main_musicians_online_earnings

How Much Do Music Artists Earn Online?

Tuesday, April 13th, 2010

Recently, the UK government passed The Digital Economy Act which included many, perhaps draconian, measures to combat online music piracy (including withdrawing broadband access for persistent pirates).

Much was proclaimed about how these new laws would protect musicians and artists revenue and livelihoods.

But how much money do musicians really get paid in this new digital marketplace?

How Much Do Music Artists Really Earn Online?

This image is based on an excellent post at The Cynical Musician called The Paradise That Should Have Been about pitiful digital royalties. (Thanks to Neilon for pointing that out). I’ve taken his calculations and added a few more.

As ever, this was incredibly difficult to research. Industry figures are hard to get hold of. Some are even secret. Last.Fm’s royalty and payment system is beyond comprehension. (If you can explain it to me, please get in touch)

Note: these figures do not include publishing royalties (paid to composers of songs). The full spreadsheet of data does though. You can see all the numbers and sources here:http://bit.ly/DigitalRoyalty

If you have any experiences, data or royalty statements to share, please post below!


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Show Comments ( )

  • Czeslaw

    Let’s reverse the question: If it takes about 850,000 plays a month on Rhapsody to achieve this minimal goal, how likely is that? What’s the average number of plays per month for a typical song? If I’m a Rhapsody user (which I am — clumsy interface, but a boon to the breadth and depth of my music listening), how much should I reasonably be willing to pay per month for this privilege?

  • shmantiks

    I was curious in the sense of making sure I’m supporting my favorite artists..if I purchase an album (not a digital album) from let’s say amazon by way of an independent seller, does the artist receive a percentage from the sale?

    • Phil Soussan

      Yes the artist will. But the calculations are fairly broad. eg CDBaby takes a flat rate of $4 and the artist sets their own price, so anything over that goes to the artist. Amazon is variable depending on the intermediate vendor. Best place is to buy directly from the artist through their own website. Then they get 100%!

      thanks for your loyalty!

      • chopper

        did you used to play in ozzys band in the 80s

      • Lex Aevum

        I agree.
        Several big-name artists have recently separated ways with their old publishers and now sell both low and high quality files through their own website.

        A few years ago, Nine Inch Nails put Lights in the Sky up on nin.com in high quality FLAC and let you pick your own price.
        I had a pirated copy from about a week earlier.
        I got the FLAC version from nin.com and chose to pay $20 because I really liked LitS

    • http://www.BrendaJean.com Brenda Jean

      Speaking for myself, and I presume most self-producing independent artists (who serve as their own record labels): If you buy a used album from an independent seller, I do not get paid anything. (Recently I’ve noticed that free “comps” I sent to radio stations are showing up on Amazon. I get paid nothing from these presumably legal but ethically questionable sales. Please don’t buy them if you want to support an artist.) If you buy my cd new from Amazon, I think I get paid $7.50, which isn’t bad–I’d split 50/50 with a brick and mortar retailer, too. Like Phil said, if you buy from cdBaby, I pay only $4 of the sale price to them for processing and shipping (after set-up fee)–quite a good deal for the artist.But if you buy directly from my website (or at a concert) I keep 100% of the price, minus the $10/month I pay for my e-junkie shopping cart. This is the best way to ensure the artists you want to keep making music get paid fairly. Thanks for supporting the music you love, and the artists who make it.

      • http://weathervanemusic.org valerie rodden

        Brenda I would love to hear the opinion of an idependent artist on how Spotify affects musicians? I know it’s not economically beneficial, but would you say it’s completely negative? Does it help independent artists gain publicity that they wouldn’t have otherwise? Your input is greatly appreciated.

      • Priscilla Mgojo

        I am one of the new artist, and my stage name is “Wele Mgojo” signed a digital recording, now I can monitor how my music is selling compared with other artist, particulary at different stores. How can I get the Sales Report from different stores, in order to verify the sales.

    • Chuck Harrell

      Truth be told, it depends on whether you are buying a “new” CD (meaning you are its first and only owner) or a “used” (previously owned) CD from that independent seller. if they are selling a used copy of the disc, then no, the artist makes no money from that transaction. Only when you are in a “first time purchased” situation does the artist get the royalty or fee they are designated to get. Otherwise, you are dealing in “used” items, which the artist has been paid their fee once, and the exchange is pure profit (kinda) for the reseller. So if you are intent on supporting that artist, buying their CD ‘used’ does not help them. Buy it new, and they are still in the loop. (Keep in mind that simply buying it on or through Amazon does not mean the artist will profit).

      Does this help?

    • http://www.thesingingpatient.com Carla

      no the artist does not get anything if you buy it from an independent seller. If you buy it from amazon directly, yes.

  • Francis

    I am an artist i need help from u and i want to know how can i earn from your site thanks

    • Carlos

      use bandcamp, or similar, it is better for you

  • http://robertbrodrecht.com Robert

    What does an artist make on normal, over the air radio? That’s oddly absent, unless I missed something.

    • http://natanael.posterous.com/ Natanael L

      It’s hard to get proper numbers, but my calculations have shown that even Spotify pays more per song play and listener then regular radio. FAR more! (65 times more, actually, with the numbers I have access too. And that’s just an estimation and could be larger.)

    • Sarah

      Recording artists are not paid performance royalties for radio play in the US. Songwriters/publishers are.

    • Sarah

      That being said, I’m betting that the PROs in the UK have a convoluted system at paying out too since there are more people taking a piece of the pie.

