Waiters Live Off Tips. So Why Can’t Artists?

Perhaps the Great Recession put a damper on decades of ‘tip inflation,’ but these days, lower tips are always frowned upon.  Because those waiters and waitresses are often living off your generosity.

Which brings us to music, where recordings are now promotional, t-shirts are the butt of a joke, and touring is a rare moneymaker.  In this environment, why can’t artists live off tips, at least enough to pay rent, bills, and other necessities?

Actually, there are a number of startups and entrepreneurs asking this very question.  We’ve profiled a number of startups focused on direct artist tipping, which (almost) eliminates the middleman and helps fans support the artists they care about.  Those include Copper and Flattr, both of whom are designed to faciliate direct, impulsive online tipping from fans.

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Expand the concept a bit further, and we have the ultimate tip machine: Kickstarter.  Others, like BandPage, are focusing on creating direct ‘Experiences,’ designed to give fans an extremely up-close, tailored moment with the artists they love (and are willing to pay for).

But can all this support the artist, beyond the Amanda Palmers and Jonathan Coultons of the world?

The answer may lie in the streets, where clever performers sometimes beat the system.  In our locale of Santa Monica and Venice Beach, tourists are often seduced by fire-throwing, rollerblading guitar players, and hip-hop dancing, though they’ll also crowd around smooth jazz and acoustic crooning.  And talk to any street performer, and they’ll tell you three things matter: location, location, location

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But what if that location is moved online?  That’s the thinking behind some newer plays, like the Sean Parker-backed StageIt.  It’s also the idea behind StreetJelly, a site that takes street performances (or any performance) and puts it out there for contributions.

The site is still pretty early, and to be honest, pretty sloppy looking.  But the actual viewing and tipping functionality seems fine, and the central concept is simple: get some tokens, check out some performances, and tip (perhaps suspiciously, StreetJelly says ‘up to 80 percent‘ of the contribution goes to the artist).

Right now, there aren’t that many performances to choose from, though if there’s money, that will change pretty quickly. But how much money could there possibly be?  That’s (hopefully) the million dollar question…

Written while listening to Kevin48 on StreetJelly.  Top image adapted from an original shot by Dave Dugdale (licensed under CC BY-SA 2.0)

31 Responses

  1. Suzanne Lainson

    Tipping online isn’t the same as tipping in person. In person, the person you are tipping usually sees you tip and how much you tip, so you get that instant recognition by tipping. And if your friends are with you, they get to see you tip. If you are big tipper, everyone sees that and you get some added status for doing so.

    • Jordan

      That could be translated online if done right through a facebook API. I agree with you 100%.

    • lifer

      This is the real April fools prank, right? I mean if musicians work for tips why shouldn’t journalists and website publishers?
      BTW where are the financials and investor info for Digital Music News? Or should we call this Digital Music Business News? Who pays the salaries at this publication? The about us is very vague and uninformative.

  2. Jason Davis

    The difference between a waiter/waitress and a musician (especially one that writes their own music) is that the waiter/waitress delivers food created by someone else. I create my own music which I then also deliver. It’s apples and oranges. You get a chef to only accept tips as compensation, and we can talk.

    • dot

      Although I don’t believe this is a strong comparison, it might still be fun to discuss…
      First, let’s try to translate the work of the chef to the work of an artist, musician, etc.
      Let’s say the chef has made food/dishes in the past, and the chef, again, has come to invest his time and efforts into the making of another dish.
      After the dish is done, the chef decides to deliver the dish to a table himself. Then, with little to no effort, he is able to to replicate the dish and the delivery to the rest of the restaurant. Then, with little to no effort, he is able to replicate the dish and delivery to the rest of the world.
      (Of course, the chef has to advertise his restaurant and his dishes and take on other costs during this time, but this does not take away from the fact that the final dish is done and can be replicated with little to no effort.)
      Some consumers might pay a flat fee prior to receiving the dish. Some might pay an even higher fee to be among the first to consume the dish or to receive other relative privileges.
      Some consumers might tip. Some consumers might pay a flat fee as well as tip. Other consumers might only tip. And, of course, some consumers might not pay or tip at all.
      (Let’s also say this chef does not act to prevent consumers, who are unwilling or unable to pay, from consuming his dish, thus allowing him to avoid enforcement and other associated costs.)
      Those consumers that do tip might tip below or above a standard that arises. They might tip repeatedly for the same dish. Some tips from a given consumer might sum to a greater amount than those paying flat fees, etc., etc.
      The result… The chef maximizes his exposure, and, at the same time, cuts his costs. His returns might be less consistent than other systems, but this does not mean these returns have to be consistently low. Of course, anything the chef does involves risk, but there might just be a net benefit to this approach.
      All this from one dish…

  3. Visitor

    Tipping is such an abused concept. It can very easily acquire negative connotations as a form of payment. if abused here.
    Side question: Are you allowed to go take your tip out of the jar at the coffe shop if they screw up your order…TWICE?

