How Do Musicians Make Most Of Their Money

When touring came to a sudden halt in 2020, musicians found themselves in a bind.

Ticket sales from tours and playing live shows—one of the biggest revenue streams artists have in the modern music industry—nosedived almost overnight.

So, with live performances off the table, how can bands make money from music? The answer is focused around online income streams. And, even as live music returns in 2021, musicians can take advantage of the internet to make extra income.

While the ways an artist can make money online are only limited by their own imagination, here are a few ideas to get you started.

How musicians make money

Digital distribution from sales and streaming

The primary way musicians make money online is from mechanical and streaming royalties. That's a fancy way of saying revenue from online sales through platforms like iTunes as well as streaming income from Spotify and other services.

Using a service like DistroKid or CD Baby can get your music on Apple Music, Spotify, Tidal, Google Play, Amazon, and more, even without support from a record label. In addition to getting your music on these digital platforms (distribution), they collect royalties on your behalf from these services.

How musicians make money — You can look at detailed reports of your revenue sources in DistroKid, including streaming revenue by service and country. Image via DistroKid.

Most streaming services pay fractions of a penny per stream, but they have millions of users who may discover your music through playlists and more. Services like iTunes will take up to a 30% cut of your sales. Ultimately, you get more revenue from album sales. You can sell MP3s directly through your own online store, but consumers tend to not prefer them because they're harder to get on their phones.

Physical album and merchandise sales

In addition to physical record shops and shows, you can sell physical copies of your albums through your own website and webstore. ConvertKit integrates seamlessly with Shopify and other ecommerce providers.

Shipping records is time-consuming, but fans often want to support their favorite artists by purchasing their records and merchandise. Your band's merch gives you an opportunity to get creative.

In addition to shirts and hats you can explore other, less common goods. For example, some artists like Sadie Dupuis from Speedy Ortiz and Sad13 have branded their own spreads, hot sauces and tea blends in partnership with small local brands.

what's UP @Bandcamp day: Sad13's Haunted Hazelnut Spread from @lagusta 😉 Polter-Guys Pizza tote bag from the "Hysterical" video/@boy__ocean's brain 😉 last chance on @craftteaguy Haunted Breakfast tea, t-shirts and tanks, too (order those by tuesday) 😉 https://t.co/7nlD2NziSn pic.twitter.com/2fxHPOMeWW

— speedy ortiz ÷ haunted painting (@sad13) September 4, 2020

You can even bundle copies of your record along with merch like shirts, stickers, and more to encourage more pre-sales before your album comes out.

Performance royalties from radio

Earlier, we briefly mentioned mechanical and streaming royalties. But those aren't the only royalties available to you as a copyright holder of your music.

Firstly, if you're a songwriter, ensure you've signed up for a Performance Rights Organization (PRO) for performance royalties. In most countries, there's one PRO you can join. For example, in Canada that would be SOCAN. In the United States, you can join one of three: SESAC, BMI, and ASCAP. SESAC is invitation only, but BMI and ASCAP are open for all songwriters to join.

If you're wondering why we're talking about performance royalties for online revenue streams, we understand. But live performances in venues aren't the only way PROs pay their artists. They also pay artists from terrestrial radio plays, satellite radio plays, and even ringback tones on cell phones.

Your country's PRO should collect foreign royalties on your behalf, but you still might be leaving some money on the table. Songtrust and SoundExchange can sometimes find money that your PRO might have missed.

ConvertKit Commerce makes it easy for creators to get paid for their work and earn a living online without needing a complicated ecommerce website.

Sell digital products with ConvertKit

YouTube and Twitch tips and ad revenue

Once you get 1,000 YouTube subscribers and 400 watch hours, you can start to monetize your channel. Tips and ad revenue from your YouTube videos probably won't pay a lot of money (expect around $5 for every 1,000 views), but running ads on the videos you upload can add up and turn into a nice little revenue stream.

It's easier to get monetized on Twitch, but there are some downsides. Twitch really only supports live streams, and sometimes there are issues with them muting videos or playing stock music over live performances out of concern for obtaining the rights to use that music. Still, fans might enjoy watching and playing video games with you.

Tips —called Super Chats on YouTube and bits on Twitch—can only be obtained during live streams and video premieres, but there isn't a limit on how much people can donate. That means it's a great way for fans to financially support their favorite artists. YouTube does take more of a cut from these tips than Twitch, so you may still want to consider promoting a Venmo or CashApp to viewers.

Session work

Long gone are the days that you had to pay top dollar to rent a recording studio and hire a recording engineer to get your music recorded. Equally gone are the days you even have to be in the same room as your collaborators.

