Saturday, September 16, 2023

How Music Artists Make Money

Will I Get Paid Every Time Spotify Plays My Song


Whether you are an independent artist or one signed to a major label, you will certainly use many major streaming services to get your music out there for everybody to experience and enjoy. The biggest and most-used platform around today is inarguably Spotify.

The short answer to the question above is: yes. As long as the song is played for thirty seconds, Spotify counts it as a stream and a per stream royalty is added to your grand total, which will be paid out at a later time. Looking into how much an artist earns per stream is the key, as well see.

In recent years there has been an outcry from artists claiming they are not being paid enough by Spotify. Many musicians have argued that the music streaming giants payouts are simply not high enough. As of 2019, Spotify reported that it pays between $0.00331 and $0.00437 per stream. However, that amount still needs to be split among different people. For instance, the final payout Spotify delivers has to be divided among the artists record label , their publisher, and other entities such as the American Society of Composers, Authors, and Publishers .

Recently, Spotify increased its payout sum, but not by much. However, for artists signed to a label, this increase still needs to be split between different parties with a financial interest in the work .

What do you need to have ready before the masses begin streaming your music? We can help you figure that out!

Where Is The Money In Today’s Music World

Music has never been as omnipresent. And yet, like gold dust blowing all around us, its revenue streams have never been as dispersed, as invisible, or as tricky to grab hold of. How much is really out there? Where is it? Whos getting rich at your expense? And what kind of music market are the 2020s shaping into?

For the average working musician or music entrepreneur, its been the toughest decade in memory. With little to show for all this hypnotic new technology, most of us are struggling as hard today as we were ten years ago missing the simpler, more prosperous days of CDs, and seriously wondering if so-called modernity is actually regressing into a cultural dark age. If this is you and music is your livelihood, get ready for a change of outlook. The bigger picture now emerging across Europe, America and Asia is definitely brightening up. After almost twenty years of economic and existential crisis, the embattled giants of the music business are back on their feet and seeing green in all directions.

K-pop the South Korean music market is now ranked at number 6 among the top 10 music markets worldwide.

Vinyl HMV has just opened up a new flagship store in Birmingham, HMV Vault, with 25,000 records.

How To Get Paid In The Music Business

Making money in the music industry isn’t always as simple as negotiating a salary and waiting for your paycheck to come in. The pay structure of many music industry jobs is based on percentages for one-off deals and freelance-style work, but different music industry careers are paid in different ways.

For this reason, the music career you choose will have a big impact on how you make money in the music business. Here, you’ll find a look at how several common music industry jobs are paidbut remember, as always, that this information is general, and the deal you agree to will dictate your circumstances.

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Youtube And Twitch Tips And Ad Revenue

Once you get 1,000 YouTube subscribers and 400 watch hours, you can start to monetize your channel. Tips and ad revenue from your YouTube videos probably won’t pay a lot of money , but running ads on the videos you upload can add up and turn into a nice little revenue stream.

It’s easier to get monetized on Twitch, but there are some downsides. Twitch really only supports live streams, and sometimes there are issues with them muting videos or playing stock music over live performances out of concern for obtaining the rights to use that music. Still, fans might enjoy watching and playing video games with you.

Tips called Super Chats on YouTube and bits on Twitchcan only be obtained during live streams and video premieres, but there isnt a limit on how much people can donate. That means its a great way for fans to financially support their favorite artists. YouTube does take more of a cut from these tips than Twitch, so you may still want to consider promoting a Venmo or CashApp to viewers.

Use Spotify Analytics To Plan A Tour

How Music Artists Can Make Money With Live Streaming ...

Before you start loading up the van and hitting the road, you need to know that a successful tour involves many things: planning, promotion, and a strong strategy. Thankfully, booking a tour is becoming easier to pull off with the help of Spotify analytics. You can use this data like a roadmap, planning your route through the cities where you see your music being listened to.

If you look in your audience tab, you can see a breakdown of top countries and top cities.. Fans in São Paulo, Rio, and Fortaleza? Book a tour through Brazil. Lots of fans in France, Italy, and Spain? Looks like a European tour is in your future!

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Get On Streaming Playlists

Many streaming services offer playlists to users or algorithmic recommendations. Each service operates differently, so optimizing for specific streaming services may come with its own set of rules.

Since Apple Music and Spotify are the two most popular streaming services, they offer a higher degree of reach, so theyre the most important ones to optimize for.