  4. Evan Schoepke

    Currently, a relatively unknown tech podcaster named Tim Pritlove makes $3400 a month or more, every month on Flattr, don’t you think that popular artists like Macklamore or Kendrick Lamar pull off more…?

    • Evan Schoepke

      I meant Macklemore I should have know better since I’m only a hour south of SEA and he and I are fellow Greeners, my bad.

    • steveh

      Hey Evan
      Does Flattr pay you a salary – or are you expected to live off tips?

  5. Faza (TCM)

    We can probably skip the standard criticisms about there being a long established culture of tipping service personnel or the fact pointed out by Suzanne, that in a restaurant everyone can see that you’re being a cheap bastard (or a generous tipper) and get straight down to the fundamentals.
    The big problem is that the financials for a waiter/waitress are rather different than for a musical artist. For a start, the waiter is one person, with no capital costs. The tips might make up the entirety of his income (though the employer would need to assure an environment where the majority of the customers do tip – perhaps rolling the service charge into the bill), but often they will be supplemental to a base salary (which may, admittedly, be low). The money made from tips will go solely towards the waiter’s living costs.
    With a musical artist, we start with the simple observation that “artist” may mean anything from a single person to a band of four or five people – maybe more. Each additional person increases the necessary tipping level by one hundred per cent – just to cover living costs. Next, the artist(s) will need money for equipment and consumables (think about how much changing drum heads costs, to say nothing about replacing damaged cymbals). Lastly, getting any product out there requires a sizeable investment. That’s a lot of change that needs to be tossed in the hat, before there’s anything left for beer and crisps.
    A lesser problem – though one I find a lot more distasteful – is the motivation of the companies that spring up to exploit this “new model”. What they’re doing, essentially, is establishing a money flow and insinuating themselves in the middle (without actually providing any value whatsoever). Based on experience, I can guarantee that a tipping system will do very little for the majority of artists (though I can bet there’ll be a couple who’ll be touted as examples of how great the idea is), but will make the folks who run these companies a fair amount. Remember: it doesn’t really matter how little you are receiving personally, as an artist, from such a system. As long as there’s enough people tipping enough artists, the middle-man will be well off indeed.
    This is the kind of “innovation” I could well do without, to be honest.

    • dot

      …often they will be supplemental to a base salary
      This is very important in that the base income, sans royalties, of an artist is usually forgotten about in these discussions. It’s also worth noting that this base income does not necessarily have to be “low” for the artist (where typically it is for the waiter).
      For a start, the waiter is one person, with no capital costs.
      Both of these statements are incorrect.
      It is true that a waiter is one person, but how this statement is used in relation to an artist is incorrect. The waiter does not keep the entirety of the tips. The waiter tips out the host or multiple hosts, the busboy or multiple busboys, the bar tender or multiple bar tenders, and occasionally the dish washers. It is also not safe to assume that there is a one to one relationship with the table. Depending on the establishment, multiple waiters may service a single table.
      It is true that the financials of an artist are different than those of the waiter, but to say that the waiter has no capital costs is incorrect.
      We don’t know exactly what the capital costs of the waiter is. Many waiters and waitresses work these jobs while in school and many take on a great deal of student loan debt. These loans are an investment into the future of the waiter/student (human capital).
      Each additional person increases the necessary tipping level by one hundred per cent – just to cover living costs
      This statement is simply not true. As I’ve already pointed out, this is not true for the waiter nor does it have to be the case for the artist. This statement also ignores the presence of a base income, one that can be wildly different for those of the artist or band members, etc.
      Lastly, getting any product out there requires a sizeable investment
      There is still a great deal of artificially inflated promotional costs today, but, overall, the costs of exposure have dropped substantially. There are many more promotional options for artists today and many more price tiers. (Unfortunately, today, a great deal of time, effort, and money is spent preventing exposure rather than promoting it.)

