How Music Artists Make Money

Since the dawn of mass culture, talented musicians have been elevated to the pinnacle of stardom.

When you think of the most famous people who ever lived, musicians are likely to top that list, with artists like Elvis, the Beatles, Madonna, Prince and David Bowie leaving a permanent, global mark on our world. community culture. . As one would expect for such highly touted personalities, their paychecks tend to match their inflated status.

Once you’ve risen to the top of the music industry, you’ll likely earn more than a Hollywood actor, bank CEO, or professional athlete. But how exactly do these musicians make money from their most important product – their music? Let’s break it down and see how the ways top musicians get paid have changed over time.

Save offers and tickets

Today, record deals and concert ticket sales are still a big chunk of change for any artist. However, it is rarely the most important source of income for a musician, as we will see.

For much of the 20th century, record deals, ticket sales, and album sales cuts were the only ways artists could make money. That’s why most of the most expensive record deals ever happened right before the rise of social media.

There’s the $200 million paid to U2 for a follow-up to Joshua tree and Achtung Baby in 1993, the $150 million Bruce Springsteen comeback album in 2005, and Robbie Williams’ $125 million deal with EMI in 2002, to name a few.

While there are a few exceptions in the era of contemporary music who have made huge sums of money from concert and festival sales, including Beyonce, Taylor Swift and Lady Gaga, it’s becoming more and more rare.

In the 1980s and 1990s, musicians were far more likely to make most or all of their money from performances, with bands like Nirvana and The Beatles deriving much of their vast income entirely from paper ticket sales. Today, tickets are more expensive than ever and attendance is at record highs, but the proceeds from those are less important than ever to a musician’s bottom line.

From radio plays to prints

Today, as for a century, musicians receive royalties each time their song plays on the radio. Even today, in a world where radio is often considered a dying technology, airtime royalties are higher than at any other time in history.

However, radio airplay is more about getting a song out these days than a bottom line. Indeed, in the digital age, social media is by far the most important driver of a musical artist’s success.

Earning Money in the Age of Social Media

So how do musicians make money from social media? Well, the revenue effects can be both direct and indirect. In a more indirect sense, songs that become a hit on algorithm-driven content platforms such as TikTok are usually destined to become the hottest tracks of the year.

This has been the case with gigantic hits such as “Just for Me” (PinkPantheress), “Driver’s License” (Olivia Rodrigo), “WAP” (Cardy B) and “Savage” (Megan Thee Stallion). In fact, the platform has become so essential to its success that labels will often produce songs specifically made for TikTok, while editing Spotify entries to make finding songs easier for those who might have heard a snippet of a video. of 10 seconds.

The nature of platforms such as TikTok means that a song from an unknown artist can become the biggest track on Earth in 24 hours, making it central to success for anyone in the industry. The more direct impact of this on revenue is clearly apparent. A fascinating case study here is this roundup of musicians’ net worth, based on payments for sponsored Instagram posts before and after a song is posted on social media. Here we see how a single TikTok hit can dramatically multiply an artist’s net worth. For example, Olivia Rodrigo’s payout per Instagram post jumped 349% after the release of “Driver’s License,” from $22,514 to $101,085. Today, social media success will shape your success as an artist.

The way artists make money is constantly changing and is always closely tied to technology trends. As such, you can expect this brief history to require updating in the near future.