      • http://www.thesingingpatient.com Carla

        We are *suuposed* to get $ when our stuff is played on the radio, but in reality we usually don’t.

        everywhere else in the world, the radio royalties are quite fair. it’s the US who has the convoluted airplay royalty system that stacks all the money to go to the big artists (e.g. Garth Brooks, Taylor Swift, etc.).

        This has been evened out somewhat by soundexchange, who collects royalties for digial play (some podcasts and satellite radio).

        It’s become nearly impossible for an artist to survive right now. Whatshisname thought he was screwing the big record labels when he created napster, but it’s the musicians he screwed.

        • wuwei26

          Only artists who can’t play live. Live music is immune to digital or distribution issues and it is really only relatively recently that musicians, or anyone else for that matter, believed they should be paid for stuff they did in the past…

        • guest

          artists artificially “woke up” about getting paid for past work, when the big companies & producers conceived that. Why? because they kept the same percentage as at production… something like 2% for the artist, 98% the company

  • cookie

    So in theory, it’s better for me to steal an artists album online, then wait to pay for it when I go to their show? Delayed returns, but at 100% vs. 10%?

    • Matt

      That’s almost what I do: I download some stuff from an artist, then buy a ticket for + album at their show — not necessarily the same album though.

      I keep meaning to ask an artist how they feel about this.

      • Brendan

        I love how you guys justify theft. It makes me chuckle.

        • Casey

          and i love how you whine about “theft”

        • limage

          i realy love too guys

    • http://thecynicalmusician.com Faza (TCM)

      It’s a nice theory, but it hinges on the assumption that said artist will play in your area on a date when you will be free to go to their show.

      Plus, of course, the full ticketing proceeds won’t go to the artist in any case, since they must split them with the promoter, the other acts, their booking agent etc. This is before we consider the fact that the artist has touring costs which will have to be paid. In reality, touring isn’t nearly as profitable as it’s held to be.

      The artist might only get a 10% royalty from the label, but they were probably paid a considerable sum in advance (that is: royalties on a volume of sales, before – and regardless of whether – they occur), plus the label financed the making of an album (treated as a further advance) and marketing it. Hell, if the artist is touring at a loss (which happens often), the label might take up the shortfall by way of tour support (another advance, since the touring is supposed to increase record sales). It’s not a perfect system, nor can it be considered totally fair (though it’s more a case of contractual fine print in matters of detail, rather than the very nature of the deal itself), but it has worked pretty well over the years and established artists are generally able to negotiate better terms.

      Summing up, nothing justifies stealing recordings. If the artist is on a label, doing so jeopardises that artist’s ability to continue their career (lack of sales means the artist will get dropped). If the artist releases the recordings herself, you’re stealing directly from her.

      If your concern is the welfare of the artist, buy the recordings and go to the show. Buy a T-shirt while you’re there.

      Faza
      TheCynicalMusician.com

      • http://www.thesingingpatient.com Carla

        well and indie musicians have a whole other batch of considerations. most indies put the creation of their cd (recording costs, graphics, mastering, duplication) on a credit card and have a big debt they’re carrying around. They don’t get an advance; they get the opposite. And they don’t have anyone helping with booking and publicity.

        If I like a CD, music, comedy, or otherwise, I buy it, so that the person has a chance to keep making them. Sometimes I buy the MP3 from itunes, which is not as much $ to the artist. But I do try to support because I am a fellow musician. And yeah getting royalty statements for $0.00 for airplay on spotify is annoying. As if a royalty check for $.02. Seriously? It costs them more to mail the check.

  • Bill

    This is a great example of how capitalism works right, if too few artist could provide the desired product at the existing demand level, then fewer artist would produce reducing the supply until the demand equilibrated the curent price until demand forced the prices higher. Thats why it is such a great system, it allows us to negotiate in a way where the most emotional plea does not always win. Not every artist produces a product worthy of supporting their lifestyle. In this case like many day job pays for the groceries the art happens in the other time

    • Eli

      “Not every artist produces a product worthy of supporting their lifestyle.”

      No, instead there’s unworthy garbage that gets rewarded enough to support hundreds of lifestyles. There are plenty of artists producing “worthy product”. But worthy product in market terms has nothing to do with quality or art.
      The system supports profit by any means, the quickest way of which is manipulating image and branding tactics to deceive masses into buying trends.

      • http://www.unfinishedscript.wordpress.com andthensome

        Like your name.

        Agreed. creating a trend and then riding it, that’s the name of the game for making money off of music in a capitalist economy. it doesn’t break out the the best of the pack (in some instances, it does) it just rewards “packaging” and marketing. Find something the kids like, make sure they are reminded over and over again as to why its great and move on to the next one. EXAMPLE: stock market… hence the chart that’s going around. Its all marketing, mass manipulation and who can get on the controlling side of it.

        A less capitalist economy would have a little more equal share in revenues, but I think that that may be the direction we are already headed in. I would have to cite the increasingly segmented genres these days, where there are so many niches that the money starts to spread out as more people become aware that there are more options available to them. We’ll see.