      • Faza (TCM)

        There are many possible tipping arrangements, I’ll be the first to admit, and for simplicity’s sake I assumed one where one waiter keeps the entirety of the tip (since that was the arrangement hinted at in the article). We can multiply possible arrangements ad infinitum, but that won’t help our analysis.
        To make matters clearer: in order to compare the situations of a musician and a waiter we must assume the same base arrangement of income, otherwise we’ll find ourselves comparing apples to Big Macs. The situation where both keep the entirety of the tip is the best case scenario, which is why it’s the best place to start looking. If it won’t work in the best case scenario, it won’t work in any worse case.
        With regards to capital costs, I’m afraid your reservations are completely unfounded. Student loans are in no ways tied to the fact of working as a waiter and thus just as irrelevant as the fact that a musician may have taken out a mortgage on the house. The only capital costs we’re allowed to include are those necessary to pursue a given profession – these will be small or non-existent for a waiter (at most, the need to pay for his service clothes – which wouldn’t be classed as a capital cost by any standard of accounting practice or economic analysis) and considerable for a musician (the cost of instruments for a start).
        The question of base salaries is easily tackled by pointing out that musicians – as a rule – don’t have base salaries. At all. A musician may have a day job, but that day job has nothing to do with his being a musician. Therefore it cannot be included in the analysis.
        Lastly, you seem to confuse promotion with actually shipping a product. Promotional costs get tagged on at the very end, typically after a sizeable investment has already been made. It’s also worth pointing out that with promotion – even now – you typically get what you pay for. There are certainly many cheap promotional options these days, but their effectiveness is minimal overall.
        F. Must try harder.

        • dot

          The question the article hints at is if tips can be a reasonable alternative to royalties. I think you’ve missed this point.
          With regards to capital costs, I’m afraid your reservations are completely unfounded
          I can see how any cost argument might be seen as irrelevant if the waiter and artist are seen as fundamentally different entities. Both are flesh and blood human beings with no fundamental differences when it comes to economic actions. Economic models, arguments, etc. tend to ignore this fact. But for the sake of this argument, I’ll concede to your conditions.
          On the other hand, capital costs, do not justify a system of royalties. Most industries, some with much much larger capital costs, exist with no royalty systems in place.
          The situation where both keep the entirety of the tip is the best case scenario
          If by this, you’re again dismissing the fact that a waiter’s tip is reallocated among multiple parties, then this should not be the case analyzed. What should be analyzed is the most common case.
          When it comes to the reallocation of tips (waiter and artist), multiple actors are found in both cases. And for the waiter, the most common case involves multiple actors. And this works for the waiter without 100% increases for each member that is apart of the process. To say that this has to happen for the system to work for an artist is baseless. A reallocation of tips among parties that make up an artist is not a reason why a system of tips would fail.
          in order to compare the situations of a musician and a waiter we must assume the same base arrangement of income
          We can’t assume this. The base income of an artist can be very different than that of the waiter.
          The question of base salaries is easily tackled by pointing out that musicians – as a rule – don’t have base salaries
          It is true that many musicians may not have a base salary, but many have non-royalty based incomes absolutely related to them as musicians. Income from shows, merchandise, promotions, non-royalty based contractual exchange, etc., etc. This has to be included in an analysis. If, for a given artist, the income from shows, etc. is greater than those of royalties, then a strong argument against a system of tips cannot be made.
          It’s also worth pointing out that, if a shift concerning income does take place, it is not safe to assume that all other variables will remain the same.
          As for shipping costs… unless we’re talking about shipping a physical product, merchandise, etc., these costs should be negligible. Replicating and transferring a file around the world is dirt cheap. The only reason these costs might seem significant is if the given environment has unnecessary overhead. This would be an example of artificial inflation of costs (whether for shipping or promotion). This too is not a strong argument against a system of tips.

  6. cliff Baldwin

    Artists create art, win GRAMMYS and Pulitzers and contribute to the growth of a great society. Waiters bring me eggs over easy. Are we really saying that an album in the seventies was worth tens of millions of dollars and now it’s not? Are we really saying that art has been so de-valued that it depends on tip jars and the kindness of strangers? I’d prefer an organized benefactor/caste system over this. Pretty sad.

    • dot

      Many of those individuals that served you eggs over easy are the same individuals, at a different time, that served you great music. Your tips helped that individual become an artist.

