This Artist Is Making Over $25,000 Per Song

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Last Tuesday, Amanda Palmer launched her Patreon. You can read what I wrote about her and the launch here. For those of you new to the Patreon model, it’s now time to pay attention and understand how this is CHANGING the music industry as we know it. There are currently over 12,000 active creators (those actually making money) with 225,000 patrons giving over $2 million every month directly to these creators. Patreon keeps only 5%.

+Patreon Just Solved YouTube… And Music

This model is incredibly difficult for traditionalists to comprehend. It flies in the face of everything we, as a capitalistic, society understand to be true. It breaks all the ‘music business’ rules we have come to know (and love?).

But the thing is, this new, crazy model, is working.

Ok, let’s step back. What is Patreon? Because I know many of you reading this right now still have no idea. It was started by Jack Conte, 1/2 of the band Pomplamoose. Pomplamoose gained their fame (and pretty darn big fanbase) from YouTube. Not just one viral video (however their Single Ladies hit definitely helped). For years, they have released high quality, consistent music videos every couple weeks or so. Most of the videos are unique takes on hit songs. Covers, if you will. Because of YouTube’s notoriously low payouts (45% of ad revenue), the revenue from their videos (surpassing 100 million views) wasn’t generating sustainable income. They knew they had fans who wanted to support them more than just buying a song on iTunes. But there was no model in place to enable these fans to give them more money for creating content they were getting value from.

So Conte created Patreon. Patreon is an ongoing, crowdfunding platform. Instead of raising a bulk amount of money via pre-orders like the Kickstarter or PledgeMusic model, patrons on Patreon give a certain amount per piece of content or per month. Ongoing. Creators from podcasters, to videographers, to bloggers to musicians are successfully earning from Patreon. Currently, $2 million a month.

To be clear this is not a paywall or a pre-order. “Patrons” are literally paying creators for stuff that is free and available. Yes, some of the higher levels can unlock exclusives, but the foundation of this platform is not a transactional hub. You’re scratching your head right now and mumbling, “why would people pay for something that is free?!” Exactly. It doesn’t make sense conceptually. But you’re forgetting the main reason this model works: the connection.

The artists who build connections, relationships and trust with their fans are the ones who succeed with this model. The artists who consistently put out quality content and welcome their fans into the process succeed with this model. The artists who offer mutual respect with their fans succeed with Patreon. The artists who distance themselves from their fans via handlers, publicists, labels, tour managers and others to maintain mystique and elusiveness will not succeed with this model.

To get a song on iTunes it takes going through a digital distributor (or aggregator) like CD Baby, DistroKid, TuneCore, Loudr, The Orchard or InGrooves. These services either charge a setup fee or take a commission (or both). iTunes then takes their 30% commission. And at the end of the day, very little data is ever given to the artist – other than the number of downloads. BandCamp is a little better taking only 10-15% commission (depending on the volume your store sells) and gives the artists the buyer’s email along with location data.

+Want To Know Who The Best Digital Distribution Company Is?

Streaming revenue from Spotify, Rdio, Beats, Google Play is growing, but hasn’t made up for the loss in sales revenue for mid level artists. It will. But it’s not there yet. So in the meantime, independent artists need to get creative in the ways they earn a living from their music. The traditional methods of touring and selling t-shirts is fine for some and is still going as strong as ever.

But what about the artists that aren’t living on the road? Where is their income going to come from? Well, Patreon is an option.

Patreon is still in its infancy. There’s still much to be desired. Like a place where fans can go to connect with other patrons. Like forums or chat rooms. Creators should be able to interact with their patrons in a more organized way. Right now the current “Activity stream” is pretty disjointed, confusing and outright messy. But they’re working on this.

Patreon could be the new fan club for artists. Pledge $1 or $5 a month to an artist and you get all music, videos, blogs and other digital artwork, but also get exclusives like B sides, acoustic versions and unreleased demos. Fans crave this kind of content. And artists should use a fan club style platform to give it to them.

