When it comes to the fundamental ways to make money with music, the music industry has changed completely
Traditionally, music was sold as a physical products and therefore was highly profitable. We can call that the golden days of the music industry when artists, managers, and record labels were bathing in pools of money.
It's a bit different today right?
It definitely is. However, there are still many ways to make money with music because we can leverage the invention of the Internet. The ability to sell products and quickly build a fan base online has never been easier in the history of the world. So although the revenue channels in the music industry are very different they can still be very profitable if you know which ones to go after.
So which revenue channels should you focus on?
It's a great question and we recommend that you focus on multiple revenue channels in order to diversify your revenue. It's not good to have all your eggs in one basket. We recommend this because each one revenue channel will likely not sustain you on it's own. However, multiple revenue channels can provide you with a decent living.
So, it is very important to focus on building multiple revenue channels to support yourself as a musician and to make money with music.
In the rest of this post we will talk about the five most popular monetization channels for your music and how you can sustain yourself as a career musician.
You are no stranger to this one I'm sure. It's hard to talk about how minimal the stream payout is but it is a channel worth mentioning. It can be long-term passive revenue if you are continuing to build a fan base for your music.
Let's face it, if you don't have an audience or you don't have a fanbase then this channel is not great. You might even say useless. You might be lucky if you could even buy some fish and chips at the pub. Don't they look delicious though? Anyway, back to making money.
So, it is ESSENTIAL to have an audience to make this revenue channel work. If you're reading this and just starting to build your audience then this video might be worth your while in order to help you kick start your audience.
In January of 2019, according to SongTrust, Spotify reports that it pays out between $0.00331 and $0.00437 per stream to rights holders.
Let's say for simplicity purposes, we call it an even $0.0038
But like we said, good luck trying to afford your next meal if you only have a handful of Spotify listeners per month.
Where we can turn this whole thing around is in your ability to leverage your audience and turn them into monthly listeners.
Let's say you managed to get 250,000 monthly listeners.
So that's 250,000 x 0.0038 which equals $960.00
Were you expecting more?
I bet. But, is it that bad? Let's look at it from a different perspective.
Keep in mind, this streaming revenue channel will not be our only monetization channel to make money with our music. It will be one of many.
If you had four other channels making $960 a month, then that would be:
$960.00 x 5 = $4,800
With $4800 of cash flow per month, that is more than enough to sustain a decent living. Go ahead and buy three orders of fish and chips at the pub. Hehe.
But the key thing to remember is that as we diversify our revenue channels, each channel does not need to sustain itself on their own. Yes, of course, this Spotify streaming revenue would not be able to support you if it was your only revenue channel.
You might be thinking, but 250,000 monthly listeners! That's a lot of listeners!
Yes, it is. Especially if you're starting at zero. But it's not impossible or dare I say very difficult to achieve.
The ingredients to do this are to get on as many Spotify playlists as possible, finding reach through paid advertisements like Facebook and Instagram and then creating content that supports your brand.
This is the recipe to convert fans into listeners. It'a all about working with the marketing funnel to convert visitors into listeners. There are people out there who like your music, we guarantee it, you just need to reach a lot of people.
Sadly, just getting on Spotify playlists won't cut it. Even though, it's still great to get on Spotify playlists, especially Spotify editorial playlists, it's only one piece to the puzzle. For instance, someone listening to your music on a Spotify playlist is likely doing it passively. Not actively. They're cooking, cleaning, or working out.
However, think of a true fan that's listening to your music, they might actively listen to all your songs multiple times in a day. Save your songs and share your songs with their network.
It's important to always be converting listeners into fans. If not, then your monthly listeners number will drop immediately once you're taking off a playlist.
So to recap, streaming is an important revenue source for you to build throughout your music career. However, the only way to make this revenue source valuable is to convert your monthly listeners into active followers of your brand and active listeners. Did we say it would be easy? No. Unfortunately not. If it was, then everyone would be making millions.
Merchandise is the second revenue source that we suggest you start to passively build into your revenue portfolio. Merchandise can be anything from t-shirts or tote bags all the way from custom made key chains to temporary tattoos. Literally anything, and we'll explain how to do it easily.
We do not recommend that you purchase inventory and keep it in storage. This could potentially be a very bad investment for you if you don't sell the products. Then you're sitting on boxes upon boxes of t-shirts stored away in your closet.
A few decades ago if you wanted to sell a product you had to purchase that product at a wholesale cost and then hold it in your inventory storage until someone buys it.
Once someone purchases that product you would package it and ship it to them in return for a cost.
