Want to make more money with music? Here’s how. (pt. 1)
To make more money with your music, you need to know the 12 key concepts successful musicians understand and use to generate revenue.
One of the key discoveries from our music business research over the years is that musicians who are successful at making a living off music approach their business and art differently than others. Rather than focusing solely on selling tracks or playing live, they broaden their thinking and work to create more income streams off of what they do.
As authors of The Indie Band Survival Guide and the creators of CreativeLive’s “Making Money With Music” course, we’ve taken the best elements of these successful musicians’ approaches, combined them with proven business models, and ended up cataloging hundreds of different ways for musicians to make money from their music. But even this list can be boiled down to a few key concepts you can use to improve the amount of money you make with your own music.
Here are the first six things successful musicians understand about music income that you can implement to make more money with music and build a sustainable music career. (The next six will come in part two of this post!)
1. Put on your business hat
Perhaps the most common hurdle you as an artist need to overcome is changing your thinking between being the artist who creates art with integrity and the business person who needs to keep asking, “How can I make money off of this art?”
Psychological experiments have shown the human brain has a hard time switching between these two modes. One perspective will usually stifle the other. Although the same creativity musicians put into their art can and should be used to come up with new business and promotion ideas, some musicians work with managers to handle the business aspect so they can focus exclusively on the art. The key is to recognize the distinction between these two roles and adjust your line of thinking – or find a person that can fill the business role.
2. Draw on multiple sources of income
There isn’t a single successful musician, band, or DJ we’ve interviewed who relies on just one source of income. The most successful create a set of combined music-related revenue streams to build a stable business. Until they hit that point, it is sometimes necessary to supplement income in other ways, such as a day job.
Considering that most shows happen at night, and musicians can record music during evenings and weekends when not at a day gig, it’s possible to transition the base of their business from non-music revenue into music-related activities as your audience and business grow. This concept isn’t unique to music: this is how many non-music start-ups begin. Many musicians give up or fail because they don’t have enough income sources. When they lose any of them, their business can go under and force a change.
3. Leverage parallel income sources
Related to drawing on multiple income sources, there are many income streams that can be done in parallel with one another. Parallel income streams don’t interfere with each another – more often, they enhance one another. For example, when playing a show, an artist can leverage the following income-generating activities all at the same show:
Each of these possible sources are parallel and even enhance the others. And this isn’t just the case for playing live. You should always be on the lookout for new revenue streams to add so you can maximize your earnings from your audience.
4. Understand active and passive income
You make active income when you trade your time directly for money. This includes any job where you’re getting paid an hourly rate or doing business that requires your presence, such as playing live shows. Passive income (sometimes called “mailbox money”) comes to you even when you’re sleeping: for example, when you receive royalty checks for a song you’ve written that’s played on TV or radio or you receive checks from digital and physical distribution sales.
Active income is easier to generate at first but has the downside of closing off when you’re not actively generating it. Passive may take some advance work, like registering your music or pursuing licensing opportunities, but once it’s done, it generates income without additional work on your part. Successful musicians cultivate income streams that are both active and passive.
5. Establish stable sources of income to support your “irregular” sources
Passive income is often irregular. Your album sales may not be the same month to month, YouTube views will fluctuate, and your downloads may dip next quarter. A good music business is built upon income sources that are both stable and more in your own control – usually active sources of income that are more reliable – and passive sources. Provide a good mix that can create a livable income.
6. Register your music to get royalties
Your music is out there in the world getting played and listened to. Each play generates income, but only if it’s registered. It can have the biggest upside for you if a song of yours gets popular, goes viral, or blows up. Perhaps the best part of this passive stream is you only need to register each song once and it’s covered for life, so don’t miss out!
You’ll want to register every composition you write with a PRO (such as ASCAP, BMI, or SESAC), both as a songwriter and as a publisher. You’ll also want to register each sound recording with SoundExchange. Plus, register each sound recording with ContentID to make income off of YouTube views. Skipping these few hours of work to get your recorded music registered is simply leaving money on the table.