A Nielsen study from 2013 revealed that fans would spend up to $2.6 BILLION more a year for exclusive content and behind the scenes access. BandPage is cashing in on this and is building up the live, VIP experiences. Patreon could as well if they structure the site to be the artist-fan connection hub it’s meant to be.

It’s only just begun.

Ari Herstand is a Los Angeles based singer/songwriter and the creator of the music biz advice blog, Ari’s Take. Follow him on Twitter: @aristake

 

Photo is by Amanda Hatfield from Flickr and used with the Creative Commons License

24 Responses

  1. so

    Hi, Ari. God knows there’s too much negativity in comments so given that hate to come off that way, but this is just not the magic bullet you’re looking for. Love the narrative and the creative thinking behind the site, but let’s look at the actual numbers.

    Take an artist like Kina Grannis: she has 1,042,539 subscribers on YouTube and 349 patrons on Patreon. Patreon’s own founder’s page, Pomplamoose, does a little better with 449,755 YouTube subscribers and 1,951 patrons. Peter Hollens has 966,638 followers on YouTube and 1,235 patrons.

    The “per-thing” dollar figures admittedly look pretty good, but the point is, with conversion rates like this, an artist needs astronomically high numbers for Patreon to make any kind of sense.

    Reply
    • Anonymous

      “an artist needs astronomically high numbers for Patreon to make any kind of sense”

      This may be the first time I’ve ever defended Ari, but don’t you think his “It’s only just begun”-comment just about covers that?

      For once, we have a site that everybody likes — fans as well as artists — and that’s a very, very good place to start.

      Reply
    • Tamas

      Totally agree… These people are already making HUGE amount of money on Youtube… for them it doesn’t matter which format they choose… they can make money from their huge following in either platform… However 99% of the bands have less then a few thousand followers, even though they have great music and doing a lot of marketing… So yeah… I really don’t like when Amanda Palmer (or any other famous artist) is an example, because she is more like an exception, not something most of us can follow.

      Ari also doesn’t make any money on Patreon with his music… (he is making money there with his blog)…

      Reply
      • Beezee

        You make approximately $1 for every thousand views on Youtube.

        Looking at Amanda Palmer’s view counts, she wouldn’t be able to buy groceries for a year off of her Youtube video views.

        People on Youtube make an exceptionally small amount of money, unless they’re hitting multiple millions of hits every week.

        Reply
  2. Anonymous

    its a little confusing actually to work out how much she is and will be making. Immediately it comes off like wow, $25k per thing? Thats incredible, but when you do a bit of research and due diligence, it sort of gets a little wishy-washy.

    since there is a cap it will be interesting to know what she ultimately gets in her bank account per thing, its a little misleading.

    its hard to imaging getting $1000 per thing in perpetuity all the time, what if she does 30 things in a month? Those people are really going to pony up $30k for them? Just to talk to her on the phone?

    Awesome if so and super incredible that people are still that interested and blown away by it all, and still awesome either way, but it is a little confusing and misleading.

    As always, the best place to be right now is in convening the music and those that listen or support it, whether through a tech site, a stream business, the patreon or kickstarter or indiegogo etc., owning these business that are creating a bridge and hopes of a supporting community are the real winners here, congratulations to all of them.

    Reply
  3. Anonymous

    “But you’re forgetting the main reason this model works: the connection.”

    I agree: Patreon is the future.

    But I don’t think people pay for the reasons you suggest.

    They pay because they want to enable their favorite artists to create more REAL content (e.g. professionally created art and music, as opposed to disposable digital trash) — and they’re smart enough to know that somebody needs to part with some hard earned cash to make that happen. Don’t forget it’s called Patreon!

    That’s why they choose the most cost-effective solution out there — an almost direct pipeline to the artists — instead of supporting iTunes (this from an Apple lover).

    Reply
    • Anonymous

      Patreon is the future.