This type of business model has completely changed thanks to drop shipping.
What is drop shipping?
According to this drop shipping Wikipedia article drop shipping is:
a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customers' orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
So, in other words, you don't have to worry about purchasing any inventory so there's no cost or big investment on your end.
Not only that, this means you could literally have thousands of products available or listed to sell to your fans. Without having any of these products made yet.
So, how is this possible?
These apps are usually free, since you likely will have to pay for the ecommerce platform that you choose to go with. However, the monthly cost for an e-commerce platform is reasonable. Especially if you're selling products each month.
Let's take a look at using Printful and Shopify.
Let's move past the obvious stuff like, you'll need to setup an account with both apps, etc.
The beautiful thing about third party printing drop shipping services like Printful is you don't need to necessarily know what you'd like to sell. The idea of drop shipping printing services is that they provide you with hundreds of products that you can sell. Fo example, t-shirts, mugs, stickers, socks, caps, sweaters. Let's just say, lots of products!
You'll have the opportunity to sell all of these products if you'd like or only choose a few. It's up to you. The one thing you do need to know is what are you going to print on your products? You'll need to decide the brand or design you would like to have printed.
Let's walk through a popular product example. T-shirts.
Everyone loves a fresh white t. Especially, if it's from their favourite band. It's no wonder why t-shirts are such a popular merchandise product for bands and artists.
Your design can be anything. Popular designs could be:
Band or artist logo
Name of the band or artist with a custom font
Upcoming tour dates
Album or single art
Single name with a custom font
These examples are all straightforward to make if you have a photo editing software like Adobe Photoshop or you have a friend who is a designer. Don't worry if you have neither of these, it's quite straightforward to do on your own with a small amount of time by using a free product called Canva.
Here are some band t-shirt and merch examples of an artist who used Printful for their upcoming single called Sorry.
These fonts were also found for free by going to Google fonts and searching for a font that fits your brand image. There's tons of cool free fonts on Google to choose from so we recommend using this service too.
Once you have your design made then you can upload it to any products that you'd like. Remember, there's no harm in adding more products than you think your audience would like. You never know!
Once a fan buys a product on your website, Printful will ship the product to your customer. You don't have to do anything but collect the profit. However, keep in mind that Printful will want a cut of the profits too since they're doing a lot of the work!
Profit margins tend to be smaller with drop shipping rather than doing everything yourself. There's always pros and cons. A standard t-shirt might wholesale at $8.00 with a drop shipping product. It can go up from there as well depending on the quality of the fabric or the design detail. You can choose the price and that will set your profit.
So, if you sell a t-shirt for $20.00 on your website:
Product Cost: $20.00
T-shirt wholesale cost: $8.00
Profit for you: $12.00
If you think $20.00 for a t-shirt is too steep then you can charge $10.00 instead. That's completely fine. However, your profit would then be $2.00. It's up to you.
3. Affilate Marketing
Affiliate marketing is a tried, tested, and true way to make money that has been around for decades. It essentially means that you, the artist, refers someone to a product or service. If that person you referred signs up for that product or service then you get something in return. Usually money but sometimes it can be credit or discounts too.
Okay, let's look at a simple example:
Let's take the company Fender Guitars. Fender has an affiliate program that when you promote Fender Play (their guitar learning app), you will earn a commission for every new subscription you refer to them.
So let's say you have a large following on Instagram, Youtube, or an email database. You can promote Fender Play to you audience. If someone signs up from your promotion then you'll get some money.
Not bad right?
You might be asking yourself, well, how do they know for sure the customer came from me? Well, you'll be given a custom URL that is unique to you. If the person you referred signs up with your URL, then it's pay day.
There are all sorts of companies that offer affiliate marketing programs. Ideally, you'll find a program that is suitable to your audience.
Try to do some research or think about what your audience might be interested in and what could you refer to them that could earn a bit of side cash for you.
Here are five examples of affiliate marketing programs that could be useful for musicians looking to make money:
4. Outsourcing Your Time
This can be a valuable way to make money but it's a slippery slope because this can eventually start eating away lots of your time. Time is finite. This is the first revenue channel that will consist of time input = money output. In the above three examples on making money as a musician, there is time investment upfront but then it becomes passive revenue afterwards.
Outsourcing can be a valuable source of revenue if you do have the time to give. Maybe watch one less Netflix show a night? Or wake up an hour earlier? You can always find the time.
So, what do we mean by time outsourcing exactly?
We mean trading something you are good at for money. Traditional examples would be teaching piano or guitar. Essentially, you give your time for something and then in return you get money.
