How To Make Money In Music: The Financial Realities

Explore the realities of how to make money in music, understand why many artists face financial challenges and how they can be overcome.

How To Make Money In Music

by Chris Robley of Reverbnation Blog

Is it possible for you to earn a living as a musician today if you aren’t a household name?

The short answer is yes, absolutely. But that doesn’t mean it’s a piece of cake.

Since you’ll be more empowered to succeed if you understand the state of music revenue in 2024, this article contain 13 truths about earning money as a musician.

Driving your own creative & business success at the same time isn’t easy.

You have to wear at least two hats well: artist and entrepreneur.

And in a field that evolves as rapidly as the music industry (which stands at the intersection of technology, culture, marketing, and more), you’ve got to stay on your toes.

Plus, many recent events have impacted artist revenue, including:

• Spotify royalty changes
• The acceleration of music creation (with 100,000+ new tracks released a day)
• Uncertainty around AI-generated and AI-assisted music
• Shifting trends in concert attendance, and the cost of touring due to inflation
• And more

So if we begin with the premise that success takes talent, knowledge, hard work, and continued curiosity, here are 13 things you should know right now in order to grow your music earnings.

13 hard truths about earning money in music

The point of this list is to help you see through a lot of the common confusions, and avoid the pitfalls that prevent many artists from making progress.

Some of these truths may sound obvious to you, and if so, great! They’re lessons you won’t have to learn the hard way. But believe me, even in 2024, they’re still things that many artists don’t know, or don’t want to accept.

1. Just because you made music doesn’t automatically mean it will make you money.

Music is not a scarcity! There are nearly infinite alternatives to your music.

The same way that new food products don’t just magically arrive in stores and fly off the shelves by themselves (it takes branding, distribution, promotion, etc.), you will have to work to create demand for your music. If you expect your music to generate revenue, that work doesn’t stop at the end of the creation process.

2. What’s good for the “industry” can be very different from what’s good for you.

Sometimes the music industry and individual creators have different needs and desires. And it’s easy to learn the wrong lessons from industry headlines.

“Indie music” as a sector may be healthier than ever, but you’re just one artist. You, ultimately, pay your own bills. Focus on what’s best for you and take headlines and quotes from CEOs with a grain of salt.

That being said, I think the recent LUMINATE report did a great job conveying big industry-wide stats while also telling a more detailed and encouraging story about lesser-known artists.

3: Making money from music is part mystery. It’s an artform, as well as a science.

What becomes popular is not predictable. What worked yesterday doesn’t always work today. Some geniuses go unrecognized. Your least favorite original song might be your biggest hit.

This uncertainty is part of what makes music so exciting. You never know when and where success might come from.

Use this to fuel creativity, and don’t be afraid to try new things. And as they say in marketing circles, “test, test, test.”

4: Make it easy for people to give you money.

Seriously. Are you… selling stuff? If not, your first problem is making things — music, merch, concerts, experiences — that you can actually sell to fans. 

Then you need to consistently create offers. Compelling offers. Next, communicate those offers. Send offer email. Post webstore links in your social bios. Announce merch at gigs. Sell merch on Spotify. And everywhere else.

Lastly, when you do make offers, you should give fans options. Not everyone wants a large black t-shirt, so have size and color alternatives. Certain people won’t go to public shows, but they’ll pay for a livestream. Some fans will pay you more for a VIP pre-show hang.

The point is: Many artists underperform on the revenue side because they just aren’t giving fans an opportunity to pay them.

5: Any deal an artist signs will have serious financial implications.

There is a time and place for record labels, managers, and booking agents. But all industry partnerships will have an impact on your earnings. Don’t wait until it’s too late to truly understand what those implications are.

Know what you’re getting yourself into. Not just in the near-term. Ask yourself, “What could this arrangement mean for my music in 25 years?”

The trade-offs could be well worth it. But ask the hard questions BEFORE you sign a deal.

6: Popular artists often have a skewed vantage point on the actual economics of streaming, but they have the loudest platform.

While there is much to be learned from popular artists, they can often give up-and-coming artists the wrong impression on certain aspects of the business, because they’re playing a different game at a different level. 

When someone famous talks about not earning any money from tens of millions of streams, keep in mind, you don’t know what’s happening behind-the-scenes and you don’t have THEIR label or publishing contracts to reference.

How much does their label keep? What was the artist’s advance? How many co-writers were on the song? All that and more can complicate the revenue situation, when compared to an independent artist who owns 100% of their publishing and recording rights.

Also, just because an artist is popular, it doesn’t necessarily mean they know how every aspect of the industry works.

7: Your personal preferences around music consumption might lead you to missed opportunities.