Talented singers and musicians alike can record stellar-sounding parts and participate in paid session work. Like so much of the music business, networking is key in getting these paid session work opportunities. Check online forums, Facebook groups, Twitter and more for paid session work gigs.

As for actually recording, you'll want to invest in a solid at-home recording setup. That includes a decent audio interface like the Focusrite Scarlett, microphones that are appropriate for your voice or instrument, a digital audio workstation (DAW) such as Studio One, and a DropBox or another file sharing service to get your stems to your collaborators.

There's a lot to understand and consider when recording session work at home, including sample rate, file format, resolution, and more. Ultimate Ears, the makers of the industry standard in-ear monitors, have an excellent guide about remote collaboration for musicians that walks you through everything you need to know about online session work.

Crowdsourcing and subscriptions

In recent years, subscription and membership platforms have become a boon to creators—including musicians.

Patreon allows makers like musicians an unprecedented opportunity to connect with and offer exclusive benefits to their biggest fans. You can set different tiers for your fans to support you. You can set tiers as low as one dollar a month and can set separate benefits or rewards for each tier.

ConvertKit Commerce is another great tool for letting fans of independent artists show their support on an ongoing basis and for artists to connect directly with their biggest supporters.

For example, you can offer supporters access to an exclusive Discord server at $5 a month, exclusive merch at $15 a month, and access to unreleased music at $25 a month. Ultimately, the tiers and benefits are up to you, so offer what makes sense for you to maintain.

Music lessons

You don't have to be in-person to give one-on-one music lessons. These days, teachers and students can connect via video chat services like Zoom or Google Hangouts. If you or your band members are known for your skills on your instruments or your voice, you probably have hobbyist fans who would pay an hourly rate for one-off or ongoing lessons.

If you can't commit to individual lessons, you can teach fans your songs by filming general tutorial videos for each of those songs. Instead of having fans purchase these lessons from you, you can offer those videos/lessons to fans for individual purchase or can give them to your Patreon or YouTube supporters.

Creating for music libraries

You've probably heard about stock photos—sites where other creators and brands can purchase licenses to use images in their own campaigns. Stock photo sites are valuable resources for those who can't afford to hire in-house photographers who can take high-quality images.

Well, something similar exists for music. Music libraries enable indie movies, TV shows, and commercials to purchase licenses for songs that they can use in their own projects. They're helpful for creative endeavors that don't have the budget to license hit songs like major motion pictures or cable TV shows.

When you upload your music to a stock music site, you'll be able to make notes about the genre, mood, instrumentation, and more to help your music show up in searches. For example, the music producers at a show like Lifetime's Married at First Sight may specifically search for "uptempo love songs" for their reality show. Ensuring that your songs appear in those searches can help you land placements—and get paid.

You probably won't want to put your album's songs up on these stock music websites. That's because you may be able to leverage those songs for bigger opportunities (more on that below). Instead, you can use b-sides or new instrumentals you don't think will make sense for an album and upload them to stock music sites.

Synchronizations

Music libraries (aka stock music libraries) are one way to get synchronizations, but they're not necessarily the most lucrative syncs. The more significant money comes from getting syncs the old fashioned way—by catching the ear of music supervisors for TV shows, movies, commercials, video games, and more.

These types of synchronizations are highly coveted and competitive, and that makes them rare to come by. So, how do you get these types of syncs? Many times, they happen organically. That means promoting your music like usual with the hopes that the right ear will hear them.

You can also pitch directly to music supervisors, hire someone to help you with sync licensing placements, or sign to a publisher who thrives with these placements. If you choose to pitch directly to music supervisors, be sure to update your EPK, including ensuring you've uploaded instrumental versions of your songs.

Sponsorships

Musicians used to catch a lot of flack for accepting sponsorships, but nowadays your most dedicated fans will appreciate that sponsorships are a pivotal way for musicians to make money online in 2021. However, it's important to make sure your sponsorships match your values. If it wouldn't make sense for you to advertise or sponsor something, you shouldn't do so just for the money. Though most fans these days are understanding that sponsorships help musicians thrive, it can still drum up controversy if it isn't a natural fit.

When you find those perfect sponsorships, you can incorporate those brands into your videos, mailing list, and your social media feeds. For example, you may be able to snag a coveted sponsorship with a boutique guitar pedal brand and feature them in videos showing exactly how you create your music. Of course, growing your email list and social followings can make you more attractive to potential sponsors. With that in mind, focus on audience growth while pursuing these types of opportunities.

Ready to start making money from music online?

There are a lot of tools online to help musicians drive revenue, including email marketing. A strong email list can get you more streams, sales, sponsorships, and more. Click to learn more about ConvertKit for musicians.