If you don’t have time to read what follows, here’s the TL;DR version:
- As you are undoubtedly aware, for the vast majority of professional musicians (let’s say 95%), income earned from recorded music (most of it which comes from streaming services such as Spotify) is and shall continue to be negligible:
According to CNBC, artists can expect to earn between $0.006 to $0.0084 per stream to the holder of music rights. However, according to some data from Information is Beautiful, it puts that number even lower at $0.00437 per play. So doing the math, a 1000 streams would translate to roughly $4.37. This was one of the lowest amounts paid by companies. Of course, this is nowhere near as bad as what YouTube gives at $0.00069 per view.
- Because of Covid-19, playing a sufficient number of live shows to earn a living shall no longer be a viable option in the near future. Moreover, there is no guarantee that an effective vaccine will ever be developed .
- Consequently, if the cost of your living expenses exceeds your income from music, pursuing a career as a full-time professional musician is tantamount to committing financial suicide – unless you have significant financial resources at your disposal.
- Because of the aforementioned reasons, being a professional musician may only be a viable career path for those who have access to financial resources sufficient to finance said music careers. That is, a music career may very well end up being available only to the scions of the wealthiest 10% of society
Now, what follows is a more detailed analysis of my TL;DR summary…
Musicians Have Always Struggled Financially
In fact, this has been the norm throughout history.
For example, the financial struggles of many famous classical music composers is well known. Here is an article published by the BBC that provides a good overview.
Within the world of popular music, prior to the early 1970s: (1) it was the norm for musical artists to be employees of their managers, rather than the reverse; (2) concert promoters got 60 to 40 percent of the gate, which was a hefty amount of money in view of the fact that they really didn’t do anything to justify this level of compensation.
Consequently, in the period prior to the early 1970s, musical artists could tour endlessly and cut records and still end up with very little money to show for their efforts.
This all changed once Led Zeppelin came on the music scene and became the biggest musical act in the world during the 1970s. Because of Zeppelin’s huge popularity and due to the efforts of their now legendary and infamous manager Peter Grant:
- Zeppelin were able to get 90 percent of the concert gate, leaving the concert promoter with just 10 percent, which was unheard of back then.
- For his time, Grant had an extremely enlightened view of the manager-artist relationship: the manager worked for the artist rather than the reverse. Grant charged Zeppelin a 15 percent commission rather than keeping all the money and retaining the artist as his employees, which was the norm pre-Zeppelin.
The above business arrangements eventually became industry standards, and for the first time in history, musical artists were able to keep most of what they had earned.
However, starting with the creation of Napster in 1999, earnings from recorded music started to dissipate over the subsequent 20 years to such an extent that the only way for an artist to make living was through playing live shows and the attendant sales of concert merchandise.
And now with the advent of Covid-19, live performances have come to a halt, with no end in sight.
In other words, with the exception of a tiny sliver of artists, musicians are financially struggling yet again.
For a brief period between the early 1970s to the mid-2000s, musical artists were able to earn at least a decent living, but things have now reverted back to the historical norm (i.e., financial poverty) for the vast majority of them.
A Career in Music Will Only Be Available to the Wealthy
This brings me to an uncomfortable conclusion: a viable career as a musician may only be available to the scions of the wealthiest 10% of society.
If you cannot earn money from recorded music or live shows, you’ll need access to financial resources to fund your music career. The money to pay for your music lessons, musical equipment, recording equipment, studio time, etc. will have to come from someplace.
And that “someplace” will be from family money. Take the case of Taylor Swift. Here’s an excerpt from a 2015 article from Salon magazine:
Over the last few years, Taylor Swift has become one of the two or three biggest pop stars in the world. She has accumulated no fewer than four homes (including a $3.5 million place in Beverly Hills and a $20 million Tribeca penthouse) and drawn enormous press and media attention. She’s still on the cover of lots of magazines and we’ll probably see her there far into the future.
Like a lot of country singers – that’s how she first broke in – Taylor Swift grew up on a farm. It wasn’t a subsistence farm in the rough part of Kentucky but a Christmas-tree farm in Pennsylvania. “Her mother worked in finance,” a New Yorker story says, “and her father, a descendant of three generations of bank presidents, is a stockbroker for Merrill Lynch. (He bought the tree farm from a client.)” In Swift’s hometown, she told the magazine’s Lizzie Widdicombe, “it mattered what kind of designer handbag you brought to school.”
So let’s acknowledge that she began life with a slight leg up on the privilege escalator. But the playing field is about a get a lot less level: “When she was ten, her mother began driving her around on weekends to sing at karaoke competitions,” the New Yorker tells us. “Then she persuaded her mother to take her to Nashville during spring break to drop off her karaoke demo tapes around Music Row, in search of a record deal; they didn’t succeed, but the experience convinced Swift that she needed a way to stand out.”
When Swift was 14, her father relocated to Merrill Lynch’s Nashville office as a way to help dear Taylor break into country music. As a sophomore in high school, she got a convertible Lexus. Around the same time, her dad bought a piece of Big Machine, the label to which Swift signed.
Here’s what I would advise you to do if you’re a budding musician considering a full-time career in music: get a formal post-secondary education in something practical such as business, particularly accounting and business law. You can always get an education and still practice your musical craft on a part-time basis while pursuing your degree.
The benefit of doing this should be obvious: if you do actually find some financial success in your music career, knowledge of finance and the law will help prevent you from being ripped off.
On the other hand, if you don’t make it as a musician, you’ll at least have a formal education to enable you to switch careers into something more financially stable.