  7. Mr.Pink

    Most will feel less likely to tip a musician who is sitting on their comfy couch in their heated living room then they would a musician sitting out on the cold cement.
    Will musicians compete to see who is the most ourageous so as to get the most tippers
    What is the sites policy on inappropriate performances? It could easily devolve into pay per view porn webcam business.

  8. NoNotice52

    Unless you mean simply that they make enough money to keep from starving to death, waiters do not “live” off of tips. Beyond that, to even ask this question is an insult to musicians. Any clown with a high school diploma and no experience can walk onto the floor of their local Chilis and make $450 cash for 30 hours of work as a waiter. Put that same guy on stage with a guitar in his hand and a mic in his face and let’s see how much he’s worth. To be a professional musician and to write music that people might want to listen to takes a commitment that is no less deep or difficult than what it takes to be a tax accountant or an engineer. The reason nobody is asking why they don’t work for tips is becuase nobody has yet figured out a way to give away the product of their work to the entire world for free.

  9. ya

    point at which artists are at ~15 years into the digital music revolution: “begging for tips”
    next stop, coming in i’d say about two years: “let them eat cake”

  10. Yves Villeneuve

    I don’t work for tips, sorry.
    Maybe journalists and bloggers should live off tips.

  11. Jordan

    StreetJelly has a cool idea behind it. I am all for MVP (minumum viable product) when launching a tech startup, but their design is terrible. If I wasn’t landing on it becuase I read this article I immediatly would click the “back” button. It screams 1990’s and hurts my eyes.

  12. MartinC

    As someone from England who tours in USA each year I find the whole tipping system bizarre.
    I remember being in a bar in Orlando where the drinks were not cheap. Around me were Americans who all had at least 2 jobs to get a decent living and none had more than 2 weeks paid holiday a year. They were competing with each other as to who was most generous with the tips.
    meanwhile the owner of the bar was raking in a huge profit and the general feeling about him was “what a great bloke – he lifted himself from the streets and has made a million – USA is great”
    I thought that he should pay the barmen a decent wage, rather than let the hard working patrons of his bar pay them for him. He was laughing all the way to the bank.

    I was left thinking that the sooner there was a socialist revolution the better – Fox News won’t let that happen.

  13. John Pointer

    This is exactly the concept behind Patronism (see this article by Eliot Van Buskirk: .

    I launcehd it in 2010 after seeing how my own audience reacted to the idea of a pay-what-you-feel subscription. Rather than tipping pennies or fractions thereof per click, patrons use the pay-what-you-feel subscription to support their favoirte artist(s) directly at whatever level they feel is right for them.

    No one can tell you what music is worth to you, and it’s even more personal to decide what musicians are worth to you. Turns out that when you ask people the right question, the averge subscription on the site comes out to almost $12/mo.

    About 10% of the patrons on there support multiple artists. The site itself has patrons supporting the mission ) and the tipping/patronage from those people allows us to pass 85% of every dollar directly on to the artist. It’s not rocket science, it’s the renaissance:

  14. Stan Hintzy

    Have a look at Moozar, best user experience !
    Already 1700 artists in 3 months !
    Stanislas Hintzy
    Director of strategy & Business Devlopment

  15. steveh

    Scumbag Peter Sunde is STILL associated with flattr:-

    • YRUGraspingAtStraws

      A blog post, briefly explaining his founding of Flattr in relation to a recently released documentary, hardly qualifies for a strong, current association. Not that this is important either way..

  16. Jeremy Elliott

    So, what would happen if Apple & Google added “tip Artist” and “tip Writers” buttons to their UIs on their content apps? Pandora & Spotify, too? App owner keeps 5%, artist or writers keep 95%. Artists & writers are happy and allow reduced royality rates for mechanicals and performance to be negotiated. New revenue stream for content creators.

  17. Elda

    I think for the most part this article was misunderstood. Procurring tips online is an additional source of income for musician/songwriters and would probably not be the only source of income. And as long as the owners of these sites are honest and actually pay the musicians it sounds like a good service to me and another avenue for music to be heard and income to be supplemented.
    However it should also be required that the owners of these sites pay for the usual licensing to ASCAP, BMI etc. so the musicians also receive their royalties for the airtime ie. performance and writers rights.

    • dot

      Most of the sites mentioned in the article do not serve content, music, etc.