You’ll Be Shocked At How Little Artists Get From Their Music

If you want to have a steady career, being an artist is not your best bet, and entering an artistic career should be done so out of love and passion rather than out of any practical consideration for how much money you make. To drive this point home, just take a look at how much music artists actually make from their music. Sure, the top names are earning unimaginable levels of wealth, but the average artist is living off scraps. This may have always been true to some extent, but the digital revolution in music has exacerbated the divide even more. How can this be when the music business is flush with cash? According to Citigroup, Americans spent more than $43 billion on music in 2017. This includes various musical mediums which ranges from traditional money makers like concerts, CDs, and vinyl to the relatively new revenues from streaming and digital purchases. Clearly the music business is not going anywhere, despite claims from naysayers.

While that $43 billion is certainly a massive number, the sad news is that only $5 billion of that gets trickled down to artists. That’s right, only 12% of the money being made in the music industry makes its way down to the people actually making the music, and even then the majority of that is going to the top stars. This may sound unfair to many people, but it is simply the reality of the business, and it would not be accurate to suggest that the greed of the music business is at fault here. 

First off, while the artists may be the primary creative force behind their work, there is a whole ecosystem required to get their work out there into the world. From the actual music-making process to the distribution to the marketing, a lot of money needs to be spent to put it out there. Think of it like going to a restaurant. You may think most of the money should go to the chef, the person creating the food that you are eating. However, there is the food cost itself, the cost of the cooks working under the chef, the manager, waiters, dishwashers, and other restaurant employees, marketing costs, and overhead costs such as rent, electricity, and insurance. There is also the risk taken on by investors who are financing the operation and must be compensated for that risk. When you look at it like this, you will realize that however much money the restaurant is making, only a small sliver will go to the chef, and anything else would be unfair. The same goes for the music business. There are certainly opportunities for artists to make a bigger share of the revenues, and they can do that by going independent and forgoing the perks of having a dedicated record label, agent, producer, etc. The more self-sufficient an artist can be, the bigger chunk of the revenues they get to take home. However, this will not only take up a lot of their time and energy, distracting them from the actual music making, it also will likely limit their reach. They might get a bigger share of the pie, but it will in turn be a smaller pie and potentially smaller take home for them. These are the tradeoffs that artists must take into consideration. It is also important to understand that the take-home share artists are getting has actually grown in recent years. Back in 2000, artists were getting 7% of the revenues going into the music industry. That number has since nearly doubled, though that is not to say their actual earnings have doubled. As always, the numbers are more complicated than they look. Ultimately, there is value in supporting your favorite artists, and this is especially true for indie artists who need all the support they can get.