When a hammer manufacturer makes a hammer, this manufacturer expects to sell the hammer for a price that is appropriate for the market of hammers.
Someone who needs a hammer will pay for that hammer. If the hammer manufacturer sells enough hammers, he/she/it will eventually make enough to cover the costs of creation and the cost of living. The end.
The music industry does not work this way anymore. Some could argue, it never did. Musicians used to create an album and hope someone would want to pay them for that album. Well that’s the romantic statement that the streaming /free download naysayers exclaim. However, the hammer model never worked for musicians.
Before the internet enabled musicians to (theoretically) reach their fans directly, musicians would sign to a label. Musicians basically sold away all of their rights for the hopes of stardom (well this hasn’t changed). Musicians would create an album funded by the label. The label would then set a price for this album and sell it to retail outlets. The labels banked on enough people purchasing this album to justify the millions poured into the musician advance, manufacturing costs, shipping and marketing.
After the label covered every possible expense and recouped all the money it paid to the musician for the initial advance, they might pay the musician something. This usually didn’t happen until millions of units were sold. Courtney Love explained how a musician in a 4 piece band that sells a million records with a million dollar advance would have about $45,000 to live on. For one year.
Lyle Lovett, after selling 4.6 million records, has received $0 in sales payments from his label. Oh wait, I missed a decimal point. $0.00.
Label musicians have always counted on alternate sources of income such as tour revenue and merchandising to offset the lack of payment from their recorded music.
“I’ve never made a dime from a record sale in the history of my record deal. I’ve been very happy with my sales, and certainly my audience has been very supportive. I make a living going out and playing shows.”
– Lyle Lovett
There are countless cases of labels never paying musicians for successful albums after the advances. And after taxes, lawyer fees, management fees and recording costs huge advances only go so far. And labels don’t give out huge advances much anymore.
So What Are Musicians To Do?
Look towards multiple sources of income. Today, more than ever, there are ways to make money with music – as beautifully illustrated by these 10 musicians.
Concentrate on offering attractive merch items at EVERY SHOW (even – especially – local shows). Target your fan base with souvenir-like items (posters, t-shirts, vinyl records) that you can charge a lot for (like a $50 package offered on your website and at shows). Work on your on-stage sales pitch. Work on your negotiating techniques to make sure you get paid a good guarantee for private performances and get a decent cut of the door at venues. Establish yourself in your market – be it local to your geographical scene, or online in various niche communities.
Research licensing companies and pitch your music to get placed on TV shows (royalties!), commercials (even more royalties) and movies (err no royalties, but a lump payment).
Make sure you are registered to a Performing Rights Organization (ASCAP, BMI, SESAC, SOCAN, etc) and make sure all your songs are registered so you actually earn money EVERY TIME you play a live show and every time you have songs featured on TV shows, the radio, YouTube, Pandora, Spotify, Netflix, Satellite Radio, Jukeboxes and the like.
Make sure you are registered with Sound Exchange so you get paid from Pandora, Satellite radio and other internet streaming services.
Above all, stop bitching about how no one is paying you for your recorded music like they do a hammer and figure out how to make it work!