this mean, the end of the idea, the conclusion. The summum bonum. Sell, money, buy, albums, numbers, consumers (???), merchandise, royalties, lisences and tickets means nothing (I mean, zero) when what you are trying to offer is BULL SHIT. And why do I think there is bull shit in music nowedays? Because of the message of this article: money. Yes, of course this article will "point the bands in the right direction" because it's what everyone does, and what is most important, IT'S SAFE. You only have to be a puppet, a marionette, a music cyborg controlled to obey and perform in the way that they want. There are better cyborgs who can get to the top, there are some who have flaws and will be discarded. And this, this whole mechanism is oiled by MTV & Co., making the human being into a music numb piece of plastic. I don't want to be offensive, sorry if it seems to.
    I understand what you're saying, and agree with you on a lot of levels. But, it's just a fact of life that if you're going to make a living as a musician, you HAVE TO MAKE MONEY WITH YOUR MUSIC. I agree that if your sole purpose for playing music is to make money, the music can become quite sterile and "plastic" (just look at the majority of stuff on the radio these days). However, if you're making the music YOU want to, I don't see anything wrong with making money off of it. It stands to reason that if you're going to be making money off of it, you might as well do it in the most effective and efficient manner possible, so you have more time for playing music!
    Senzafine
    Great article on how to help your band succeed in the vicious world of the music industry. It is sad that money and greed have devastated such a beautiful thing but as long as we who do make music love doing it there will always be something good coming out of it all. When making music becomes an issue of getting rich, that's when I feel music for that person has lost it's purpose.
    yenners
    There is no longer any money in music. Professional musicians often work for peanuts, like the court jesters of old. The only money in the music industry comes from fame... What a shallow society we have become where people fail to appreciate art, and instead are blinded by image.
    MrReMo
    "Dont try to sell albums; try to sell your band. " That's the end of the article, this mean, the end of the idea, the conclusion. The summum bonum. Sell, money, buy, albums, numbers, consumers (???), merchandise, royalties, lisences and tickets means nothing (I mean, zero) when what you are trying to offer is BULL SHIT. And why do I think there is bull shit in music nowedays? Because of the message of this article: money. Yes, of course this article will "point the bands in the right direction" because it's what everyone does, and what is most important, IT'S SAFE. You only have to be a puppet, a marionette, a music cyborg controlled to obey and perform in the way that they want. There are better cyborgs who can get to the top, there are some who have flaws and will be discarded. And this, this whole mechanism is oiled by MTV & Co., making the human being into a music numb piece of plastic. I don't want to be offensive, sorry if it seems to.
    One Of My Turns
    eliterun wrote: inlovewithmusic wrote: hmmm...interesting article ...but im a lil bit confused ...if album sales are not that important ....and the major is generated by live shows and by royalties. Why does the music industry keep claiming that they are at a loss these days because of illegal downloading and other means of piracy ?. Or are they not really losing that much money and are just making up the shit ? Record companies care so much about album sales because that's where they earn most of their profits. Sales for the music industry as a whole actually went up in 2008, but because record companies are the most powerful companies in the industry, all we hear is "blah blah blah falling record sales".
    so, to clarify a little further if anyone needs it, record companies are complaining because downloaded music affects THEIR cut of the profits. record sales are the ONLY income that the record company has, unlike the band, who can earn money doing live gigs and merchandising, as the article states. the band will also suffer slightly when people download instead of buying, but given the percentage a band actually earns off their album sales compared to the record label...
    SkepsisMetal
    inlovewithmusic wrote: hmmm...interesting article ...but im a lil bit confused ...if album sales are not that important ....and the major is generated by live shows and by royalties. Why does the music industry keep claiming that they are at a loss these days because of illegal downloading and other means of piracy ?. Or are they not really losing that much money and are just making up the shit ?
    Because the money made from record sales goes primarily to them, not you, so they worry about losses.
    KevinGuitarGod
    nice man, loved it, my bands about to record a full length, and about to play at warped, and also looking around to getting signed, this helps a lot bro! :]
    eliterun
    inlovewithmusic wrote: hmmm...interesting article ...but im a lil bit confused ...if album sales are not that important ....and the major is generated by live shows and by royalties. Why does the music industry keep claiming that they are at a loss these days because of illegal downloading and other means of piracy ?. Or are they not really losing that much money and are just making up the shit ?
    Record companies care so much about album sales because that's where they earn most of their profits. Sales for the music industry as a whole actually went up in 2008, but because record companies are the most powerful companies in the industry, all we hear is "blah blah blah falling record sales".
    inlovewithmusic
    hmmm...interesting article ...but im a lil bit confused ...if album sales are not that important ....and the major is generated by live shows and by royalties. Why does the music industry keep claiming that they are at a loss these days because of illegal downloading and other means of piracy ?. Or are they not really losing that much money and are just making up the shit ?
    CommBreakDown
    catrolean wrote: Very good stuff. Although it doesn't help very much outright, it does get people's heads in the right place, and point them in the right direction.
    +2
    catrolean
    Very good stuff. Although it doesn't help very much outright, it does get people's heads in the right place, and point them in the right direction.
    theway1966
    To add to my comment. I have since started listening to Christian Rock. (No longer listen to KISS, etc) Take a band like Stryper, 25 years after their career started (which should make them legends on the same level as KISS), they still have full time jobs when they're not recording or touring. It is real sad that the Christian Rock music industry doesn't get the same recognition and promotion as their secular counterparts. They are every bit as good as any secular musician. Stryper is an example that being in the music industry does not mean you make a lot of money.