        • Inspector Fu

          “A less capitalist economy would have a little more equal share in revenues”

          A less capitalist country would see more of the profit taken by the government from both artist and distributor, therefore diminishing the incentive for both parties to do either. Artists make voluntary agreements to get distributed and exposed, and distributors have to make economic calculations as to best keep their business afloat while still attracting talent. When people have the economic freedom to do either one, competition arises, enabling more competition which is then more beneficial for the consumer. See also: econ 101

        • Sean

          @Inspector Fu, this is true. But somewhat of a reality in the US. The artists and distributors also have to pay an income tax, which can vary, but done by the book and without exploiting loopholes and various deductions, it averages about 30% for both the artist and the distributor (although this is far from reality for many, especially the larger businesses). That means overall, in each pie, the gov gets 30% of each pie.

          Furthermore, lets say an artist was able to make a “livable wage” from their music, and is their only source of income. They’d have pay their employment taxes that are usually paid by an employer.

          This also doesn’t include any sales tax that a local or state government may get from sales of physical goods. And in some states, there are working on taxation of sales of digital goods, including subscription like services. Luckily this tax isn’t taken from the sales income pie; it’s a cost burdened by the consumers. This does have the side effect of leaving the consumer with less money to buy more music.

          Overall, the government is taking in a great deal from the sales of an artist’s work. But where I agree with you Mr. Fu is that leveling the playing field with any additional taxes or market controls would make it a larger burden for everyone (artists, distributors and consumers) to even consider engaging in the enterprise of consumer entertainment.

        • James

          In an anarchist economy there would be no government and no corporations and musicians would play in return for what ever people wanted to give them; or in a feudal economy wandering minstrals would beg for donations of food.In a communist economy the muscians would probably work for the state, and get paid a salary…

    • http://www.thesingingpatient.com Carla

      yeah that’s not how art works. once in a great while the cream rises to the top, but sorry to say undiscovered genius is common and heartbreakingly cliche. As is crap on the radio by untalented people who got signed because they had great hair and a nice butt.

    • Maximillion

      What are you talking about?. All any artist ever asks for is a fair payment for their work. No one is saying they should be given money for producing something no one wants to hear. They are saying they should receive a fair royalty from a site that makes money from exploiting their music – when it is used and exploited. If you make something that someone wants to sell or rent you do actually expect to receive a fair recompense when that item is sold. That currently does not happen because the companies are dictating their own terms. You can’t just say everything is just capitalism at work. This is not about supply and demand it’s actually about restrictive trade, monopolies and unfair trading practises.

  • Pontus

    I am an artist, and I feel that I have to say that this information is far from correct.
    From Spotify, I receive $0.0043 per play, after CDBaby has taken their share. To make $1160, I need 1160/0.0043 = 269 767 plays. You are off by a factor of 15.

    I am not sure if it really is that much more difficult to get 270 thousand plays of a single song on Spotify than to sell 1100 retail album CD:s.

    • http://thecynicalmusician.com Faza (TCM)

      Spotify payouts are notoriously varied. Based on my own experience (which – unlike most of the above information – wasn’t what David was working with, since at the time I hadn’t received any money from Spotify yet) they can be anything from $0.0003 to $0.0085. The average payout per track over all the plays I’ve had so far is $0.0016. Which happens to agree with David’s independently conducted research.

      Since, like you, I am distributed by CD Baby and own full rights to my masters, I don’t have to account to a label and have only the distribution fees to worry about (the figure quoted above is net of CD Baby’s comission and represents the amount I’m credited with per play). Using this figure, we get just over 723,000 plays needed to generate the aforementioned $1,160. It’s a significantly lower number than David’s, but that’s because his factors in the label’s cut.

      As for what’s harder, I find it helps to consider the matter in one of two ways:

      1. The CD-to-Streaming ratio – how many times your songs must be played in order for you to make the same money as you would from a single CD sale. Assuming a $8.12 margin on a CD (sold direct-to-fan for $10, less duplication costs; a price of $12.12 on CD Baby gets you the same margin), you need a single fan to play your songs 5061 times on Spotify if they are to generate the same income you would get from them buying your CD. To put this in perspective, assuming an average song length of four minutes, that’s over 337 hours spent listening to your music.

      2. Streams per person – the 723,000 monthly plays can be achieved by a huge number of lister-stream combinations. If you have 100 people listening to your music, you need each of them to stream your songs 7230 times on average (482 hours listening each, under the assumptions above), a 1000 listeners means 723 streams each on average (which clocks in at a much more sensible 48 hours each) and so forth. Thus, a sufficiently large fanbase can concievably generate the appropriate play volume.

      But – and it’s a big but – when you have audiences of such size, monetising them through streams is the least sensible method (as many critics of the above calculations have pointed out). Just so we’re comparing apples with apples, don’t take the figure for retail CDs (that one assumes a label deal), but either one of the two DIY ones at the very top. The $8.12 margin per CD that I’ve used thus far only requires 143 sales per month, which may not be very easy, but seems much more likely to me than getting over 700,000 plays per month.

      I hope this explains the apparent inconsistencies.

      Faza
      TheCynicalMusician.com

      • LoOoNaTiC

        Graham Anderson has made an excellent point. (and happens to have taken his response in the same direction as mine). I have been recording songs through out my life. I never had ANY expectation of making a living from my music. That being said selling a CD is a one time sale much like a single concert ticket is. I think it is feasible that a site like Spotify or similar sites alike would have multiple playbacks of the same song by the same people over and over. If you then combine that with the newer integration in streaming sites with social networks there is huge potential for word of mouth and again more plays per song. So again I will re-iterate Graham’s question. How many listens do you need from radio air play to make minimum wage? I would add that based on nothing but speculation that sites like spotify would likely enable a band to generate listener revenue which would other wise be unattainable in the radio pricing model.