      It’s actually kind of the past and the present and that therefore means it will be in the future, but wont ever be the only way it is, its just now with patreon etc. there is a middleman in the picture taking a percentage that back in the day when commissioning and patronage didnt happen because it was direct from person or business to creator or composer or artist or etc….

      Beethoven crashed a party and twinkled the keys well enough to gain some patronage that spurned and solidified his career and his notoriety, otherwise we may not have even know he ever existed, he was apparently at that breaking point and the party crash was supposedly his last ditch effort, or at least that is what the history seems to suggest…

      There has never ever been just one way…

      Not saying anything one way or the other or taking a position on any side or doing any pr work or anything or attacking or fighting or anything, just making some simple observations…

      Reply
      • Anonymous

        “Not saying anything one way or the other or taking a position on any side or doing any pr work

        Please say you’re not that Sarah psycho…

        Reply
        • Anonymous

          Please say you’re not that Sarah psycho…

          Do you have anything constructive to say or add? Or are you just going to slander and bully and tease and make fun of and threaten and intimidate, whether for personal or business reasons?

          Because if it’s just the latter, you can cease and desist, otherwise, please feel free to engage me in a calm and cool classy and gentlemanly manner where we can discuss things in an educated and intelligent manner.

          The internet has become nothing more then a kindergarten playground filled with bullies, where so little positive and constructive is happening, its any wonder anyone still uses the thing, terrible shame…

          Reply
          • Sarah

            Yes, actually, you really did. That’s not my comment but ouch. You hurt my feelings. I’m not sure what I did to offend you to merit your calling me a psycho publicly (this is actually a first for me, so I’m kind of thrown for a loop), but I apologize.

            Also, for the record, I’m not a psycho. You could go with “overly optimistic” or “industry outsider” or “naive” or even “late on delivering what she said she would” (I’ve addressed that elsewhere – and also apologized for my tardiness 🙂 ). But my sanity is not in question. So, you know, please at least be more accurate when insulting me.

          • Anonymous

            “I’ve addressed that elsewhere”

            In your dreams, perchance?

          • Anonymous

            I apologize, you’re certainly not a psycho — please see the other thread…

          • Anonymous

            Hm, did I touch a nerve? 🙂

            Nope, no nerve touched, no reason to celebrate with a high five to your bullying cohorts, just seeing if you actually had anything constructive to add or if you were interested in engaging in an intelligent and educated discussion done in a gentlemanly, classy, cool and calm manner, which i see you are not, which is fine…

            I appreciate your reply and thank you for your time…

          • Anonymous

            Sorry my fellow Anonymous, you’re certainly not a psycho either. 🙂

            Let’s start again another day.

            For now, please see the other thread (A Famous Producer Asks YouTube Why…).

  4. Almark

    Hmm, finally people are talking about Patreon, but I certainly gave it a shot nearly a year ago ‘my music is still there.’ I didn’t find it beneficial, perhaps only 2 bit and I never got paid. If it’s working for other musicians, great. I was first turned on to it by the ASMR community, and since they are doing very successful, I thought why can’t musicians try it? People are very skittish about money, and where they spend it. Maybe now people will find more musicians and give a few bills.

    Reply
  5. James Scott

    Here’s the deal…Patreon has a cap on contributions. It can be a cap based on the content created per month, or a cap on donation amount per month, for example.

    If someone decides they are going to support someone by giving them $5 per song they create, they can put a cap on the number of songs they will put money towards…say, 1 song a week. That’s to protect them from someone going through a manic period and releasing 6 songs a week. So, no matter what, they are only giving $5 per song per week, and that is how they are billed. This is how I understand it to be based on what I’ve read in the process of signing up. It makes sense. This is one example.

    The issue I have is exactly what some others have stated here, “these numbers don’t necessarily last indefinitely. Remember, it is free content, in many cases. What about when people see that someone has 2,000 Patrons, giving $5 per song? That’s $10,000 per song. She’s not making $10k in profit. And, potentially there is a risk that people will just start to say, “hey, she doesn’t need my support.”

    I am also wondering if we are quickly eliminating ways for people to even feel that support is even necessary?