You might be getting in the way of more revenue, if you assume that all your possible fans behave just like you do. As an artist who also listens to music, you may have specific preferences. But you might not 100% match your audience in those preferences.

For example, you might assume no one purchases CDs because you only listen to streaming, whereas CDs are still a huge source of revenue for artists. You might only share a Spotify link, when 40% of your audience is actually on Amazon Music. Maybe you want to press vinyl, but most of your fans are more inclined to pay you for a digital experience.

The point is simple: Don’t assume everyone listens, engages, and spends money exactly like you do. Ask your audience. Take polls. Test the waters. And move in the direction that generates the most revenue. 

8: You (probably) won’t make a living from one song. Focus on building a catalog.

Most of the independent artists I’ve seen succeed over the years made a solid living because they built a sizable catalog of songs. This, of course, gives them more chances to create hit songs, but also boosts the amount of tracks that can be licensed, streamed, played at concerts, etc.

So every time they released new music, their fans could go back and listen to old stuff, thus with every new release came an extra wave of revenue from past material.

9. Your biggest opportunity might not be from simply “releasing” songs, but monetizing the connection you have with fans.

Don’t pin success (or revenue) entirely to the recorded music. We live in a social moment that thrives on engagement. Some of your best earning possibilities might arise from the fan experience AROUND your music, or from what they can do WITH your music.

Subscriptions, access, livestreams, lessons, and meetups. To say nothing of fan-generated content.

10. It’s the music “business,” so treat it like you would a job.

This is a challenge for most of us artists: We spend too much time dreaming and not enough time doing. I’m guilty of it too. We want a “career,” but the work? Not so much.

If you want your music to be a full-time job, time and effort must consistently be at the level you’d expect from a “regular” job. 

11. In order to maximize music revenue, you have to tell people exactly what to do.

As artists we struggle to give fans clear directions. But people need to be told, shown, guided. That’s the power of a big, bright button with an obvious call-to-action on websites or emails.

Some artists struggle to be clear and direct because we lack confidence in our music or offer. Others might feel like we look uncool or desparate if we ask fans to take an action. And for another set of artists, we just assume our fans know what to do next. But most of the time they don’t.

Always make an attempt to clarify the action you want fans to take, why it benefits them, how it’s important to you, and provide simple instructions on how to do the thing!

12. One viral video does not equal sustainable revenue.

Trying to engineer one massive, viral video hit? I mean, okay, that’s fine. You’ll learn something from the attempt even if it doesn’t get the reach you dream of. But most successful musicians didn’t put all their eggs in one viral video basket. Even creators who have a massive video hit don’t always have an obvious way to transform that attention into true fans and customers, let alone a full-time living.

Instead, most successful musicians who create a meaningful video presence did so because they established a sustainable process that was closely connected with their own musical identity, passions, and talents. It’s about momentum, and it’s about the right fans being there for the right reasons: Because they like what YOU do.

Don’t chase memes and trends. Find a more compelling way to be YOU on camera. And then slowly build your social marketing efforts around that. The ongoing process will likely have a greater impact than trying to engineer one viral video. And that’s the way to build an “authentic” social brand that leads to real revenue.

13. Just because it worked for Taylor Swift, doesn’t mean it will work for you.

Looking to superstars for lessons in success can be a mixed bag.

When Radiohead dropped In Rainbows for free nearly 20 years ago, every band wanted to copy the attempt. But they weren’t Radiohead. When Beyoncé released a secret album, everyone wanted to do secret albums. They weren’t Beyoncé.

When Drake released a hard drive with… (well, maybe don’t try that one either).

The point is: There are economies of scale at play with superstar artists. That means they don’t have to work as hard to incentivize fans to take action, because they’ve already put in the work to establish a close relationship with their audience.

What works for them might not work for you. But the opposite can also be true. You can take certain chances they can’t, and even capitalize on efforts that aren’t scalable at all! The realm of independent music is full of innovation, by necessity. You don’t have the name, budget, or team that superstars do. There may by ways to use that to your advantage!

Key takeaways

Here are four things to keep in mind as you pursue your music career:

• Prioritize activities that generate revenue – don’t just chase likes.
• Look for untapped revenue opportunities that align with your individual career plan and talents.
• Don’t blindly follow headlines or advice. Test assumptions, marketing tactics, and even creative approaches.
• And lastly, if you need help spreading the word about your music, use music promo tools to give your message a boost!

Want to learn more about your revenue-generating options as a musician today?

Check out “75 ways to make money in music.”

Bobby Owsinski is a producer/engineer, author, blogger, podcaster, and coach. He has authored 24 books on music production, music, the music business, music AI, and social media.