        • http://thecynicalmusician.com Faza (TCM)

          I’ve already shown just what the CD/stream revenue conversion is above – hundreds of hours per user. It’s possible that hardcore fans will eventually generate the same (or greater) revenue as they would from a CD sale, but it will take years to achieve. Years that an artist might not have, because present cashflow makes their career unsustainable.

          As for radio, it all depends on the station and country. Taking the lowest number I’m aware of, a minute of airplay on a local London station would generate something like $3.5 dollars (caveat, this figure is dated and hardly representative – since it’s something of a minimum, this doesn’t matter very much) in publishing revenue. Thus, a single play of a three minute song would generate a revenue of $10.5 and you’d need 110 of those to generate the aforementioned $1,160. Incidentally, each of those plays would reach a vastly larger audience than a stream (which might at best reach a couple of people listening to the same device).

          I’ve seen this being attempted before, so let me state outright: no, you aren’t allowed to divide the revenue from a radio broadcast by the number of listeners, when comparing it to streams. The standard is: comparing single transactions. One play = one transaction, regardless of how many listeners there are.

          Couple of endnotes:
          - The above is just publishing (songwriter) revenue and the station would also pay performance (artist/label) royalties. If you wrote and recorded the song, you get both.

          - The situation in the U.S. is pretty much unique in the whole world, since broadcasters only pay songwriter royalties, but do not have to pay performance royalties. If you are an artist based in the U.S., you should be lobbying your representatives in favour of the performance royalty legislation now being considered.

        • bob

          Faza (TCM),
          you mention the following:-
          “you aren’t allowed to divide the revenue from a radio broadcast by the number of listeners, when comparing it to streams. ”

          Why is that? i don’t follow.

  • Graham Anderson

    There is an argument that listening to music on Spotify isn’t analogous to buying the music from a record store – its more like listening to it on the radio. For the sake of completeness, how many listens would an artist need to get on FM radio to make minimum wage?

    • http://thecynicalmusician.com Faza (TCM)

      That argument is wrong and I’ve written about it in a follow-up post to the original.

      Short version: listening to the radio means you must listen to what they play – you don’t get to select the songs. Obviously, your satisfaction from listening is greater if you listen to only the songs you like and not those you hate, as well as when you can listen to whatever you feel like at the moment – as when listening to your CD collection.

      Spotify is a pure on-demand service – you choose what it plays and when it plays it, plus you aren’t forced to listen to anything you don’t like. The listening experience is that of a CD collection (or digital track library), not radio.

      • http://natanael.posterous.com/ Natanael L

        The listening experience of Spotify when you mostly listen to playlists others have made is very similiar to radio. Lots of people share playlists. Think of the Facebook integration where it’s like your friends and acquaintances become radio stations.

        When listening to radio I also switch stations alot, so I do NOT listen to what “they” want me to listen to. I choose there too, even if there’s less choice (I could always opt for internet radio with a bit more channels to choose from).

        The most fair comparison IMHO is to compare payout per listener and play. *With the same audience you get more from streaming the radio*. It is also harder to get your songs played on radio.

      • http://www.thesingingpatient.com Carla

        can I just point out that a lot of the stuff on spotify is mislabeled? I went to look up some comedy and stuff was labeled “George Carlin” and it was *not* George Carlin. Seems to be a big database with entries made by users, lots of errors. I suspect they took the files from limewire when it got shut down.

    • daveo

      It is impossible to say how many plays on FM radio to make minimum wage as one play on radio could reach thousands of potential cd buyers as opposed to a streaming always reaching one

  • http://qtp.blogspot.com Sachin

    OMG..I can’t believe that the royalties are so smaaaallll

  • http://www.asahramusic.net Kolai

    News flash: digital music is worthless. Expecting to make money from digital sales is the wrong idea. I don’t like it one bit but that’s the truth.

    Music is now something you give away free in the hope of developing a fan base and a certain degree of notoriety.

    You make money by leveraging this online clout: licensing deals, product endorsements, merch sales and live shows are the only things you can’t steal online.

    • http://oolong.co.uk Fergus Ray Murray

      …and yet, apparently ‘In the past 30 days alone, artists have made $512,979 USD using Bandcamp’. Granted, it seems that’s divided among 179,212 albums, but still – ‘worthless’ is maybe a little strong?

    • Priscilla Mgojo

      If an Artist signs a digital contract, what proof does one receives that verifies sales besides The Sales Analysis Print Out. Can one really trust a Record Company that just give out a Microsoft Excell Spreadsheet which can be easily manipulated? Please help me with advice.

  • http://www.informationdesign.net.nz Greg Comfort

    Debates over the accuracy of Dave’s figures aside, it still looks to me like the labels are screwing the artists. What’s changed? With iTunes, the so-called saviour of the record industry, the Napster and Amazon iTunes label/artist ratios shown above are undefendable.

    • http://thecynicalmusician.com Faza (TCM)

      There are various rationales advanced for the labels’ dominance with regards to profit splits and some are better than others. The best one is that while the label must put considerable cash up-front into making and marketing a release, only a small proportion of releases sell enough copies to make a profit – the figure generally quoted in 1-in-10. Thus, the successful 10% of releases must subsidise the making of the 90% of failures. Unfortunately, you cannot typically tell in advance just how successful a new release will be (you can base your predictions on the artist’s past performance, but hit artists will generally cost you more to produce and market; it goes without saying that new artists are always a gamble).

