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If you have ever seen a guitar player busking for money, you're probably under the belief that musicians really are almost always either totally broke or filthy rich. Speaking as someone who has a lot of friends in the music industry, I can tell you that being a career musician is really brutal.
The most common question I hear from people who are still learning the ropes to the arts world is, "How do musicians make money?"
Yes, I can answer that question—and the answer may surprise you. Honestly, if you have a good business sense, making money as a musician isn't actually that hard. Here are just some of the different ways musicians make money doing what they love, and how you can learn from their careers.
Getting a Record Deal
How do musicians make money—the big money you see in rap videos? Well, if they work hard enough, network enough, and promote themselves enough, they are able to earn a living by signing with a major record label.
That being said, most record labels really don't give much money to bandmates. You might be lucky to get around $20,000 per year from a record label contract—at least in terms of an advance.
That being said, record labels typically won't sign newbies. If you don't have a following of your own, they won't give you a penny. If you do have a small-but-growing following, you may be able to get a record deal.
However, it's possible that record labels may only offer to sign you via promotions without an advance. So, if you're looking for a surefire way to make money as a musician, record labels might not be your best bet.
How do musicians make money? Well, if you're like the vast majority of musicians that don't have a side gig as a tutor, you will make quite a large chunk of change by holding concerts.
DJs generally make money through bookings at clubs and bars. Rock bands tend to book in rock venues and the occasional nightclub. When you're a band with a good following, throwing a lot of concerts is a very financially wise decision.
Most venues will give a very large percentage of the money people spend on concert tickets directly to the band. The bigger the venue you're able to fill, the bigger your paychecks are.
Most of the DJs I know strike up very good relationships with promoters and consistently market their events on Facebook specifically because their concert earnings are the bulk of their income.
Band merch is a big business, especially if you're a musician or a band that is known for having a very loyal following. Both indie bands and signed labels can sell their own merchandise fairly cheaply.
Bigger, more well-known bands like One Direction can easily make as much as $225,000 per concert just by selling band merchandise to concert goers. Most bands, though, will only make a couple hundred bucks. Even so, it's still money and it helps you fund your way in the music industry.
Merchandise sales is one of the more unreliable ways to make money in the music industry. It's very possible to end up selling no merchandise, even if you play at a packed venue.
I've personally witnessed band members be unable to break even on merch sales—and that's crushing. If you don't have a following, you'll probably be left wondering how can musicians make money through merch sales at all.
How do musicians make money if they don't have a following quite yet?
You're really not going to like this answer if you're a DJ or a band—they book weddings, anniversaries, and similar parties for a reliable income. Wedding DJs can make anywhere from minimum wage to upwards of 400 a night.
So, if you're still working on getting a regular following for your own music, this is a relatively reliable source of income that lets you play music. Is it selling out? No, but it's not always pleasant thanks to the phenomenon known as bridezillas.
One thing that's shocked me is the sheer number of musicians who work in the movie industry.
How do musicians make money in the film industry, you ask? Well, every single movie and television show will need to have a soundtrack or a background song at one point or another. Otherwise, movies would be pretty creepy.
Musicians will often contract themselves out to create soundscapes for movies and television—or straight up offer their music licensing rights to production companies for a set fee. You may need a lawyer or a good handle on intellectual property law to make this your main source of income, but the truth is that it's very workable and very profitable, and has made a name for many small and alternative bands.
If you're a major band, then it's very possible to let your older music do all the working for you. In fact, there have even been cases where bands rented out music rights to movies for as much as $600,000 a pop.
Independent, small-name music producers can make as much as $5,000 per rental depending on their tracks, their skill, and their networking abilities.
Sometimes, part of being a great musician is throwing concerts that are really above and beyond a standard performance. How do musicians make money for concerts they can't afford? They ask for their fans to chip in!
Amanda Palmer, a former half of the classic indie band, Dresden Dolls, was able to raise well over $1 million for a concert and tour via crowdsourcing. If you have fans that really love your work, don't be surprised if this ends up being a very possible source of income for you.
Just don't abuse this method. There's only so many ways you can beg for money before your following gets annoyed.
That being said, this can actually be a fairly good way to get a large one-time round of income as long as you deliver what you promise to your fans and market yourself correctly.
YouTube and Soundcloud
Both YouTube and Soundcloud allow musicians to make money every time that viewers play their content. Pay structures are a bit different on each site, but the fact is that having a good music video or putting up great mixes is a very wise decision for a budding musician.
If you have a strong following and know how to market your music, it's quite possible to get a million or more views from YouTube. Some statistics suggest that bands can make as much as $1,500 per million views.
This means that if you have a ton of fans streaming your music multiple times over, you can easily have a base income straight from YouTube. Even so, most music celebrities utilize these kinds of streaming sites as a form of advertising, rather than a form of revenue.
Having a very active YouTube also can end up working in your favor if you are looking to get a record contract, since it's numerical proof of your following's size.
How do musicians make money the "old fashioned way?" They sell mixtapes, CDs, and albums to people who love their music. There's a lot of different ways to do this—and some are surprisingly affordable.
Because we live in the age of the internet, it's possible to make money selling digital albums rather than actual tangible records. This is the most low-cost way to get money flow going, and it's relatively easy to do on iTunes or Bandcamp.
If you have the thousands of dollars to spring on actual CDs or records, then you have a number of ways to sell them. You can sell them on the streets, get indie music stores to sell them, sell them via band merch stands, or even sell them through a specialized marketplace.
Most major bands make a lot of money on album sales—but this isn't always the easiest thing for them to capitalize on. If you are relatively new to the music scene, you may want to work on other forms of making money first.