With the invention of the internet, you can connect with anyone around the world looking for a skill that you might have where you can exchange time for money.
How do you find this people?
We do not recommend that you start to find these people yourself but rather sign up for a service that already has the marketplace of buyers and sellers that you can tap into. Our favourite examples would be Fiverr and Upwork.
Let's briefly take a look at Fiverr and talk about what potential services you could offer as a musician.
Fiverr is an online marketplace for freelance services. For example, some of the popular services are digital marketing, web design, and software development.
What a lot of musicians don't know is that there are services within the music industry that people are willing to pay for. Literally hundreds of people are waiting for you to sing on their next song, edit their vocals, mix or master their track, write a song, edit a podcast, write some lyrics, seriously, the list goes on.
We can almost guarantee, if you're a full time musician then you will find a service that you can provide. Better yet, a service that you can get paid for!
Here is a more detailed list of all the potential services offered within the Music and Audio section on Fiverr broken up by categories:
Ok, yes, we understand that this is not literally making money with your music. As in, the songs you created. However, there is potential that you could write songs for other people. And in return they will pay you for it. So that seems pretty good to us.
So how do you get on Fiverr to start making money with your music skills? Head over to Fiverr.com and click on Become a Seller.
It takes about 30 minutes to start an account and get verified on Fiverr. They are strict in terms of who they allow to sell on their platform. They want to make sure everyone is legitimate. Fair enough.
Once you finish your account setup you can create your first Gig. Gigs are what Fiverr likes to call jobs.
Your first Gig could be: Write A Song Including Lyrics and Melody
If you can't think of gig then what we recommend to do is browse Fiverr within the Music and Audio section to start getting ideas on what types of services you can offer.
For example, let's take a look at the Songwriters section;
You can see there are a variety of songwriters offering there service and there is quite a variety in price. Could you offer a service that is competitive or could you do it better?
Maybe you can compete on price and offer songs at a cheaper cost. Or perhaps, you have a great resume of writing hit songs, could you compete on quality? It's important to ask yourself, how can you compete with the other sellers on Fiverr. Why would your service be better than others?
What if you don't have the time to do this or you don't want to put the effort in?
Ok fair enough, this revenue channel might take considerable more time and effort to setup and maintain. However, you could offer a service that provides you with some additional revenue that hardly takes any time. Perhaps it's something you do in the evenings or on the weekends. You control the amount of time to give.
For something that requites a small amount of time, we'll need to think outside the box.
What skill set do you have that you can do within 30 min to 1 hour and charge a fee for? Or what service is Fiverr missing that you could monopolize?
A super simple service could be converting MP3 files into WAV files. This is something that takes 5 minutes. Yes, it might be hard to believe but this is an actual service that is offered that people pay for.
Something a touch more complicated but still not overly difficult could be comping or tuning vocals. Depending on the track, this could take only an hour or two. This is already a service that is offered in Fiverr that is not overcrowded:
So what happens after you've published your Gig?
Now it's a bit of a waiting game until you get your first order. However, what you can do in the meantime is look at the Fiverr analytics and optimize your profile to increase the amount of orders you get:
Here's an example of Gig Analytics and what you would see on Fiverrr. People are viewing (impressions) your gigs but not clicking on them. How come?
Maybe it's priced too high? Maybe it's too cheap looking? Maybe you don't have enough reviews or references? It could be a number of things. You need to start testing things and improving your profile.
Overtime, once you start improving your Gig pages and more importantly start getting orders and reviews. Then your profile will start to snowball. Remember, everyone who is a top seller on Fiverr started at square one.
5. Music As Entertainment
No one wants to play another cover of Sweet Home Alabama or Country Roads but hey, sometimes you just gotta do what you gotta do.
And also, those bands use to rock so hard! Check out this super old video of Lynard Skynyrd rocking out in '77:
Ok, we digress. But you don't have to be singing or performing classic rock to get paid as music entertainment.
Music as entertainment can come in all shapes and sizes. Here are six different examples of live music entertainment that you can start making money with:
There are many people that do this as their full time gig. Yes, there's that many weddings. Millions of people get married every year. Millions! A percentage of these people want live music, that's where you come in.
Also, more power to you, if you are a DJ. It seems like over the last year DJ weddings have become more popular than live music weddings.
How can you play live music at weddings?
What we recommend is firm up on the service you are offering. Is it cocktail acoustic music? Is it full on live dance music? Are you a DJ? Or will you press play on a Spotify playlist? Once you firm up on this then make an ad in your local classifieds offering this service. Obviously, if you put an ad up in mid February you'll have less luck than if you would post it in June. So, keep that in mind.