      In the context of digital music, the transactional margin is much smaller, so you need many more sales to make back the outlays on any release (which have tended to remain fairly constant). This also increases the risk borne by the label.

      Are the label/artist ratios fair? That depends on the deal. Are they totally indefensible? I wouldn’t say so.

      Faza
      TheCynicalMusician.com

  • http://stupid stupid

    this is a waste of time. if you’re so worried about your art paying for things for you than take this time to go produce much better art than whatever’s not paying your bills.

    • http://thecynicalmusician.com Faza (TCM)

      Which will be pirated or sold for a pittance. The problem isn’t that the product isn’t good enough (it may or may not be), but that the pricing is completely lunar.

      If your product is crap, you’ll sell few copies and end up with a loss – that’s fair game. However, what we’re looking at here is that regardless of how good the product is, the prices at the moment are such that earning minimum wages requires insane amounts of consumption. All that before we begin to consider what it cost to produce.

  • stupid

    and obviously signing to a label that is not your own is not going to make you loads of cash. why do people expect to get rich after they knowingly sign their careers away to a corporation?

    • http://thecynicalmusician.com Faza (TCM)

      In a word: advances.

  • BaCoNoDo

    I guess data can be debated: http://read.bi/gUln5o

  • http://oolong.co.uk Fergus Ray Murray

    The streaming figures are the only ones that give no clue what proportion of the money we spend actually gets to musicians – is that information available anywhere?

    • http://thecynicalmusician.com Faza (TCM)

      Depends on how the music got into the streaming service in the first place.

      If the artist is self-distributed, then the average payout for something like Spotify is 0.16 cents per play. Rhapsody is better at 0.9 cents per play.

      If the artist is signed to a label, it depends on the contract. Under older contracts, streaming would probably fall under some form of “other revenue” provisions (that is, outside the scope of standard label sales) and thus the receipts (i.e. the money paid by the streaming service) would be split 50/50 between the label and the artist.

      However, I wouldn’t be surprised if newer contracts lumped streaming under standard royalty provisions and thus the artist would be credited with something like 16-18% of streaming receipts.

  • http://www.slippersnet.nl Slippersnet

    HOW MUCH DO MUSIC ARTISTS EARN ONLINE? << "This question is wrong, it should be: How much do music artists earn with selling music online?" There are a lot of other ways for artists to make money online, aswell as it is also a way of advertisement.

    • http://thecynicalmusician.com Faza (TCM)

      Yes, but when you’re earning money through anything else than selling music, you aren’t earning it as a music artist. If you use your music to advertise your T-shirt line, for example, you aren’t in the music business – you’re in the clothing retail business.

      • http://www.cackblabbath.co.uk/ Iain

        Hi Faza,

        You not subscribe to the idea that the music will eventually become a promo that will allow a band to monetize it’s fanbase in other ways, as with Earache records releasing the last Gama Bomb album as a free download ?

        I’ve been interviewing bands for some features I’m working on and was surprised by some of the artist attitudes to their stuff being available on the torrent sites.

        Cheers.

        Iain

        • http://thecynicalmusician.com Faza (TCM)

          No, I don’t. The main reason is that the actual music is the most compelling product a musical artist has. “Monetising the fanbase in other ways” implies that there’s something the fans want that the band will be able to offer as its main product – the only musical activity, other than recordings, that qualifies is live performance, but that has its own set of major difficulties (for a start, it’s very hard to make money on the road).

          Everything else only caters to a small percentage of the fanbase (the last study I’ve seen on the subject found that only around 10% of music fans bought artist-branded apparel, for example), which implies that it’s much better business to market these items to people who are buyers of such items than to music fans. The savings on recording costs (and the cost of promoting recordings once they are made) is also something that cannot be ignored.

          At this point, ten years after Napster, I think no person who studied the issue in any detail can seriously entertain the thought that piracy and free (or very cheap) music can be good for musical artists in general (yes, there are exceptions, but they are just that). We can only expect even more fallout in the future.

          Faza
          TheCynicalMusician.com

  • http://makeyourbeatsrock.com/ Oscar

    Faza,

    You are right it only gets “worse” from here. I think the key is somewhere between Iian and Kolai where the art becomes the attraction that creates an irresistible draw to a more marketable (read sale-able for $) product… whether it is a concert, special release collection or whatever.

    Thanks for the eye opening look at the paltry pay of musicians.

    Oscar

  • http://aol dominique

    how much money can i get for a qaurter of a song.

  • Chin

    The greed of the old system is no clear. Music should be for talented musicians, not greedy peeps trying to make a quick buck on a basically amoral system. If this means a million musicians have to find real work, well too bad, you weren’t good enough.

    • http://www.thesingingpatient.com Carla

      and this is why van gogh sliced his own ear off. comments like this.

    • Maximillion

      The whole point of this post in the first place is corporations dictate how much money you get paid which turns out to be slightly more than nothing. If they paid a fair royalty the situation would be better for everyone. The problem is they don’t. Again these are not small companies they are owned by corporate multinationals who make a fortune including some of the biggest companies in the world. They just don’t want to pay what they should and people like Chin are defending the most disgusting behaviour even though they probably listen to music all day long. go figure!

  • Joe

    You’re so wrong. Artists can make the majority of their money from YouTube. For example, justin bieber makes over $8,000 a day from his videos combined.

    • http://thecynicalmusician.com Faza (TCM)

      And just how many views a day does he get?

