Making Money in Music: How Does It Work?

Making money in the music business isn’t as easy as negotiating on your salary and waiting for your next paycheck. The industry’s pay structure is based on percentages for freelance-style work and one-off deals. Still, a majority of the careers in the business are paid in different ways.

 

For this reason, the career you choose will impact how you make money in the industry. The money you make in offering electric and acoustic guitar lessons is different from how much you can earn as a manager or a performer. Some jobs in the industry will only command more money if respect has been earned inthe business.

 

What Jobs are Available in the Music Industry?

 

Music Promoter

Promoters earn money on ticket sales for the concerts and gigs they promote. There are two ways you can earn as a music promoter:

 

• The promoter agrees on a fixed payment with the musicians for their performance. Any money left after the costs is theirs.
• The promoters take a percentage of the proceeds from the show after they’ve settled the costs, paying the artists with the remaining money. This is called a door-split deal.

 

Music Manager

Managers get paid according to a set percentage from the income of the artists they manage. In some cases, artists can pay their managers via a salary structure. This often works like a retainer that ensures the manager will only work with one band.

 

This latter scenario, however, comes into play when the artist is making enough money to support themselves and have the right to demand the manager to focus on them only.

 

Sound Engineers

Independent sound engineers receive payment on a per-project basis, which can either be an on-the-road deal or a one-night agreement. In both cases, sound engineers will be paid for their service during the tour. Sound engineers who work with a specific company will most likely receive an hourly wage.

 

Music Agents

As an agent, you’ll take an agreed percentage of the fees from the performances you arrange for your artists. For instance, a music agent who negotiated for their musicians to be paid $1,000 for performance will take a cut from the $1,000 fee.

 

Music Journalists

Music journalists who double as freelancers are paid on a per-contract or project basis. If they report for a specific publication, they receive hourly wages or a salary.

 

Public Relations (PR)

Whether conducting press campaigns or radio plugging, music PR companies receive payment on a campaign basis. They negotiate for a flat fee for working on tours or press releases. These fees often cover the amount of time the company uses to promote the tour or product.

 

Music PR companies can also receive bonuses, should their campaigns be successful or go beyond the expected threshold. For example, the PR company will receive a bonus if the album sells more than a certain number of copies.

 

Musicians

What about the performers themselves? Musicians make money from advances, royalties, selling merchandise, licensing fees and playing live. Initially, it sounds like “big money,” but keep in mind that musicians have to split performance rights royalties and mechanical royalties with the people mentioned above.

If want to play other people’s music, consider being a session musician to earn additional income.

 

Best Solution to Make Money in Music

No matter what job you choose above, there is a simple solution to make more money in the music industry – which applies to all the jobs involved in music.

 

Complying with Spotify’s, YouTube’s and SoundCloud’s terms and conditions is the first step. By using these popular music services, the artist will gain access to a massive audience – 100 million Spotify Premium users, one billion registered YouTube users and 500,000 SoundCloud users who are looking for their next music binge.

Another benefit of investing in streaming services is that they don’t cost as much in terms of budget to self-promotion and marketing as required by publishing houses.

 

Give More to Receive More

Inspired music performers and agencies all over the world work on their marketing strategies to offer exclusive content to followers and fans more than what they used to practice in the past. Take the K-Pop industry for example; a wave of artists is offering more than just a CD. Each album also comes with handwritten lyrics, photo books, photo cards and more.

 

You can make more money in the music business in many ways; most of them come down to contracts and percentages. No matter what job you choose, everyone should be on the same page about the payments.

Find great subscriber-only accounting video and blog content on my Patreon page. Get your questions answered to pass the CPA exam, and to learn accounting concepts.

 

Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/