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How do artists make money today?

The internet has changed everything and put bands in closer contact with their fans than ever before, but where is the money? The music industry is worth billions of dollars, but musicians are struggling harder than ever to find an income to sustain themselves.

Only a few years ago, bands and artists made the majority of their income from CD sales, where fans would pay up to $15 for a copy of a CD, and whilst the musician only ever got $1-3 from each sale on a normal contract, if you sold a million records that was still a lot of money! CD sales collapsed with the advent of the internet and the rise of digital formats like MP3 and AAC, with people choosing to download their music from places like iTunes rather than go to a record shop to grab a copy, but most artists were still earning roughly the same amount per album or single sale as before (We’ll ignore the fact that record companies and download stores were cleaning up here as the cost of offering a download technologically is <$0.01, whilst producing and shipping CDs does cost money).

Now, however, even the idea of owning music is going away, with people increasingly choosing to “rent” and stream their music rather than actually pay for individual songs or albums. The convenience is great, but while Spotify, YouTube, and Apple Music have all built billion dollar businesses on the back of music, they all pay a pittance to the musicians that underpin them. The system is broken.

With record sales no longer offering the sort of riches found by previous generations, musicians are having to be ever more inventive about ways to make money. Some of these options give musicians an ever-closer relationship with their fans, with Bandcamp offering to skip the record company middle-man, and Patreon letting fans become patrons that pay a monthly subscription direct to their favourite bands – whether they are producing new content or not. These digital companies are providing the sort of services the early internet promised, and some artists are doing quite well from them, but not everyone has such dedicated fans.

Others musicians are looking to sync deals with everything from television adverts to videos games, with every market offering potential new licensing opportunities. The increasingly globalised world means that it doesn’t matter if the sync deal is with an ad for food brands in Singapore or betting sites in Australia, money is money and the more artists can eek out of each recording the better for their bottom line. And arguably even more importantly, each time someone hears their song they have a potential new fan – sync deals in big films and influential ads can create massive fanbases for bands that wouldn’t generally trouble the top 40.

Live shows and merchandise are still good earners for musicians, but the money only really starts to come in once your fanbase reaches a certain threshold and you can start to sell-out larger venues. For bands on the up, it has become depressingly common for bands to be paid as little as $50 for a performance or even sometimes nothing at all. The chances of making it big are already stacked against new musicians, who these days have to compete for ears against not only other new music, but also all the music taht came before – it’s like playing at online casinos, except with worse odds.

It’s never been easy for musicians to “break” and earn their keep, but while the internet had so music promise, it has so far made it just a little bit harder.

Photograph by Stocksnap

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