      • Tilly

        How does one make money from youtube views?

        • http://thecynicalmusician.com Faza (TCM)

          Through the appropriate partnership program – essentially an agreement with YouTube/Google to split ad-revenue on your videos.

          Haven’t tried it, so I don’t know the details. However, knowing ad rates on the Internet, it’s unlikely that you make very much per view (see Last.fm or Spotify). It’s okay for folks like Bieber, whose videos are watched regularly by millions of viewers, but not much help for the rest of us.

  • http://www.pacoup.com Etienne

    Add Bandcamp to this! It’s better than all of the above-mentioned formats =D
    http://www.bandcamp.com

  • http://www.gizmocrazed.com/ liaqat

    solo artist just earn 1160 bucks per month? an artist performing in streets even earn more then that!
    very informational post by the way!

    • http://thecynicalmusician.com Faza (TCM)

      No. The $1,160 per month is a rough estimate of the U.S. minimal wage. The chart shows how many transactions you’d need in each category to make this amount.

      You could earn more if you sold/got streamed more. The thing is that many artists actually sell less.

  • Rcat2006

    I’m going to direct you to the idea of PRODUCING YOUR OWN ALBUM. Its this brilliant new plan that I found via a way of a metal band named Periphery. Their guitarist/producer produced the entire album from his apartment (because of technology, you can do an ace job at a very cheap rate), gave it to numerous labels as a finished product and told them “all we need is for you to distribute this”, held onto his masters, gets advertisement, overall makes more money, and doesn’t owe his label money usually needed to produce an album, and seems like a happier musician. Still busting his ass off, still has a loyal fan base, but needless to say, hes smart in his approach.

    • http://thecynicalmusician.com Faza (TCM)

      This is the standard way of doing things in Poland (where I come from), simply because labels generally don’t fund producing albums anymore.

      It’s actually no golden ticket – you’ll probably get less than if you distributed the product yourself (because the label’s cut will probably be bigger than that taken by CD Baby, for instance) and you still have to shift a considerable number of units.

      The main problem in this charts aren’t the artist/label splits, but the transactional revenue from digital distribution channels. In the days when CDs were the dominant format, an artist would probably be credited more by way of royalties (which would only be something like 15% of the album price), than they get now from a single digital download as a DIY artist. Yes, one’s a single and the other’s an album, but previously, a fan who wanted the single would probably have bought the album. Nowadays, they’ll just buy the single and that’ll be it from them.

    • http://www.lorendavidson.com Loren

      Actually, producing your own album only works in the greater world if you know something about good production. I know just enough about it to know that I need someone who knows more than me in order for me to get a good product in a reasonable amount of time.

      Unless you’re producing at a level that’s competitive with what the Big People do, your album will sound homemade. Which is fine if you are only selling to your immediate friends and audience, but will hurt you when you try to get radio placement, online or terrestrial, or to get into certain retail outlets. As this is a numbers game – the statistics above make that very plain – I don’t want to handicap my ability to get those numbers as high as I can.

    • Brendan

      This is harder than a lot of people think. Home recording has gotten cheaper and better but that doesn’t mean anybody can record their band, have it sound good, and get it out there properly. I have almost 10 grand in good gear and I while I am still learning I am nowhere even close to being able to to release my music sounding the way I want it to sound.

      Also learning all of this takes away time I could be practicing and writing.

  • Daniel

    The old profit model of the music industry is definetely dead but it has never been easier for indipendent artists to expose themselves. I know rappers who are leasing a href=”http://www.rapbeats.net” title=”beats”> on a regular basis and selling each month a new mixtape via Itunes. Their profit is way bigger then the deal they would have at one of the major lables.

  • durango

    as a former major-label artist who, because of a sizable fanbase, makes his living self-marketing and selling music online (and not touring, therefore, not really selling much merch), the only model of digital distro that works is the iTunes/AmazonMp3 format, which has been an absolute godsend to independent artists. if I sell you an iTunes download, it’s $7 directly in my pocket w no customer service hassle, but I don’t get your email address to stay in touch and possibly sell more in the future, so that sucks. if I sell you a CD from my website ($9 profit after shipping, manufacturing and credit card fees), I have to maintain the infrastructure to ship it to you, but I get your email address which is worth a lot.

    I’m sure Rhapsody and Spotify work for Madonna, but they pay me almost nothing, so if Spotify comes to the US I will take my stuff down (I’ve already taken it down from Rhapsody after a few years of experimenting).

    I do want to say, though, that if the ONLY people you are hurting when you download music for free are the musicians, and you shouldn’t kid yourself otherwise. the labels are just appendages of multinationals — they don’t care much whether their nickel & dime music business makes money. they will just pass the pain down to the artists.

    the artists pay in terms of support and promotion and budgets for making art, as well as money earned. people have no idea how incredible hard a young band trying to make it works, what they sacrifice and how much total nightmarish bullshit they have to go through to get their music out there and chance success.

    so if you want to support the music you love, do it with your dollars. if you don’t, because you can get it for free, well, I understand. but don’t fool yourself — you’re stealing. and if you like the music, you’re hurting yourself, because you’re doing your little part to guarantee there won’t be any more of it.

  • http://ugocapeto.blogspot.com electronica ugo

    well, in this day and age when most people expect music to be free, and that includes the artists themselves (a lot of talented people out there give away their music for free, well, maybe in exchange for an e-mail addy as nothing is really free in this world), it’s gonna be tough to make money from making music if you’re joe schmoe. It’d be neat to know the percentage of artists on cdbaby that can make a living off their sales though. My guess is .1% but i’d love to be wrong.