How to get your music on Spotify playlists

Spotify has a suite of tools available to help artists optimize their profiles for the platform. Start by claiming your profile. From there, youll be eligible for Spotifys algorithmic playlists.

While theres no guarantee that youll show up in peoples feeds, over time, as more listeners subscribe and save your music, youll become more likely to be seen.

Spotifys algorithm evaluates your music based on your profile activity and its users activity on your profile.

Gig At Weddings Or Bar

Playing cover gigs at bars, weddings, and other private events is frowned upon by some musicians. You wont become a rockstar playing at weddings. But those shows can pay really well, and allow you to get paid to play your instrument. Theres no shame in that. And if you do well, word will spread and youll soon have a bonafide business on your hands. If youre still working on getting a regular following for your own music, this is a relatively reliable source of income that lets you play music. If you,re performing original composition, you can earn royalties from live performances. Whether you perform at a bar, restaurant, club, or other music venue, Performance Rights Organizations will pay royalties from those live performances.

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Make Money With Live Streams

During the lockdown from the pandemic, musicians turned to live streaming to perform for their fans. While traditional live shows and touring are coming back, online shows let you reach fans from around the world in areas that you might not be able to get to while touring.

Theyre also a great way to generate extra income by selling tickets to live streams and through online tip jars. Bandzoogle members generated nearly $400,000 from live stream ticket sales and tips just in the first 6 months of the pandemic.

And Getting That Music Played

How To Make Money As A Music Artist

Lets break that down by the most popular ways listeners actually contribute money to musics creators: When someone buys a song from iTunes, Google Play or any other digital store, money from that sale is paid out to creators via both copyrights composition and sound recording with the rates depending on label size, distributor size and specific negotiations between the two as well as any other middle parties involved.

The same dual-copyright payout essentially happens in the case of on-demand streaming, as well as when a song is played in businesses and retailers whether thats grocery stores, hospitals or in the background of a startups website. The specific percentage payouts within these deals depends on the type of service and the negotiating power of all the names involved.

Putting music in film and television and commercials, a.k.a. synchronization, involves a license negotiated between content producers and publishers/songwriters. A fee is paid upfront, and royalties are also paid once the particular film or television show has been distributed and broadcast. Sync licenses can be lucrative and, because most filmmakers generally choose music based on their own whims rather than whats at the top of the charts, also serve as a decent discovery platform for under-the-radar acts.

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Terrible Strategy #: Sign A Record Deal

Its the method I call, Beg a record company A& R guy to listen to your songs.

Believe it or not, this is still a popular method. Because musicians are conditioned to think that once you sign a record deal, all of your problems are solved.

Money flows like water.

No more struggle. Its all limousines, mansions, yachts, and fitness models.


Umm again, not so much.

Heres the reality. Record deals are, objectively speaking, some of the worst contracts on Planet Earth.

They are famously and horribly lopsided in favor of the record company.

Because the record companys job is to make as much money as it can from your music.

And that not-so-big advance payment they give you? Plus all the costs of making your album? That amounts to a loan.

You have to pay them back.

Out of your tiny little share of the royalties.

Its pretty easy to see how up to 85% of artists who sign a record deal end up owing money to their label.

And youd be surprised at some of the artists in this situation.

The band 30 Seconds to Mars comes to mind.

Their album A Beautiful Lie went platinum. They had an enormously successful tour.

Their record company made a killing on album and ticket sales.

But that apparently wasnt enough. At the end of the tour, EMI handed the band a bill for two million dollars.

You should be extremely upset.

By the time the record company deducts all the fees, royalties, and add-on expenses, most artists receive just two pennies out of every dollar their music earns.

How Spotify Collects Money & Distributes It To Artists

Spotify runs on membership fees, you sign up and pick an account type . This money goes into a kitty and, is then allocated to artists based on how many streams their music gets, minus Spotifys business costs both fixed and variable.

Now, a company the size of Spotify will generate A LOT of money over the course of a year. But growth in the tech space comes with plenty of costs you need staff, you need premises, you need developers, and you need marketing. And these things all cost money, of course Spotify is a business and it has all the usual business costs.

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Spotify is, however, in its simplest form a profit-sharing enterprise: all the profits it generates are shared via dividends with its artists either directly or to their respective labels and/or handlers. Where problems start, however, is that payouts for smaller artists are usually terrible like $5 a month for 2000 streams. And thats not going to pay the bills.

How much does Spotify pay per play? According to the most up to date information, Spotify pays anywhere between $0.006 to $0.0084 per playto the rights holder of the song. This money is sent to a bank account, usually the labels, and is then shared with management, the artist, and whoever else owns a slice of the pie.

