Week 2: Your Income & Your Art


In this week’s lecture we want to walk you through some of the most likely ways to make money from your art.

As a worker in the creative industries, your income will come from a variety of sources. You won’t be earning income from exactly the same source throughout your career, and during your career you will find that having more than one potential income source will alleviate instability. You all have skills that can be used in a number of industries too. In a film studio for example there will be filmmakers, audio technicians, composers, sound designers, animators, concept artists, graphic artists, web designers, and even game designers if they create a game to go with the film. You could be working on interactive documentaries for online newspapers, training games for corporations, films, animations and games for medical facilities. More places where you can work are opening up too. There are lots of possibilities ahead for you.

But let’s begin with one of the most common sources of income: being an employee...

Employee

You can be an employee at a production house, studio, agency, or company. On the one hand you may have the stability of a salary, along with paid leave and other benefits. You will also always have projects to work on, and be working as part of a team. You are not responsible for getting the work in, but you will be expected to perform to the best of your ability. There will be deadlines you have to meet, hours of attendance, meetings, and reports to file.

You can be a full-time or part-time employee, but either way you will most likely be on a salary. Different to a freelancer, a salary is a fixed paid amount per year. You do all your assigned tasks regardless of how long they take. You can be paid weekly, fortnightly, or monthly. Your employer pays your tax, superannuation, sick days, and leave. Depending on your job, you could also be paid a bonus if you meet predefined targets. But monetary goals are found to work well in the short-term and poorly in the long-term.

You will also have to work on other people’s projects. While there are times that you can pitch ideas, the ideas will need to have a business model attached to them to ensure company overheads are addressed. You can be more a cog in a machine than having creative freedom.

You won’t necessarily be an employee your whole career though. You can learn a lot in a company working with other people, observing their processes, and working on projects with budgets that may be much larger than you could manage yourself.

So let’s say you do decide to pursue being an employee at a company. Where you want or are willing to work determines where you can look.

Do you only want to work locally?

Is interstate employment an option for you?

Is international employment an option for you?

Once you have decided which of these are options for you, then you can look for jobs. Before you apply for a job or contact a company you will need to do some research. How do you know what sort of company they are? Do you rely on the sort of projects they produce? Do you rely on they way they are depicted in media? Do you rely on how colleagues speak about them? You can do all of that. There are other ways too. Services like Glassdoor provide a place for employees to share stories about what it is like to work at a company. This, along with speaking with peers, can give you an insight into the culture of the company.

Screenshot of Glassdoor http://www.glassdoor.com.au/index.htm

Consumer Sales

Alternately, you may decide to be an independent creative earning income from the sales of your projects. Your sales can be transaction—or subscription—based. Transactions vary from ‘pay once’ to ‘freemium’ (don’t pay to access but pay for other elements) to paying up front and further with in-app purchases.

These all have their own pros and cons, and of course actually having people buy your projects is not easy. You audience need to know about your work, and want it enough to pay for it. Either way, charging for your project changes the creation process, especially if you’re doing a freemium-type model where you charge for elements of your experience along the way. In this instance, you need to decide what to charge for. Do you charge for critical elements to the experience (they cannot progress without spending money for example), or do you charge for elements that enhance but are not critical in any way (such as customising their avatar)? These questions are experimented with and debated often.

Pricing Psychology

If you are selling your own projects direct to a “consumer” (audience, player, interactor, reader…), then you will need to put a monetary value on what you create. This can be one of the hardest things you do as a creative. Often at the beginning of your career, you will greatly undervalue your work. But when determining the figure, you may also consider the greater (economic) context of your work (there are set price tiers in online stores like iTunes for instance), and the psychology of pricing. As a consumer yourself you will be familiar with pricing strategies, but here is a list of commonly employed ones based on psychological studies:

Prestige Pricing: the more expensive it is, the more it is perceived as being higher quality
Penetration Pricing: where you sell for a lower price at the beginning to gain market share
Comparative Pricing: showing your price alongside others
Hardest Dollar: if they’re willing to spend $1, they are willing to spend $20. The willingness to buy is the biggest hurdle. Subscription gets you past the “hardest dollar.”
Intangible Terms of Sale: increase value without altering price, for instance by offering further support.
Selling Time over Money: “spend a little time and enjoy…” as opposed to “spend $5 for the album” — referring to time leads to more favourable attitudes than price as it fosters a feeling of personal connection.
“Useless” Price Points: offering redundant or duplicate price points to encourage people to seek value rather than a bargain.
Sales: a bargain offered for a short period of time. (TJ Thomas argues that sales do harm to independents because people wait for the sale, which independents cannot survive on)
Power of 9: rounded price points result in more sales. Check out William Poundstone, the author of ‘Priceless’, in this video talking about the ‘power of 9' and ‘charm prices’ for more information of this phenomenon:

Running Your Own Studio

You may either jump into running your own studio in the beginning, or move towards that later on. You don’t have to wait until you can buy or lease a building and employee 100 staff either. You can join together with some colleagues (fellow students perhaps), and unify under a company name but work remotely at your different homes. You could rent a co-working space to spend time with other indie creators. These options will reduce your overheads so you don’t have to earn too much to keep the company afloat.

