There’s a subject of conversation that most of the world takes a genuine interest in but somehow feels kind of dirty when uttered within the confines of the music scene – money matters. Let’s talk about that for a bit.
Before anything, this article won’t talk about getting rich making music. The reality is, you probably never will (of course, we’d be happy if you prove us wrong here!) and most of us are fine with that. However, it would be a little misguided to think that money isn’t a factor at all in what you do as a musician. Hopefully, reading this helps you at least gain a better understanding of how money works in the music business and consequently allow you to have a better handle on it. Most importantly, I hope this opens up more conversations around the subject especially with the people you work with.
Writing and playing music might be free, but a lot of the processes involved in getting your music to an audience has their equivalent costs. So if you’re serious about your music and want it to reach others, you’ll want to talk about this subject a lot more. (If you’re in it purely for the fun, you can probably skip the rest of the article.)
Why we’re afraid to talk about it
For almost forever, there’s been a stigma in the music scene around selling out. I used to throw that word around a lot myself. But these days, I’ve realized there really is no such thing. This identification is something that’s become a trope perhaps most predominantly in the music scene. Think about it – you’re probably not going to call a chef a sellout just because she decided to open a restaurant and it somehow became successful.
Granted, there’s a difference between (a) doing or creating something you don’t like just so you can make a buck and (b) doing something you do love and trying to make money out of it. While the first one might be as close as it gets to actually being a sellout, the latter is definitely nothing to be ashamed about. Heck, I’d be fine with the former too if the money is for a good cause.
Why we should be talking about it
Money is almost a taboo topic in the local music scene – at least until there’s real trouble.
This fear of selling out has gotten us to a point where money is almost a taboo topic in the local music scene – at least until there’s real trouble. It’s a shame, really. Because of this aversion to money talk, we end up with artists getting ripped off by unscrupulous business people (sometimes in the guise of other musicians) or unable to fund a project because they don’t have the resources. I’ve seen many relationships in the industry fail and many decent people lose credibility because of conflicts around money.
As most of us eventually learn, preventing conflicts from getting ugly is achieved not by avoiding conversations but rather by having them. Expectations are better met when they’re expressed and that includes expectations about financial matters. In the end, we can gripe about money issues, but it’s always better to have that consistent discussion that prevents them from happening in the first place.
Where does the money go?
If you’re thinking it’s free to make music, you’re right to an extent. You can always write songs in your bedroom, record yourself on a PC, and upload it to your free YouTube or Soundcloud account.
On the other hand, if you’re interested in reaching a wider audience – whether it’s by playing live, accessing new distribution channels, or promoting it – there are costs that you’ll inevitably incur and these can quickly add up and give you a hard time.
Here are a few things you need to consider:
- Practice time: If you’re a full band, it’s likely you’ll need to spend money on practice time at a rehearsal studio.
- Transportation: Whether you’re on the way to a gig, to practice, or to a recording studio, this is one of the small costs that quickly add up, depending on how many you are in the band and how far your destinations are.
- Recording time: Probably the one most of us struggle with. These days, you can create amazing music with just a laptop. But if you’re in a band, you’re probably going to need a professional to help and the right space, which can cost quite a lot.
- Merch and physical formats: These are more inventory than expense as you can sell them to make a return. Nonetheless, it’s still money out of your pocket to produce these.
- Online distribution: There are ways to distribute your music for free on major streaming platforms, but the service is often not as reliable nor transparent. If you want to keep better tabs on how your song is doing out there, a reliable online service can cost you.
- Promotion: Again, you can promote your music for free through your social media accounts. But if you want to reach an audience beyond your inner circles, it’s often worthwhile to spend on advertising platforms such as Facebook ads.
- Creative work: Asking people to work for free is never good form. As an artist yourself, it should be your priority to make sure other artists get decent pay as well. If you can’t afford it, you could make it worth their while by offering something in kind.
Going through this list might give you the impression that these are all things you can somehow get for free and that’s true. However, you can’t always have full access to freebies nor expect the best quality for free.
