How Do Modern Musicians Earn Their Money?

Making money as a musician isn’t easy. There’s a lot of competition out there. And there are a lot of people out there who want a slice of the pie. On top of this, the way the industry works is constantly changing – with new platforms and consumption methods constantly being introduced. 

Some musicians find it too hard to make a living. However, others are able to make a good income by exploring all the different income streams. This post delves more into exactly how to make money as a musician in 2023. 

Who do musicians have to share their money with?

The money you make as a musician often has to be shared with other parties within the music industry. For example, if you play live at a venue, the money you make from any ticket sales often has to be shared with the venue operators and any stage crew that you bring along. 

Sharing rights get more complex when it comes to involving publishers and record labels. While a record label typically won’t make any money from live shows, royalties from physical sales of albums or digital downloads will be split with the record label. There are many different types of royalties and these each get distributed to different people. These music business basics offer an overview of where these royalties come from and where they are distributed.

There are ways in which you can avoid sharing your money with anyone, but this often means doing all your own marketing and finding venues that don’t ask for a cut in ticket sales. You’ll need to be prepared to do more work yourself as a result.

What are the different income streams for musicians?

Musicians can generate an income from various different sources. The most common income streams are listed below.

Live performances

This is the most traditional way that musicians make money – and the way in which most musicians still make the bulk of their money.

At dedicated venues, each member of the audience typically buys a ticket to enter, and the money made from these ticket sales is shared between you and the venue. In other cases, a venue may pay you upfront – this is usually an hourly fee that you get to decide. 

While playing live can make you a lot of money, you need to factor in the expenses such as getting all the right equipment and getting this equipment to the venue. Going on tour can be particularly expensive because of travel and accommodation costs. It’s worth playing locally first and then touring once you’ve built up some recognition so that you can guarantee enough ticket sales to cover your tour. 

Physical music sales and merchandise

Selling CDs, vinyl and cassettes can be another way to make money. While not as big an earner as it once was, many musicians still find that there is a demand for physical releases. Merchandise (such as clothing or posters) can also make musicians money and is often sold online or at gigs alongside CDs and vinyl.

Consider the cost of producing this physical music and merch before you commit – you may want to start by manufacturing only a few items. Record labels can help you market physical music, but will take a big cut of the revenue. 

Digital downloads

For a while in the early 2010s, musicians were earning more from digital downloads than they were for physical releases. But more recently CDs and vinyl have taken over again. That said, digital downloads are still a source of revenue to explore.

Publishing a song on a platform like iTunes costs much less than manufacturing CDs or vinyl. You can use music publishing tools like TuneCore to upload your music to a range of online stores.

On-demand streams

More music is consumed through streams nowadays than it is through downloads and physical sales. Most platforms like Spotify are also free to upload music onto. Therefore, it makes sense to upload your music onto streaming services.

That said, you won’t make a lot of money per stream. Spotify currently pays artists about $0.004 per stream. Therefore, you have to get about 250 streams to earn $1. Unless you can get lots of people streaming your songs, you won’t make a lot of money from these streaming services.

Radio plays

It’s possible for musicians to make money through radio plays. Terrestrial and online radio stations must pay a licensing fee to a royalty collection organization. Money from this licensing fee is then shared among all the songwriters and publishers involved in every song played on that radio station. 

Major radio stations pay a bigger license fee and therefore artists get paid more per play. By doing some radio plugging, you can try to get your song featured on radio stations and hopefully generate some money.

Film/TV placements

You are also paid royalties every time your music is used in a movie, TV show or other form of entertainment. Royalties can also come from music used in TV advertising. Such royalties can be paid by view or as a contracted fee. 

Publishers can help you to find these licensing opportunities for you. This guide explains more as to how royalties from film/TV placements work

Public building plays

Restaurants, bars, nightclubs and stores all have to pay music licenses to play music. Royalties are then collected from these licenses which go towards artists whose music gets played.

Submitting your music to in-store radio stations and commercial music streaming platforms can help you to obtain these royalties. 

YouTube videos

You can also get royalties from Youtube videos containing your music, which are raised through ad revenue. This could include music videos or videos published by other people using your music (such as video adverts or videos from other content creators using your music as background music).

As with streaming, videos containing your music will need to get a lot of plays to generate revenue. Creating a unique, high quality music video that goes viral is your best chance of making an income through YouTube. 

Social media

Finally, musicians can now make money through social media. Social media platforms like TikTok pay artists $0.03 for every video that contains one of your songs. Adverts containing your music on social media platforms like Facebook can also result in royalties. 

Each social media platform has its own way of generating money for musicians and it’s worth doing your research. In the case of Tik Tok, your best chance of getting your song viral (and therefore making money from it) is to upload a catchy snippet and use the right hashtags.