What many people also do is share the basic business costs, but put effort into working for no salary to produce a work that will hopefully gain them income (from consumers) or at least interest from clients. Either way, once you have a company there are costs you need to attend to, and therefore work you may need to take on to keep the studio running. Some studios don’t publicse the corporate work they do and just promote their independent creations. While others make it clear they do both. Check out this article on ‘The Art of Making a Living: Creative Entrepreneurs Turn Their Passion Into Careers.’

Crowdfunding

Another aspect to sales that has arisen as a viable option for creatives is crowdfunding. Legally, they are not considered donations but instead are ‘pre-sales’. So people buy your ‘product’ or ‘service’ before it has been released. Services like Kickstarter, IndieGoGo, GoFundMe, Patreon, and Pozible have made it an accessible approach to production funding. It is as if people are being patrons for your work. The notion of a ‘patron’ has existed for centuries though. Queens, Kings, politicians and business people have been ‘patrons’ to artists: commissioning work, offering financial assistance, housing, equipment, and promotion. The difference now is that the everyday person can contribute to your work. There are lots of little payments from lots of people rather than a lump sum from one person.

As we spoke about in pricing strategies, there are different approaches you can use. Most crowdfunding sites use a model where there are fixed price points that are available for a short period of time (one month is common for a campaign). But with sites like Patreon, contributors select a fixed price point on a subscription bases, supporting an artist with a payment each time they release a new project or update.

Some crowdfunding tips:

• It depends on how much of a network you already have
• You ask for what you think you have a chance of getting, not what you need (you will need more)
• You need to have a video
• You need updates
• You need perks/rewards matched to the key price-points (ie: 25, 50, 100)
• You need to use email as well as social media
• Consider the cost of rewards
• Consider the time away from development & production
• Contributors are not necessarily fans of the project, but can be fans of you instead…

Day Job

Will you take a “day job”? That job where you do things for money to support you while you do what you really want to do after hours. How does this affect you? Tired after work, you may find it harder to be creative. There may be a growing resentment towards your day job as it keeps you away from what you really love. But you may find something that takes care of your basic (or better) income needs, and you manage to work on your creative practice at the same time. Indeed, over time you may find jobs that support you and compliment your creative practice too.

Consulting

One avenue of income may be consulting. For some this is a day job, for some it is their main job after doing some creative works (or none), and for some it is one avenue of income that relates to their creative practice. Consulting means you give advice on a project that other people are executing.

How do you become a consultant? Who is the target market for consulting work? How do you reach these people?

Consulting work is often the result of your being perceived as having expert knowledge. While not always the case, most consulting work comes from clients that either have never done work in your area or are at least early in their career. Oftentimes the clients are looking for validation of their own creative instincts, and since they’re new to the area can only learn so much. Consultants can gain work by giving talks at industry events targeted at these interested clients. A common technique is also to publish a book on the subject, cementing your ‘expert’ status. Writing articles and having resources on your website also helps people see what you can offer. On your website, consulting is usually described under ‘services’.

http://www.bobettebuster.com/

Public Speaking

Creatives are often asked to give presentations at industry or public-facing events. Not all of these presentations are paid as some festivals and conferences will only pay for accommodation and travel (if that). But when you are paid, it can vary from small figures to tens of thousands of dollars. Some creatives put a lot of time and energy into promoting a busy public speaking life as it is a way to travel the world, to meet with peers, a way to gain consulting work, and a way to promote your work. Indeed, many speak about the making of their projects as they take on the public speaking events with the primary aim of promoting their work. These gigs don’t necessarily result in many direct sales, but you can get media coverage, consulting work, more public speaking gigs, and commissions. The high-paying gigs are often for people with an agent who manages their bookings.

Commissions

A commission is when you are paid to create a project for a client. They may put a call out for proposals, or they may approach you directly, or you may be brought on to a team that has been commissioned. The constraints on that project vary. They may commission you to do whatever you please (rarely) to creating something with very specific constraints.