    When people had fewer options to access material from Artists there were definite streams of income. There are more and more streams of income and they are supplying less and less income. No? Each stream allowing for a greater reach, and returning less and less to the creator of the Art.

    I’m a Musician, and someone that creates Music for a living, as well as teaching privately and using Youtube to reach more folks. It’s not making much of an impact on my bank account…actually, it’s not even noticeable, sadly.

    We’ve collectively rationalized our way into a situation in which the future doesn’t appear to be getting better for Artists. It appears to only be getting significantly better for the New “gate keepers” which happen to be Social Platforms. They will ultimately walk away with millions, if not Billions, of dollars. And for what? For making it possible to spread Billions of dollars around in smaller and smaller quantities.

    Why can’t these Companies take just 5%, like Patreon is ‘currently’ doing? Why 20%? If they are doing it for the sake of helping Artists connect with their Fans, and ultimately helping to make sure that the Artists in the world continue to be able to create the art that we all appreciate, then why take such a large percentage?

    The whole thing is very frustrating to watch. Watching a Society collectively agree to devalue the Art that makes societies vital, that keeps societies reflecting on the nature of being human and their relations with each other.

    The moment this happens to other fields of employment, where there is a collective push to devalue a trade, skill, etc…there will be a major outcry, just like with the Motion Picture industry. An industry in which people are routinely overpaid, and millions upon millions are spent for a single product. The Emperor has no clothes.

    I want things to better for everyone: The Creators of the Art, the Platforms that help connect the Creators of Art to the People that appreciate it. But, I feel there is something happening here that is more like a band aid on a wound that requires much more than a band aid, something like major surgery.

    Reply
    • Beezee

      Patronage has always been the best and most meaningful way for artists to thrive. Every other avenue is dependent entirely on corporate influence. Patronage means the artist is creating exactly what they want to create and people patron them to continue to bring the value that their art adds to the world. There’s no investment, there’s no points or percentages, there’s just the artist’s vision and purpose given directly to the people. Patronage is the perfect answer in a currency-based economy. It always has been. Things just got massive f’ed up when corporations decided they would be the ones to decide what was and wasn’t created. That time’s long gone now. Now it’s just people. Anyone with access to a computer can have a website and a Patreon account.

      As for the caps on Patreon — those are created (if they choose to create them) by the patron. So if I’m giving $5 to Amanda Palmer “per thing”, if she makes 5 things in a month, I give her $25, unless I personally put a cap on how many times in one month I want to give her $5. Most artists on Patreon will give their patrons some idea about how often they make a “thing”. Other Patreon creators have their payment structure set up as weekly or monthly so as to provide some additional ease for the patron.

      Reply
  6. Versus

    The problem with this model is it makes payment voluntary. She is still putting all her work out for free. Why should anyone pay when they can get the work legally for free, with the artist’s own blessing?
    (It’s a very different matter if free is illegal or violates the artist’s ability to make a fair living).

    Reply
  7. Bob

    I interviewed at Patreon late last year. While there, I learned that the VP is old friends with Ari Herstand, which explains why every other article Ari writes praises Patreon. Don’t trust everything you read. Ari is a creator on Patreon, and will write whatever it takes to prop the site up so that he can get propped up as well if it succeeds. That’s Ari’s take.

    Reply
    • Beezee

      It’s already succeeded. I personally know multiple artists making a fantastic living now because of Patreon coming onto the marketplace. There’s no cloak and dagger. Patreon is just patronage. It’s how Shakespeare and Beethoven were able to survive and work. It’s the way art was meant to be funded. Not this work-for-hire bullshit, not this corporate controlled crap. Patronage means the artist is creating exactly what the artist means to create and the folks goodly enough to patron them make that art possible.

      Otherwise the artist would be lost to a system of corporations and commissions.

      Reply
      • anon

        But I know lots of artists that aren’t making enough for groceries for a whole year on there. That’s the larger part. What is needed is a way that the 99% can make a living from their music.

        Reply

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