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How Do Indie Musicians Make Money In This Digital Era

Theres been a whole lot of change within the music industry over the past 10 years its almost hard to keep up. With the addition of music streaming services and numerous distribution channels, artists have been able to market themselves without having to sign on to major labels, publishers, or management services. But where does this leave the artist in regards to tracking payments and royalties? With the establishment of all these beneficial digital services that enable artists to take their career into their own hands, just how do artists get paid?

For the majority of artists out there, live performances and touring are the main source of income. The honest truth is only about 0.000002% of musicians become successful, which means if youre not a superstar your ability to earn royalties from plays on streaming services is only going to garner pennies on the dollar. Moderately known artists could survive by playing shows and touring, however, with the pandemic crisis, most musicians are left trying to figure out how to monetize themselves to earn a living.

A few companies, like Bandcamp, understood that the situation was dire and the need to help artists survive was great. They started a monthly campaign that waived their revenue share and drove users to buy music and merchandise that directly benefited artists, with 100% proceeds being made available to payout instantly.

Touring And Teaching Are Big

Tips For Managing Your Money As A Music Artist

The Future of Music Coalition study featured 4,453 respondents in total, 74 percent of whom have 16+ years working in music. The biggest source of music-related income for artists working in rock, country, jazz, and all other genres which presumably includes pop, electronic, DJs, rappers, and other musicians who dont fit the other criteria is live performance.

Whats interesting about the Future of Music Coalition study is that most of the non-classical music respondents self-identified in the all other genres category. The study presents an average annual gross estimated music income breakdown for that group: 30 percent from live performance, 18 percent from teaching, 12 percent from salaried playing, 11 percent from composing, 10 percent from session work, 7.3 percent from sound recordings, and 1.9 percent from merchandise, with 9.5 percent for other.

It should be noted that only 33 percent of the musicians surveyed would be considered full-time musicians, making at least 75 percent of their income from music-related sources. Average direct income from music for all other genres artists in the 18 to 29-years-old-range was $18,400, while the average non-music income was $11,800, for a total gross average of $30,200. So, most musicians dont rely on a salary to get by.

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Make Money From Your Youtube Channel

If music is used in a YouTube video that is running ads, YouTube pays part of that ad money to the rights holder of the song. This includes videos on your own YouTube channel, as well as videos using your music that are not on your channel. Digital distributors can collect that money from YouTube for you.

Use Visual Content Like Music Videos

Music videos are always a great promotional tool for music. There are plenty of ways to go about creating video content but, for musicians specifically, there are a couple of things to keep in mind:

  • Start with a strong video idea. If youre envisioning your band playing in an empty warehouse, it might help to restart the brainstorming process.
  • Prioritize uniqueness over professionalism. Your video needs to grab attention. Working with a full professional production team can get expensive quickly and doesnt guarantee any social media views. A cheap but interesting music video is far more likely to go viral than an expensive boring one.
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    How Much Do Musicians Actually Earn

    How much do musicians actually earn? The shifting landscape of the music industry has made it hard to gauge exactly how much money working musicians in the modern age actually earn on average. Sure, some artists get big cash advances, fast cars, and fancy mansions, but there are also independent musicians and performers who are able to make a reasonable living from live shows and streaming income.

    The data doesnt lie: DIY artists make up a fast-growing sector of the music industry. According to a report by MIDIA Research, unsigned artists releasing music without the help of a label made up 6.3 percent of all Spotify streams in 2020 a dramatic 28 percent increase from 2019.

    Technology makes it easier to record, produce, and distribute music without the help of a record label. As streaming continues to grow in popularity, it seems like this DIY segment and the amount of money DIY artists can actually earn will grow as well.

    Back in 2011, Future of Music Coalition conducted an insightful study that compares the income of independent musicians across genres, age ranges, years of experience, and gender. This data is a bit out of date by now, but there are still insightful takeaways to be found by messing around with the sliders and looking at different categories.

    In summary, the average working musician earns $35,300 USD gross revenue annually from their music career, counting income from a variety of sources. So while that number sounds low, it isnt the whole picture.

    Revenue From Streaming Music

    How Music Artists (Actually) Make Good Money In 2020

    You should give your fans every opportunity to support your career. This includes having your music available to stream, which can also help other fans discover your music. And while streaming music payouts are measured in fractions of pennies per stream, they can add up to become a significant revenue source over time.

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