  • http://www.soleasatis.net/ solea

    You’re so wrong. Artists can make the majority of their money from YouTube ;)

  • http://www.acuvue-contact-lenses.co.cc mark

    Now so many want to be artist at youtube..=)

  • http://liquido.dk Liquido

    Great post and infographic. So what’s the best strategy for aspiring musicians in the digital world? I try to answer that question in this blog post:

    http://www.liquido.dk/index.php/10-digitalism/9-how-to-get-paid-when-everything-is-free

    I’d love some opinions on the matter!

    • Priscilla Mgojo

      How can an Artist prove the royalties paid are correct without having a detailed list of her/his sales record from the record company?

  • Dallas Painters

    Thanks a lot for this amazing article,
    It has helped me a lot, Keep it

    up, Thanks.

  • http://www.candypros.com Benito Westerberg

    , this is such a great website!!!!!

  • Jason Bourne

    You forgot to include “Download from Piratebay” which is what I would do if Rdio or Grooveshark did not exist.

  • Leslie

    Can anyone shed (credible) light on the different ways Rhapsody provides access to music? For example, as most of us realize, Rhapsody offers more than just streaming access. Do artists get paid differently if someone outright purchases and downloads song (not dependent on the subscription being current)? How about downloading for offline mobile access (expiring with their subscription)? Adds to his or her library for iPod/mp3 player access? Thanks.

  • mangadrive

    While the message behind this graph is pretty accurate in saying “Its hard to make a living from nothing but digital sales”, the math and logic behind this graph is entirely wrong. Its assuming the band is oppressed by some kind of financial slaughtering by a record label that you’d be an idiot to have signed in the first place. If someone is putting up those numbers and only handed the pennies they are seeing, THEY DESERVE IT. This graph is incredibly ‘worst case’. Again I’ll echo the fact that selling music is a hard task, but spreading this graph as the ‘truth behind it all’ isn’t a very good idea.

  • http://twitter.com/fakebook Tom

    What would happen if I played one song (like “Crazy” by Willie Nelson) over and over again on any of these streaming sites? Would Willie, Epic Records, and his crew make more money? Can we turn these streaming services into something like our own “American Idol” where we flood our favorites them with votes (click to listen)?

    Just wondering…

  • Tom Haslow

    This is sad for sure. But it is what it is.

    Touring, merch, licensing. Those are the ways an artist can still make money. In a way it’s a return to the way music has been for most of human history: people traveling around, playing shows. We must remember that the music industry in its modern form is only a blip of maybe 70 years, when large companies controlled distribution and production. I’m a musician and I’ve made a living from music, and as much as it is unfortunate that there’s no money in recording, the upside is that you have an incredible distribution platform in the internet where anyone who has great tracks can get noticed. You just have to be able to back it up onstage. If you can you’ll do fine.

    I think it’s also important to remember how few people actually have EVER made a lot of money from playing music.

    Oh, and excellent graphic!

  • Isaiah

    So Im wondering when you go to a artist Official Website and click on one of there albums to purchase and that leads you yo a place to buy. Do they get 100% of that sale from where you purchased it?

    • http://thecynicalmusician.com Faza (TCM)

      That depends on how the purchasing is set up on the site.

      Here are some options and how the split works:
      1. The purchase is handled through a third-party retailer, such as iTunes – here, iTunes takes 30% off the top and sends the rest of the money to the artist’s label (if it’s big enough to have a direct deal) or distributor. If there’s a distributor involved they may also take their share (unless they work on a flat-fee basis, like TuneCore), before passing on what’s left to the artist or artist’s label. The split between the artist and the label will depend on the contract in place.

      2. The purchase is handled through the artist’s distributor, via a widget, for example – here, the distributor would be first in line to get paid (taking any commission off the top), with the rest going to the artist or label (artist/label splits being subject to contractual terms, as above).

      3. The purchase is handled by the artist directly – here, the artist (or the artist’s label) has built her own payment-handling and fulfilment mechanism. Few artists do this, since it requires them to shoulder additional costs, but is certainly possible. Since there are no middlemen involved, the full sum of the payment goes directly to the artist or label. Once again, if a label is involved, this money will be split according to the terms of the contract.

      As you can see from the above, an artist will only receive 100% of the sale price if they handle the payment themselves (or go through a flat-fee distributor that doesn’t take a percentage) and are not working with a label.

      However, we shouldn’t get too hung up on percentages, since what really matters is the absolute revenue the artist receives. 35% of $0.99, say, is more than 100% of $0.0016.

      Faza
      TheCynicalMusician.com

  • funstar22

    With iTunes, generally not much if your not a big name. The best way to earn is by requiring fans to view a series of ads before they can download an Artist song. All musicians and artists, need to check out sites like socialmusic.com and hulkshare.com. Social Music pays more, but Hulk Share is 2nd best.

  • Lina

    I never hear about a service called eMusic..it’s been around abut 10 years. The prices have gone up in that time, but so has the quality of their cataloque. And once you buy a track, it belongs to you. No problems with DRMs.

  • Krunk

    I found the premise of the chart a bit deceiving as you’re comparing it to the monthly minimum wage. In other words, the chart is saying by recording and distributing a few songs, an artist should be making at least minimum wage w/o having to do anymore work.

    Nevertheless, the data was interesting. Thanks for sharing.

