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How Much Do Musicians REALLY Earn Online?
This article is a response to a spiffy-looking but misleading chart about “how much artists earn online” on ‘Information is Beautiful’. Although the thinking behind the statistics and pie graphs are sound to a degree, the fact a non-musician prepared it is painfully obvious when you consider something major that has been excluded from the equation: the cost of making records.
The ‘retail album CD’ entry aimed at ‘lucky’ artists signed to major labels seems accurate enough. The whopping $1 per record in royalties is in line with the figures in Donald Passman’s “.” Keep in mind that is a best case scenario, “high end” royalty deal, not the crappy deal chumps like you and I get. All You Need to Know About the Music Business
The sections that stand out as flawed are the ‘Self-pressed CD’ and CDBaby ‘CD album’ which pertains to unsigned artists (and likely 99.9 percent of people looking at the chart).
Sure, you’ll need to pay a duplication company to press CDs and cover the costs to get listed on iTunes via CDBaby or Tunecore. For many independent artists those fees or roughly $2 to $2.50 per disc are such a small part of the equation that it’s an afterthought. Yet that is the only cost the ‘Information is Beautiful’ chart puts into account.
Is the balance of $7.50 to $8 really all profit? Not likely.
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Unless you are recording everything in the basement without any professional help whatsoever, making a decent recording isn’t cheap. Even assuming you play in a band that never spends a dime on anything but the absolute necessities; you still need to account for the money you’ve spent on gear.
Instruments, mics and recording equipment are notoriously expensive; especially in relation to the incomes of most working musicians. If you are aiming to make a profit from musical projects, you need to start looking at even the small things, like guitar strings, drum sticks and vacuum tubes. Most musicians probably don’t want to add it up because in all likelihood they are either losing money or making the same wage as pimply teen cashiers at Taco Bell.
Indie bands or artists that have sought a more polished sound by using the services of audio professionals and session musicians are in the worst boat of all. Before you make a dime off a record you need to recoup production costs. Using the math in the chart, a solo artist that opted for an engineer, session musicians, mastering services and album artwork might have racked up a bill of $20k and therefore has to sell 2,500 CDs just to break even.
The chart sets the income bar shocking low. Calculations are based on the number of CDs, downloads or streams need to earn a U.S. monthly minimum wage of $1,160. Bands will need to divide the figure by the number of members in the band, making the earning prospects downright appalling.
On a more positive note, there are online revenue streams not mentioned that any artist would be crazy not to take advantage of. Many musicians rely on t-shirt sales and posters to supplement on the income on CDs. Also, if you have a presence on Rhapsody, last.fm and Spotify, you’ll be earning royalties from all of them simultaneously.