PG thought this was an interesting look at how musicians make money from the songs they write, record and/or perform.
From The Trichordist:
This is directed at young musicians. I already made my money. Further I have recurrent rock radio hits that generate revenue if I just sit at home and do nothing. Seriously. In many ways I don’t really have a dog in the fight so to speak. . I just want to let all those young bands out there touring what the economics of streaming really mean.
There will be no middle class or niche ensemble music unless streaming revenues increase. Flat price per stream revenue is a net transfer of wealth to top artists and streaming platforms.
. . . .
IMHO eventually the only albums that will be made at a profit, are albums one or two people record on a computer and are oriented towards pop markets. More interesting ensemble albums will be made but they will be made at a loss. Or not at all
But many argue that records are loss leaders for touring profits. Interesting thought. Unless you do the math. For 95% of even successful artists there really isn’t much profit. And never mind touring doesn’t compensate songwriters.
. . . .
It amuses me to no end when people suggest that artists can make up for recorded music revenues with live music revenues. These are people who obviously know little about the live music business. I’m sure the top 1% of touring artists can. But for most middle tier bands this is not a reality. The main reason lower level artists tour is that it is the most reliable way to stimulate sales of recordings! That’s what actually supports the middle class artist.
But there are other issues to be considered before comparing live revenues and recorded music revenues.
First of all: recorded music revenues are largely “net” while live music revenues are “gross.” You can’t equate revenues before expenses with revenues after expenses. Apples and oranges (*ahem* NY Times Magazine). D’oh!
Sure most midlevel artists (like my bands) will have about two dozen top markets where they play for 500-1000 people a night. And we strategically place those on a weekends. And yes you can make $500-$800 per band member on shows like these. Ultimately you have to consider that these are just a small percentage of the shows that a mid level artist plays each year.
The other 80-90% of shows occur in lower population secondary and tertiary markets Sunday through Thursday. These shows naturally have much lower attendance and challenging cost structures So even a band like my own with multiple radio hits that does 600 paid in Boston, 800 paid Washington DC and 1000 in San Francisco has totally different economics on the other 80-90% of shows that make us a full time band. No offense but places like Wichita KS and Syracuse NY? 200 on a Monday night in a rock club is actually pretty respectable. Don’t believe me? Just look at pollstar.com. Check data for club capacities for your favorite midlevel band. Or pay for an account and you can see the actual ticket sales.
Sure we could skip these lesser markets and keep going back to our top 25 markets, but eventually you saturate and kill the golden goose. Play in NY four times a year and suddenly you’re drawing 1/3 attendance. Playing in NY Every 12-18 months maximizes attendance. So really bands like mine have two choices. Play only part time (like Camper Van Beethoven and have other jobs) or play secondary, tertiary and break even foreign markets where you eek out minimum wage the other 80-90% of the year. Why? To sell albums, generate airplay and sometimes a sync licenses. Cause those artist royalties, mechanical royalties, public performance royalties are what is really supporting the band.
. . . .
In the relatively fair North American market ( assume it’s worse everywhere else especially in UK).
Buy ticket: $22-$30+taxes Ticket face value $20
Ticket Charge $2-$10 bucks 50% to venue/ 50% to ticketing agency 0% to artist.
$20 Face Value
$8 (40%) goes to venue (rent/security/staff/pa/lighting/promoter profit)
$12 (60%) to artist. But this is artist gross!
Then artist pays.
$1.20 (10% of 60%) to agent
$1.80 (15%of 60%) to manager
$1.20 (non-resident state withholding tax average 10%)(Grrrrrrr… total government rent-seeking activity).
$7.80 (39%) adjusted gross to artist on every ticket.
Then the artist pays crew, transportation, hotels, fuel, meals, insurance etc
Let’s look and see how that works.
Take moderately popular middle class touring band. Bare bones. 4 band members and two crew. 200 paid on a monday night in Tulsa OK. $20 face value on the ticket.
Artist adjusted gross $1560
Typical daily expenses.
$300 2 crew salaries (low ball!)
$150 van/trailer rental or depreciation (300 miles a day) + insurance
$450 hotels (two star or lower)
$150 meals or per diems
$100 amortize misc/overhead (supplies, accounting costs, tax filings in 40-50 states, repairs, storage, rehearsal space etc etc).
$210 amortize day off /travel days (6 days on 1 day off)
$1,450 approximate daily expense.
Each band member (4) makes $27.50 before tax. or 0.7% of face value of each ticket.
Sure the band members might make $500-$800 bucks a show in their best markets on a friday or saturday night. But if you are very lucky that’s 25 shows a year.
The other hundred shows a year look like this.
Link to the rest at The Trichordist