  • Reno Contact Lneses

    Wow…. kinda depressing, but at least it is a work once, get paid for a long time kinda situation. It buys them a bit of time to work on their next project.

    • http://www.thesingingpatient.com Carla

      doesn’t buy the the time if they never reach those numbers, which most bands do not.Those are insane numbers.

  • Permanent Makeup Ren

    I wish my band’s CDs sold at a minimum wage level….

  • Henry

    Just to add to the conversation

    [ ] some people, like myself, often choose not to buy cds because they don’t want to keep lugging stuff around.

    [ ] I’ve also stopped buying digital music or ripping CDs because I don’t want to store more stuff on my computer/mp3 player. Cloud is the future, like netflix, hulu, vudu.

    [ ] When I do buy hard cds it is directly from artist that come to town or are from here. They also get concert sales, tshirt sales, etc. from me.

    [ ] Spotify allows me to find music from artists I never knew existed, Many of them aren’t performing any more. I would normally not buy their cd (storage again), so I think streaming is a good option

    I agree the Spotify model may not benefit all artists, but some artists may benefit from new fans. Imagine going to a new city or country and having more concert-going fans. Perhaps the pay scale will get better as more people like myself subscribe.

  • http://brentalfloss.com brentalfloss

    As an indie musician on iTunes, Amazon, and Spotify, I’d like to see the same chart done for people with no label to worry about. Either way, though, it does show you how the Spotify mode is a downgrade for the artist.

  • http://www.palmrocksongs.com Chris de Palmer

    Revenues generated by streaming services are far from being negligible.

    In a white paper I’ve built-up, I’ve found out that 1 000 euros monthly revenues require 7 500 true fans for labels or 42 000 true fans for singers/songwriters, being understood that true fans use a monthly paid package from streaming services companies like Spotify or Deezer.

    And that the revenues from streaming services are equivalent to those obtained with downloads after 3 years.

    This white paper can be freely viewed or downloaded on palmrocksongs.com/publications.

    • Ian Curnow

      I read the Music 2.0 White paper, and whilst I’m sure it is generally well researched and information there well founded, but I found 2 inaccuracies in there that I know from my own experience in the music industry to be wrong:

      - Publishing deals are never 50 / 50 these days, normal would be anywhere between 70 /30 and 80/20 (in the writer/s favour)

      - Traditional record deals don’t typically give the artist 8%, the figure is more like 15%, which rises if the artist is established and renegotiates. This has been so for many years.

      Nothing against the White Paper, I just felt this being a place of public record the facts should be correct.

      Thanks.

      • Maximillion

        That was the case 10/20 years ago but right now Getty publishing offers 65/35 in Getty’s favour and publishing splits are increasingly going backwards towards 50/50 with lot’s of companies. It’s also rare for a modern artist ie signed this century to get more than 10% on the sales which are non existent anyway. Companies like Getty buy up other publishing companies and then inform you that your spit has reduced and it’s take it or leave it. You are also more likely to have to sign a 360 deal across all income streams if you actually get a deal today..

  • Joe

    When you’re a signed musician, you get an advance. Basically, you make sure your advance is large enough because this advance is probably all you will ever see. Bands have to “recoup” the money in recording, and usually there’s convolution between the recording artist and the label in regards to how much the band was “in debt” for the recording. Bands only get pain AFTER they “pay back” the advance.

    Also please note this is for a solo musician. If you’re in a progressive rock band with 2 guitarists, a bassist, a singer, and a drummer, that’s 5 people, so to make the average between all 5 people you have to multiply everything by 5. Selling 5,000 albums a month is difficult for non-touring bands.

    You should stay independent as possible. Most bands that go from independent local bands break up before they have the shot at touring because one of the five guys has a career and they can’t leave for a tour, which pretty much kills the band especially if that guy is the creative center.

    Bands/music is terrible. Do it for fun.

  • transitaire bangkok

    Music should be for talented musicians, not greedy peeps trying to make a quick buck on a basically amoral system

  • http://www.spotidj.com SpotiDJ

    Maybe it is time to update your info. Spotify payouts increased to 0.57 cents in the meantime. Time to deflate the big bubble!

    Check this blogpost for details.

  • Morgan

    Comparing album downloads and streamed plays is like comparing apples and oranges. This chart seems biased at best.
    First of all an entire album has about 12 tracks, so divide by 12…
    Second if it’s a good album I play it at least 12 times, so divide by at least 12…

    High end retail record deal gives $1 to the artist (according to this chart).
    $1/144 = $0.00694444444444444 per play…

    Low end retail record deal gives $0.3 to the artist (according to this chart).
    $0.3/144 = $0.00208333333333333 per play…

    I estimate that I listen two hours on average each day. (~30 songs).
    That gives 900 plays per month.
    I currently have the $5 subscription.
    $5/900 = $0.00555555555555556 per play to Spotify…

    So with Spotify paying $0.0016 per play they still end up on the low end, but not as hilarious as this chart shows.

    Thats my $0.002…

  • Cody

    The music business is no longer the business it once was; the annual revenue statics bear that out. We decided never to be signed by anyone because we would not get paid. Instead we use services like
    notemote which is an online marketplace that only collects revenue upon the sale of an item, giving us a far greater chance of boosting our visibility/sales than anything else we stumpled upon. We also use CDBaby.

    What’s great about notemote is that they do not charge anything for their service until we actually sell a CD and then it’s nominal at most.