Revenue Streams in the Modern Music Industry

As an Artist, Songwriter or Producer you’re always looking for ways to make a living from your music, and naturally you can’t help but wonder if there are some untapped income potentials out there for you to explore. That’s why we tried our best to map all of the main revenue streams available to Music Makers down in this simplified chart.

1. Mapping the Music Industry’s Revenue Streams

Selling more records and getting more streams is probably one of the first things that come to mind when an Artist is looking to grow their career and income. But what if we told you there’s more that can be done while you wait for your latest single to get playlisted or go viral on TikTok?

2. An overview of income sources

Obviously some opportunities won’t be available to you before you reach a certain stage in your career, and that’s okay. Here’s the complete list:

Let’s get the obvious out of the way first:

Recorded Music & Music Publishing

• Physical Album Sales: The classic trio of CDs, Vinyls and Cassettes (yup, those are coming back too). Selling unique and original Physical music products will always be a great way to differentiate yourself and grow your income.
• Digital Downloads: When you release your music through a Digital Distributor, it also becomes available for purchase as a Digital Download on iTunes and other platforms. It’s unlikely that you’ll be making much money from it these days, but it’s good to know that it remains an option!
• Streaming: The main focus in today’s Music Industry. Releasing your music to streaming platforms is one of the first things you think about when trying to monetise your recordings. And with the many Digital Distributors out there such as CD Baby or TuneCore, it’s never been easier to get your music onto every DSP. Check out our article about Artist & Label Services and Distribution Companies if you’d like to learn more about it.
• Radio: Radio is still very much alive, and remains a primary music discovery tool for millions, so don’t discount it just yet. Try reaching out and submitting your music to local, online and even national radio stations. Most of them like NPR in the US or BBC Introducing in the UK have a way for you to submit your music, so it’s important to take advantage of this. Make sure you’ve registered your song with both your country’s Neighbouring Rights organisation and PRO so you receive royalties for any airplay you end up getting.
• Synchronisation: Getting your music in Films, Commercials and TV productions usually requires a lot of contacts and patience, but creating those relationships with Music Supervisors can prove very fruitful in the long run. Modern alternatives include companies like Musicbed or Artlist, who offer flexible licensing products and services to everyone from YouTubers and freelance videographers, to Businesses and Film productions. Some platforms don’t often accept new music submissions so I’d keep an eye on their websites just in case!
• Live Public Performance: So you wrote a song and added it to your concert setlist. Great, now make sure you submit that setlist to your PRO! You heard that right, Public Performance royalties aren’t only limited to TV broadcasts, Streaming or Radio, you’re also due them whenever your song (composition) is played live, no matter where or by who. So make it a habit to consistently submit your setlist after each concert so both you and other writers you cover can benefit from it.
• Lyric Displays and Print: Although many think this is an antiquated sector of the music industry, you shouldn’t ignore it. Companies like Musixmatch can help you take control of your lyrics and monetise them. You won’t make millions from it, but why leave money on the table, every penny counts!

Live Performance

• Ticket Sales: The most obvious way of making money from live performances is to charge an entry fee. Depending on your deal with the music venue, you might even manage to get a percentage of bar sales for the night too.
• Live Performance Fees: Getting hired to perform music at an event can be a good way to complement your income. You’ll know exactly how many hours you’ll be working and how much you’ll be getting paid, making it a more predictable and reliable source of income.
• Live Stream Monetisation: Although you don’t hear about Live Streams as much as during the height of the pandemic, it remains very much available and with plenty of avenues for monetisation. Check out how to earn money through Live Streaming on TikTok, Twitch, Instagram or even YouTube.