Have a look at this website, ‘Who Pays Artists?’, where artists from around the world reveal how much they were really paid to do what job…

Funding

In every country are arts and industry bodies that fund creative projects. In Australia we have the Australia Council for the Arts, Screen Australia, Film Victoria, Screen Queensland, Multimedia Victoria, and more. You can apply for grants or funding, or research and development, or enterprise support. The grants and funding can be for the development or production of your project. To apply you have to fill out extensive forms that detail your project, your team, the background of your team, the budget, any images and videos and sounds about your project, and letters of support. You are assessed usually by peers and staff of the funding body, according to the criteria of the fund (what sort of projects they are looking for), your track record, and likelihood of executing. The applications take time and due to the criteria requirements can change the nature of your project. A couple of early career funding opportunities for all artforms in Australia (and internationally) include:

Residencies

Residencies are another way creatives from a large range of artforms can be paid to create projects. Sometimes you aren’t paid for your time, but they will supply the accommodation, venue, food, per diems, and/or travel. The nature of the residency varies too:

  • Sometimes you are paid to create whatever you want at a particular place.
  • Sometimes you are paid to create a site-specific work while at a particular place.

Some listings of residencies:

Sponsorship

Your creative project may receive financial or distribution or publicity support in exchange for representation in and/or around your creative project. The brand or company will have requirements around how they are represented, and if you include them in your creative project then that changes what you create. For instance, if a brand of car sponsors a TV episode, then you need to integrate the car into the storyline. The great challenge of sponsorship is incorporating the products in a way that makes sense to the fiction you’ve created.

Advertising

You could have advertisers pay you a fee or a percentage of their earnings for placing their ads in or around your creative project. It means your audience pays with their attention, and that attention results in a fee for you. For instance display ads on your website and videos include: banner, text links, pre- or postroll ads, and overlays. But the amount of views or click-throughs you need to generate any income is extremely high and hard to achieve.

Let’s say for every 1000 views your video or page gets, you earn $2. That’s an approximation of what you might expect from most ad networks that new video makers and writers would be able to get into. If you have 100 people read each article you write, you get an initial burst of $0.20 per article. That’s not really impressive.
But, let’s say that each day, every old article you write gets 5 views. That’s enough to earn one cent. So, you write an article, it gets $0.20 initially, and then you earn $0.01 per day for a long time afterward. You write another article, you get that $0.20 initially, and then it earns $0.01 per day for a long time afterward.
Let’s say you have a daily schedule of this. Let’s look at what that’s like over the course of a month:
Day one: You earn $0.20 from that initial article.
Day two: You earn $0.20 from today’s article and $0.01 from the “long tail” of yesterday’s article, totalling $0.21.
Day three: You earn $0.20 from today’s article and $0.02 from the “long tail” of the previous articles, totalling $0.22.
Day 30: You earn $0.20 from today’s article and $0.29 from the “long tail” of the previous articles, totalling $0.49.
(The Reality of Earning Money Online)

Licensing & Royalties

Once you have created your work, you can then give permission to others to sell it or use it for a fee. You may be licensing other people’s work in your own projects, and you may license your own work and receive royalties. What you earn depends on a number of factors including the terms of use (a fixed period of time, limit on uses, etc), and who is paying. As we have seen in music, artists who license their music to streaming services are not benefitting greatly from the deal.

In August 2013, musician Zoë Keating shared the statistics on what she earned from Spotify. She earned $808 from 201,412 Spotify streams of tracks from two of her older releases in the first half of 2013. That is a small amount to earn for so many plays. But, as Mark Mulligan argued in keynote at The Future Music Forum, we are moving further into ‘curated’ services and this has consequences. These ‘trends’ or phenomena don’t just affect music, and will emerge more.

https://musicindustryblog.wordpress.com/2014/09/29/digital-ascendency-the-future-music-forum-keynote/

“Psychic Income”

So there is a range of sources you could potentially gain income from for your creative projects (and there are many more not explored here too). What do other creatives do? In the 2011 Australian Screen Producer Survey, the national study looked at the demographics, motivations, sentiments and activities of screen producers across four industry segments: Film (green), Television (blue), Commercial/Corporate (purple) and Digital Media (red). The survey asked the sources of income producers received over the last five years:

http://www.screenproducersurvey.com

The survey also asked what drives or motivates them? Have a look at the responses. What is most important to each industry? What is the least important to each industry? Out of those listed below, what motivates you the most? Place them in order 1–14 for yourself…

http://www.screenproducersurvey.com

These motivations relate to what American economist Lester Thurow has called “psychic income”, which includes the ‘non-monetary benefits and costs — fame, power, friends, physical discomfort, risk to life etc’ gained from work. So when you explore different income sources you are also exploring what other value you get from each of them. It isn’t just about the exact figures, but the processes involved in them, how they affect your work, and what else you gain from them…

You could even take this a step further, and build your business model around the impact your business can have. For instance, whether your business includes jobs for people with disabilities, micro-lending, pro-bono work, and beyond.

Screenshot from http://www.modelsofimpact.co/

Or you could think about even more alternative “open business model” approaches that use Creative Commons.