More than all of this, the biggest expense in this whole process is your time and that’s something you definitely can’t get for free. Even if you’re enjoying every minute, as I’m sure you are, your time is valuable and becomes even more so as responsibilities pile up. You could “retire” from the music scene at that point but if you had spent the time learning to make your music pay for itself, you might not have to give it all up.
How do you make money?
Here’s a chart. A little outdated, mostly boring. Please bear with me. This shows a case study of how much recording artists (that could be you) earns from various channels. It’s from this link.
If there’s one realization you want to get from this, it’s that there are probably more ways to generate income than are usually top of mind. Here are a few areas where you might be able to maximize the income you make as a musician.
The chart says this has the highest share for that particular sample but this might not always be the case in the Philippines especially for an indie artist. Nonetheless, there’s always income to be made here, and making sure to recognize which opportunities do call for a reasonable fee is important.
This is definitely a controversial topic, and I’m on the camp that sometimes you do need to play for free to get your music heard, or maybe you just want to play for free because it’s a cause or event that speaks to you. In the end though, free should not be the default. What amount is reasonable then? Short answer – I don’t know. That’s a whole different level of discussion.
An obvious one, but also the trickiest since there are so many different ways of monetizing this. Making money out of your recordings traditionally comes in the form of royalties. On the other hand, as an indie musician with some business savvy, making money out of your recordings by yourself has never been easier. Digital streaming platforms are now easily accessible and automatically monetized. Likewise, releasing your music in physical formats and as digital downloads are other ways to generate direct earnings.
For reference, here’s another chart on the different channels where you can monetize your recordings and how they’ve evolved over the years. Takeaway – while certain channels have visibly declined (such as physical formats), the total market has been growing since 2015 and that means more opportunities in the future.
Merchandise and Brand
Here’s another obvious one and the best thing is, this is going to be fun. Designing and producing merchandise to sell is always enjoyable, especially working with a brand you’ve created yourself and have full control over (that is, your band). The down side is, like any merchandising venture, this is going to take some amount of capital. If you’re a natural salesperson (or know someone who is), you could make a good return on this in no time.
Another less common way to leverage your brand is through working with other brands you’re a fan of, i.e. sponsorship and endorsements. Cash sponsorship might be hard to come by these days, but sponsorship in kind (for example, free gear or gift certificates you can use or give out to fans) always helps cut into the costs we talked about earlier. Plus, co-branding is often great for PR, as long as it matches your message.
This is one that probably didn’t cross your mind. Traditionally, you might imagine being a music teacher as teaching someone to play an instrument on a regular schedule, and who wants to do that? But in this digital economy, there are more than one ways to share your gifts to a broader audience. Creating YouTube tutorials, hosting webinars, and writing in a blog are ways for you to share what you know – whether it’s playing an instrument, organizing your band, or whatever helpful thing you’ve learned while making music – and possibly make some income out of it.
In the end, talking about money is always better than fighting over it.
There’s a book called Drive by Daniel Pink that talks about motivators. The gist of it is that there are three key motivators and money is not one of them. There’s an asterisk there though. Pink also mentions that before you can pursue the three key motivators, you need to get money issues off the table. That doesn’t mean you don’t think or talk about it; on the contrary, it means getting a fair and reasonable income so it becomes a non-factor.
In the end, talking about money is always better than fighting over it. The more willing we are to understand and negotiate expectations, the less likely we’ll end up with bad deals and big trouble. We may not be getting rich, but money definitely matters and it isn’t mutually exclusive with making great music.
I have to admit. Even at Melt Records where we’re supposed to handle the business aspects so our roster of artists can focus on creating music and honing their craft, it often feels a bit uncomfortable talking about money with our artists. Despite that, one of our goals is to create opportunity, and that means talking finances and encouraging artists to discuss money matters with us as well.
If you’re interested in working with us, get in touch through our website and we’ll be glad to discuss opportunities.