In the old days … and it isn’t the old days anymore … musicians made money by receiving it from their label. All the money from album sales, concert tickets, and merchandise, then later all the money from promotions and things, was collected by a label and then paid out to all the people who had jobs making that money. The musician was one of those people. I’ve heard they made around $1 for every $10 of an album sale, and probably more money from shows.
Napster disrupted album sales and resulted in a period in which we didn’t know how artists would make money. That seems to have settled down quite a bit, and now there are a lot of services where people get or buy music that goes to musicians, sometimes directly if they’re independent, sometimes to their label.
Recently, a musician for the Seattle band Samuel Orson posted his stats for earnings from across the various platforms he used to stream and provide downloads. To get the data, he used Distrokid.
Bandcamp: $1,025 for 2 albums with free download option
Apple Music: $36.44
Google Play all Access: $14.03
Google Play: $8.04
YT music: $1.00
Groove Downloads: $0.70
Itunes Match: $0.29
Groove Streaming: $0.09
Spotify had 176,548 streams, meaning .004 per stream, or $1000/1m streams.
YouTube had 356,064 streams, meaning .0004 per stream, or $400/1m streams.
iTunes provides $.77 for every $1.00 sale, or $770,000/1m purchases.
Bandcamp provides $.78 for every $1.00, or $780,000/$1m dollars. However, this uses PayPal, which incurs a further 3% plus 30c for each purchase. And if earnings go over $5,000, they reduce their cut to 10%.
– Bandcamp allows musicians to allow free downloads and to pay as the listener wants to pay. In Orson’s experience, 20% of people paid who downloaded his album there. (Note: the more a person pays, the higher the percentage the artist receives)
Now we’ll turn away from Orson to look at another way musicians make money in 2017 — by playing shows an selling merchandise. For a look at a small, popular band that did a tour and broke down the money aspect, click here.
Small, popular headliner hired by a venue: $500-700 plus hotel and flights (cost to venue $1000). Bands therefore often have to split the money and each person makes around $100 per show. If they don’t get a plane ticket, they have to travel in their own vehicles to the show.
CD sale: $10 or $15
T-shirt sale: Around $25
A new way musicians make money in 2017 is Twitch. The platform is primarily for gaming, but you can stream anything there. Reportedly, donations can be higher than what a musician can make from streaming/download sales.
Fans donate money for each video or other thing done by a musician.
A lot of people used to complain about record labels and how they took all the money and left the musicians with very little, but looking at all the work involved in creating accounts, promotion, maintenance and management of all these possible streams of revenue, plus the costs and effort of organizing, recording, packaging, marketing, with photo and video, editing, equipment, you might wonder if it was that bad?