What does it really take to become a career artist?

Anthony sent me an e-mail a couple weeks ago titled, “Tough Question”.  He asked me if I could summarize what it REALLY takes to “live comfortably” as a musician without the necessity of a real job.  He’s in a couple bands while going to college and is curious to know what he’s aiming for to make this happen.  It’s taken me a while to respond as I want this post to be sincere and informative.  I have many different thoughts on how to approach this one…so hang with me if I begin to ramble at all!

Topic – Make a living as a musician
What does it really take to live comfortable as a musician

Advice:
Define “comfortably.”  Because we’re not sure exactly what your hopes are, I’m going to make some assumptions.  Before I get into my thoughts about this…let’s break it down real quick.  As a musician and band member you are one piece of a business.  Like I’ve said many times before, you must look at your band as a business…you need to make more money than you spend.  And you as a member and participant of this business are entirely dependent on it’s success.  So let’s do some quick and dirty math.

Let’s assume you’re in a 4 member band.  Let’s also assume your definition of living comfortably is an annual salary of $40,000.  So, if every member is an equal partner, the company has to have an annual profit of at least $120,000 ($40k x 4 members salaries).

TOURING – How much are you making a show?  $100? $200? $500?!  Starting out, you make no more than $100-$200/show.  Let’s say you play 150 shows in one year at $200 a show..that gives you $30,000 income.  BUT, what about expenses like gas, tour manager, oil changes, tires, brakes, hotels, per diems, equipment, etc…chances are your per show costs (average tour costs divided by number of shows) is going to be around $100-$150…so kiss tour income goodbye at this level.

MERCH – Let’s assume you sell shirts for $10.  It most likely costs about $4 to make the shirt so you’re taking home $6/shirt you sell.  Let’s assume you sell about 15 shirts a night on your 150 shows.  That’ll give you $13,500 ($6 x 15 x 150).  CDs you sell for $10.  If you own your master and manufacture your CDs they probably cost about $2 to make…so a $8 profit.  Let’s be generous and give you 10 albums sold per night… (8 x 10 x 150) = $12,000.  So we’re looking at a total merch profit of $25,500

PUBLISHING – Let’s say you got a friend that works for a DVD production company and they license your song for a DVD…I’ll give you a very generous $2500 for that one.

ALBUM SALES – if you’re signed to a label = $0.00.  If you’re doing it alone and you have your CD Baby and Tunecore accounts set up….I’ll give you a generous 2000 albums sold.  The margins vary on your cost of goods sold and distribution fees…but let’s assume an average of $7.00 per album = $14,000

So what are we left with after a year of touring, 2000 albums sold independently, scoring a song in a DVD, and hustling your merch?  $42,000.

Divided by 4 members = $10,500 per member.

Note this doesn’t include any recording costs or manager, atty, and agent fees!

And this is real man…these are very realistic, if not a bit too generous, numbers for a beginning band.

BUT..all hope is not lost.  If you can get to a place where your band is selling out 300-400 capacity clubs, you can make about $2000/night as a performance fee.  You’re also selling a lot more merch.  If your band can get to a level where you can pull 300-500 kids in major markets, you’re making money and well on your way.  The trick then is sustaining that fan base.

So there’s the very down and dirty math..but it should give you some perspective.  Now, my opinion…

If you’re worried about making a career as a musician..just stop.  If you’re worried about paying the bills, struggling, and living uncomfortably…please…just go home.  This is not easy and not everyone should try.  Now more than ever it’s survival of the fittest.  I keep saying it… you have to unconditionally love music and your craft of writing songs.  If success comes…terrific…and it will for the best of them. But it’s going to be an increasingly long road and you will struggle…as you should.

Ben

Master Derived Income

I received an e-mail over the weekend from Jason asking what the “Master Derived Income” is that I made reference to in my “Getting Label Attention” post.  I’m really excited about this question as it’s getting into a bit more of the business detail which every band needs to understand.  You have to look at your band as a business if your goal is to become a career musician.  If you aspire for anything more than a band that plays for fun at the local club (which there’s absolutely nothing wrong with) you need to figure out how to pay the bills…the only way to do that is by generating income.  One possible source for this income is your Masters.

Topic – Master Derived Income
What is it and how do I get it?

Advice:
First, let’s make sure we know what a Master is.  For every song there are 2 copyrights, the publishing copyright and the master copyright.  Publishing copyrights are what make the song itself…the lyrics,  melodies, notes, progression of chords…it’s the writing of a song.  Master copyrights are the recordings of those songs..it’s the captured audio.  So every song that’s ever been recorded is a Master… What’s a copyright?  Just think of it as acknowledged protection that informs everyone that you own something and if they want to use it they have to receive permission from you and pay you for using it.

Still with me?!

So now that you know Masters are the recording of songs we can discuss how to make money off of that!  Most commonly it’s putting about 10-12 of those masters onto one album, making CDs, and selling them at shows for about $10.  But now, there are more and more opportunities to make money off the “exploitation” of masters such as selling digital downloads, ringtones, ringbacks, and licensing (allowing the use) of masters in film, tv, and or video games.  Each of these avenues create income for the owner of those masters.

Typically, when you sign to a label they own your masters.  They give you an advance (maybe), pay for the recordings (budgets are getting smaller), and they own the masters.  In return, they give you a royalty, or %, of the income generated by those masters…but count on never seeing it as it’s only paid to you if your account with the label is recouped.  So now, every time an album is sold, a track is legally downloaded, a ringtone is purchased…it goes back to the label.  If you’re an independent artist and you retain ownership of your masters, you will receive the full benefit and income generated from any and all sales and uses of your songs.  “But if we’re on a label and we’re selling our CDs at shows..don’t we get to keep that money”?  Sure, after the label sends you an invoice for anywhere between $6-$7.50 per CD that you sell.  You have to buy your CDs from the label.  They own it.

Advice?  Depends on what your short and long term goals are.  I’m an advocate of holding onto everything you can….especially now.  No one knows exactly what’s going to happen over the next 1, 2, 5 years in the music industry…every label is struggling…why hand your control and ownership over now?  You can’t wait 2 years, write better songs, develop a regional fan base, and then see if there’s a better opportunity?

Just a thought….
Ben