Peripheral Income

• Merchandise: This item should be top of mind for every Artist. Whether you’re selling tote bags and stickers after your gigs, or dropping a new t-shirt design to go with your album release, merch is a great way to build your identity as an Artist and to give your fans yet another opportunity to support your work. If this sounds like it would be a lot to handle, just look into one of the many Print-On-Demand (POD) platforms out there. These companies let you sell products directly from your website and socials and handle everything from printing, packaging and even shipping to your customers. If you have an hour to kill, just create a design on Canva, slap it on a t-shirt and sell it through one of the many trusted Print On Demand (POD) platforms out there like Printify or Spring (which even offers a LinkTree integration). And the best part is, it’ll cost you $0 upfront!
• Brand Partnerships: That cold email you sent to Levis in the hopes of getting free jean jackets for your upcoming tour probably won’t get you anywhere, but here’s what might: think local and make it original! The world is full of small businesses ready to support one another, and as an independent Artist, things shouldn’t be any different. If you come from a small town then maybe your local coffee shop wouldn’t mind selling some of your merch in exchange for a percentage of sales. Or if you have a craft brewery in the area, they might be interested in making a limited run of beer cans with your artwork on them to promote your latest Album release. Think outside box and get creative! The more mutually-beneficial a project is, the more likely it is to happen and gain traction.
• Sponsorships and Endorsements: This one is for all the gear junkies out there (ourselves included), and is more about cutting costs than growing income. Take note of all the equipment you use on a regular basis, from your synth or bass guitar, all the way down to your drum sticks, guitar picks, and even the in-ear monitors you use to play live. Chances are most of the brands you use to make and play music have some kind of an endorsement or ambassador program to which you can apply, so why not give it a try. Worst case scenario you get rejected or don’t get an answer, best case scenario you get approved and start receiving your free supply of equipment. DW probably won’t give you a free drum kit (starting at about $2K) but Remo might just send a new drum head your way (worth around $20). If you don’t ask, you don’t get!
• Crowdfunding: This one usually makes Artists and other Music Makers a bit uncomfortable, and we get it, it feels awkward to ask for money. But it doesn’t have to be that way. There are many Music Makers out there who use Crowdfunding campaigns to directly engage with their fans and help fund their projects. If you’re struggling to fund your next album, rally your fanbase and create a Crowdfunding project for it. You’ll give them a chance to feel involved and invested in the whole process. If you need some inspiration just go on either Kickstarter or GoFundMe and browse their Music category. There are some great examples out there!
• Fan Club Memberships: You want your fans to feel like they’re part of the family, but as your fanbase grows that isn’t always easy or even sustainable. Mailing lists are great but there’s only so much you can do with them to create a sense of exclusivity. That’s where platforms like Patreon come in, giving your fans a chance to subscribe to you for access to exclusive events, content, merchandise and even private video calls or Discord channels.
• Grants: Millions of dollars are awarded every year to small businesses and individual Music Makers through both government and private grant programs. No matter where you live, chances are with a little research you’ll find at least one grant opportunity. For instance, the USA has the National Endowment for the Arts, its neighbour to the North has the Canada Music Fund, the UK has The Arts Council and Youth Music, and the EU has a host of funding opportunities documented by the European Commission. On top of that, each state, province, and even city may have their own separate grant programs, so make sure to cast a wide net and do your research. If you take the time to put together a clear and convincing application, you might just have a shot!

What are the main income sources in the Music Industry?

Income sources in the music industry can be split into four main categories: Recorded Music, Music Publishing, Live Music, and Peripheral Income (this includes a wide range of revenue potentials like Brand Partnerships, Merchandise, or Sponsorships).

What third-party tools can an Artist use to make money?

There exists a wide ecosystem of third-party apps and software solutions designed to assist in every facet of a Music Maker’s journey. Whether it’s Canva for graphic design, Printify for print-on-demand merchandise, Patreon and Discord for fan club management, or GoFundMe for crowdfunding, these make it easy and cost-effective for Music Makers to grow and manage their business.

How do you think outside the box to make money as an Artist, Producer or Songwriter?

Think local and always keep it original. The only way to differentiate yourself is to take what makes you unique and to build on it. This can take the form of unconventional merchandise items, partnerships with local brands or businesses, or even harnessing a strong sense of identity and belonging for your fans through organising special events and offering exclusive perks.

Is releasing your music on Spotify enough to make a living?

Unless you own your music and are getting millions of streams every year, you can’t rely on streaming revenue alone to make a living. Building a sustainable career as a full-time Music Maker means not only diversifying your income sources, but also focusing on building your passive income potential.

Originally published at https://www.exponent-music.com on October 15, 2022.