You'll be surprised, people who are looking for live music at their weddings haven't done it before. Unless, they've already been married. Oh well, it happens. Anyway, a lot of people resort to their local classifieds to search for live music.
This is a similar event to weddings. However, Christmas parties still happen thousands of times every year. Think about it. Almost every company has a Christmas party. That's a lot of parities! Ok, we know it only happens once a year and not every company will want live music at their party but that still provides an opportunity for you to make money. So, we'd say it's worth it.
How can you play music at Christmas parties?
We recommend narrowing up on your service, just like in the wedding section. Begin by posting in your local classifieds to start. Think about who is hiring the artist/band to play music at the Christmas party? Is it the CEO? Likely not. Maybe sometimes but likely it's going to be an event coordinator or someone on the HR team.
So, what we recommend is to get proactive and reach out to these people and offer your services to them. Reach out in September or October, yes we know it's early but companies plan far in advance because they're booking venues. Offer them a link to your profile and music.
You might find it hard to believe but party hosts actually hire artists to come play music at their birthday parties. It's a hugely popular thing to do in Europe at your birthday party. Especially in Germany. Perhaps not in North America. Unless you are a child performer playing at 4 year old's birthday parties. Hey, we're not here to judge. If that's what you're into then cool.
How can you play music at Birthday parties?
We suggest that you sign up for Sofa Concerts. This is a marketplace for artists and hosts to plan parties or general concerts. It's very popular for singer songwriters.
Once you setup a profile I'm sure you'll start getting requests to play gigs in no time. Also, you can send your own requests to hosts who you'd like to play for. It's not only birthdays. They offer private events, general shows, and corporate events too.
This is a general event that not only includes Christmas parties but more along the lines of corporate events. Thousands upon thousands of corporate events are happening each week across the globe. From big ones to small ones. A lot of these events are looking for live music and because it's a corporate gig, it will be paid. Not only that, it will be paid well.
How can you play music at Business events?
A big part of business event entertainment is booked through word of mouth. Ideally, you know someone who works for a corporation. Make it known to them that you would be interested in performing at any corporate events. Hopefully, they'll think of you or recommend you the next time an event rolls around.
Another way is to parter with a booking agency. This can be difficult if you're a new artist because agencies tend to work with more established artists. Big corporations will work with booking agencies to manage music entertainment for the event. So if you're in with an agency you could be playing the next Google conference. Who knows!
We needed to slip this one in here because, one, yes, this is a real thing. And two, if you get in then you may have just made it.
High tea is something, let's say, of a higher class for an afternoon event. According to the Oxford dictionary; it is a meal eaten in the late afternoon or early evening, typically consisting of a cooked dish, bread and butter, and tea.
How can you play music at High tea?
In modern day North America it has become a ritual for some wealthy individuals. So wealthy that they would like to hire live music entertainment while they drink tea in the afternoon.
Biased towards instrumental music. Specifically, piano. Although, if you land a recurring gig playing high tea then you could be looking at getting paid quite a pretty penny.
What we recommend again is getting into the local classifieds. Start rubbing shoulders with the more elite or wealthy class in your city. It's a small network at this level and once you're in, you're in.
This is an obvious one. Every pub wants live music. We would find it very hard to believe if they didn't. Ok, maybe not every night but at least a couple nights a week. The trouble about this one is the spots are usually taking.
There is usually someone named Kevin or Phil who has been playing once or twice a week as the local entertainment for years and he's milking this gravy train until the cows come home.
How can you play music at the Local pub?
You'll need to make friends with Kevin or Phil. Once they're sick. You fill in. Make a splash and try to be 10x better. If you are, then you'll be invited back more. Sorry Kevin.
If there's no live music at the pub then what we suggest is talking with the manager. Offering to play once a week. Maybe even starting out free. So you can show them how good you are and how you keep the customers entertained. If you keep people there and keep them buying drinks and food then the pub will have you back again and again. A great way to have fun while making money and also great practice.
Making money as a musician can be difficult if you only stick to one revenue source. If you've learned anything about making money as a musician in this post we hope that you've learned to diversify your revenue channels. Don't put all your eggs into one basket because like we said at the beginning, the glory days of selling records are over. It's time to diversify your revenue!
If you're looking to get on a Spotify playlist or find ways to increase your streaming revenue then we can try to help you with that. Submit your music to us and if it's great then we will help you get heard. Here are two of our favourite popular playlists that we've featured many up and coming artists: