As a young artist, musician, singer, producer, songwriter – the great expanse that is the music industry seems to be a daunting turbulent landscape of the unknown. Some believe a career in music too good to be true, some are too afraid to try and some give it a shot but give up before they see the fruits of their labour, leaving a very small percentage to see it through. For many that wander out into the abyss with mere ambition to drive them, clinging onto the hope of achieving their “big break” (i.e. big pay day) they’re left disappointed that it never comes, as they’re ill prepared and ill equipped. A few years down the line of doing the “music thing” and with their parental loan coffers dried up, they let go of their dreams and enter the corporate world only to have sold out their time and passion for a comfortable salary and a convenient retirement annuity. At dinner parties they’ll reminisce about the good old days when life was simpler and curse their luck that they never “made it”. This story of “shattered” dreams is as common as the sun rising but in reality, it needn’t be if artists equip themselves with the knowledge they need to bring in enough money to live the dream they claim to so badly want.
The truth is there are many revenue streams you are able to capatilise on in order to make a comfortable living as an artist. Will you be rich beyond your wildest dreams? I don’t believe anyone can give you advice on how to do that, but these income sources will afford you an opportunity to wake up everyday and do what you love. With the right amount of insight and knowledge, a little talent and the hunger to succeed, the world of the 9 to 5 will be a universe away. So the big question is : Where does the money come from?
For the purpose of this piece, let’s assume you are an artist that writes all your own songs, performs all the instruments (synthesizers & drum machines included), and is actually the artist releasing the songs (i.e. not a producer for another artist). Let’s also assume, for arguments sake, that you are signed to a record label as an artist with a “standard” artist agreement in place and that you are signed to a publishing company.
The Long and Short of it
An artist’s income can be divided into 2 segments : what they are paid in the short term i.e. once off payments, and the long term i.e. recurring payments. In the current music industry climate it’s more than likely that artists make the bulk of their income in the short term in the form of live performance income & neighbouring rights income, as opposed to the royalties they earn and receive from sales, streams etc.
By definition a royalty is “compensation or a portion of the proceeds paid to a rights owner for the use of it” but what are the different rights in your song and who owns them? Everytime a piece of music is written and recorded there are in essence 2 copyrights created (in some countries when there are lyrics added to this, there are in fact 3 but for the sake of simplicity let’s stick to 2), the copyright in the composition of work and the copyright in the recording. As you are the artist that has written, performed and recorded the song yourself, you own both of these copyrights and are then paid a royalty for the usage of it.
As the songwriter, everytime your song is transmitted (both digitally & physically), performed publicly or synchronised (put to an advertisement or other visual work, i.e. TV show, Movie etc) you are owed a royalty. The job of collecting these royalties is extremely time consuming so it’s far better to have a publisher to handle the admin of this for you but should you still wish to do it yourself, I’ve included links to join the relevant collection societites below.
For the sake of keeping things simple, a mechanical royalty is due to a songwriter everytime their song is “copied”. For instance when a record label presses a CD, when a song is downloaded from a digital store or streamed from a streaming platform, there is a royalty due to you. Typically labels and retailers will have to attain mechanical licenses from the relevant collection society. CAPASSO (Composers, Authors and Publishers Association) are responsible for issuing these licenses and collecting and paying their members.
To become a member of CAPASSO click here.
Everytime a musical work is performed publicly, whether on radio or TV, in concert or via the internet, a performance royalty is earned. As with mechanical royalties, a collection society will issue licenses to users & broadcasters in order to allow them to perform the works publicly. SAMRO (Southern African Music Rights Organisation) are responsible for issuing these licenses and collecting and paying their members.
To become a member of SAMRO click here.
(Artists and musicians who perform on the sound recording itself are also entitled to a royalty when the piece is performed publicly, this is called Needletime.)
When a piece of music is ‘synchronised’ to film or video, a fee is payable to the songwriter. This fee is negotiated by your publisher for the usage which is usually granted for a fixed term and states where the usage will occur i.e. TV, online etc. This ‘synch’ also entitles the master owner of the song to collect a fee for the usage which is usually negotiated in conjunction with the publisher. This is referred to as “Neighbouring rights” and falls under the next section “The artist’s income”.
The name and face of the product – the Artists are the ones we idolise with posters on our walls, tattoos on our skin and T-shirts in our cupboards. They are the people we pay large amounts of money to stand out in the cold and rain to hear sing our favourite songs. Unlike the songwriters, engineers and producers who work tirelessly behind the scenes, the artists are on the frontlines trying to turn us into fans.
A lot of artists come into the music industry lusting after the ‘big record deal’ that they believe will allow them to hit the big time and make them truck loads of money. Signing bonuses and advances are extremely uncommon in the current industry so your “truck loads of money” are going to come from the royalties you earn on the sales and streams of your music. The amount you receive per sale / stream will vary according to your royalty rate in your artist agreement with your label as well as the service, iTunes / Apple Music / YouTube etc. Depending on the label, these royalties may only get paid every year, 6 months or 3 months, so it’s beneficial to have a regular source of income, and that’s where your short term revenue streams come in.
Once off payments for an artist’s services like performance fees, production fees, endorsements, merchandising etc. are an artist’s bread and butter. I like to think of it as these once-off fees are what artists pay their bills with (since record advances are a thing of the past for new artists as stated above) and income generated from royalties are what they should save and invest (not spend on “bling”).
Gigs & Touring
It is vital in the modern day music industry for an artist to have a healthy live & touring schedule, both as a marketing tool to promote themselves and their music, as well as to earn a regular (although not stable) income. As stated above, royalties are paid out sporadically by labels and publishers so it’s crucial that artists have money coming in regularly. With the decline in revenue generated by record sales in the music industry over the past decade, live concerts and events have become the powerhouse driving the music “economy”. Although the recent surge in streaming income has provided a glimmer of hope for labels, artists are yet to feel the uplift and are still focused on tours and shows.
“It used to be that you toured to help sell the record, Now the record helps support the tour.” – Ray Waddell
As is the case with the artist royalty, occassionally, producers are paid a royalty on sales and streams of records they have produced. It is more common however for producers to receive an upfront fee for their services or in fact, to receive both a fee and a percentage of sales.
Not something unique to the music industry, artists are often paid to endorse certain products whether music related or not, as they are seen as idols to many. Artists will very often have an audience across their social media platforms which leads brands to approach them to post about a product in exchange for a fee or a trade exchange for the product.
Whether it’s selling handmade t-shirts out of the boot of your car after a gig or having an entire product range at H&M, merchandising has long been a revenue stream artists have embraced to earn some extra money.
There are many ways for artists to sustain themselves in the music business without having to rely on their “big break”. All that it takes is knowledge and hustle.