Making money as a musician in the digital era is a little different to a few decades ago, when iTunes and CD sales were king. Here’s how to make money as a musician online in 2022.
Understanding How Streaming Platforms Pay Musicians
Streaming services have a pretty bad reputation for low pay in some circles. Many prominent musicians are highly critical of how little they pay, but the prize pool isn’t exactly tiny.
According to Statista,
In 2021, streaming revenues reached 16.9 billion U.S. dollars worldwide, the highest ever recorded and more than four times the figure given for 2015, when music streaming revenue amounted to 2.8 billion. Streaming revenues now account for over 65 percent of total global recorded music revenue.
Statista (Marie Charlotte Gotting)
Yes, your business competition include the likes of the Red Hot Chili Peppers, Jay Z and Kanye West, but this doesn’t mean it’s impossible to grab a piece of the pie. Some people prefer to be a big fish in a small pond, but statistically it’s more than likely the inverse that you will experience in the business of music streaming.
This isn’t to say you should give up now, however. It’s not even a drop compared to the big, big musicians but I publish under a handful of names and average around 200,000 streams per week at the moment, which equates to roughly $2100 per month from Spotify. This isn’t a lot when you compare it to a majority of household names, but once you add in the other streaming services such as YouTube Music, Apple Music and Amazon, it is definitely possible to make more than $4-5000 per month from streaming royalties across all platforms. Added up, the total monthly listeners I have on Spotify is about 270,000. So from personal experience, to make a decent living purely from streams, no touring or merch to speak of, you will be needing to at minimum break over 100k monthly listeners if you live in the west.
If you want to know how to get your music onto all the major streaming providers, check out my article here.
How Many Artists Have Over 100k Monthly Listeners?
According to Musically.com,
“More than 60,000 artists hit the exciting milestone of reaching 100,000+ monthly listeners on Spotify at some point during this year — up 42% from 42,000 in 2019,”
Spotify (Via Musically.com)
According to a blog post by Spotify, over 60,000 artists managed to break above 100k monthly listeners at some point during that year. This is promising! What is worth noting is that a large portion of this figure consists of musicians with label-backed resources, making the number undoubtedly a lot smaller if we are solely considering independent musicians.
How Many Musicians Make Over $10k From Spotify Streams?
Here’s the slightly more depressing statistics I’ve found. Music Business Worldwide published an article in which they dove into Spotify’s reported streaming revenue data, and managed to work out (approximately) how many artists managed to make over $10k from Spotify royalties alone.
They learned that 36,100 artists made between $10k and $50k from Spotify alone in 2021, with a total of 52,600 artists making over $10k. Based on the estimated figure of roughly 11 million total artists releasing music on Spotify, this means that earning $10k in a year from Spotify would put you in the top 0.48% of artists, or roughly one in 200. So no, it’s not a 1 in a million chance, it’s about 1 in 200. Which isn’t actually impossible at all, once you take into account the number of artists with just 3 songs out and a handful of monthly listeners, on a dormant project. I would estimate roughly half of all Spotify artists don’t release more than once per year, so in terms of dedicated artists you would have to be in the top 1%.
What About the Other Streaming Services?
Spotify is the main household name when it comes to music streaming services, but there are a bunch of other significant players who can also pay lucratively if you manage to capture a big audience, such as Apple Music, Tidal, YouTube Music and Amazon. Taking these platforms into account too, you will have a much greater chance of managing to make ends meet just from releasing music, but don’t have expectations of a Lambo parked outside any time soon (unless it’s your friend’s who got in early on some useless NFT project).
Spotify has the lion’s share of the streaming market with a roughly 31% stake, followed by Apple Music (15%) and Amazon (13%). From experience, both Apple Music and Amazon do actually pay more per stream, but since they have a smaller user base the number of streams is also considerably smaller. A handful of other services take up the remaining share, such as Tencent Music (a Chinese platform with 13%) and YouTube Music (8%). Based on these figures, I wouldn’t personally get my hopes up about that huge royalty plan Tidal were boasting about a few years ago. From personal experience, Tidal is not the miracle platform some artists claimed it would be. It takes under 2% of the market, pay incredibly slowly (I’ve had to wait over a year in some cases) and just don’t do the numbers their investors were hoping for a few years ago. The platform has fallen into irrelevancy, with seemingly only Jay Z actually making any money from the project. He sold his large stake in tidal recently for over $302 million to Jack Dorsey’s Square.
If my streaming numbers are anything to go off, expect Spotify to account for roughly 50% of streaming revenue an artist will receive. Now that we’ve been on an emotional rollercoaster across the world of music streaming, lets take a look at a few other, specifically online, avenues that musicians can consider when looking to earn a living from their music online.
Selling Beats/ Instrumentals
If you’re a digital music producer, chances are you’ve made a few “beats”, or instrumental hip hop type songs which would be appropriate for a rapper to hop on and lay down some deep lyrics. Or just mumble in Autotune over it instead, that also works.
If you aren’t personally interested in rapping over the hard hitting, bassy trap beats you produce then you can always look to sell them for a small price to an aspiring rapper who is willing to part with some cash. Platforms such as Beatstars and Traktrain provide large numbers of hungry buyers, so it might be worth a try if you have the production skills necessary. There is also a lot of competition on these sites too though, so you’ll have to have extremely high quality or unique beats to stand a chance.
Merchandise
This is a big one, but also potentially the most challenging to get going at first. If you’ve managed to amass a moderately sized cult following, providing them with some great designs on clothing can be a fantastic form of monetisation, and your fans will love you for it. Hey, the shirts can even act as free promotion if you do it right!
I will admit, I’ve been doing music for more than four years now, and not once have I properly considered producing merchandise for my music, but I think that’s because I’m unsure of how much of my fanbase will actually be willing to part with 20$ for a t shirt. If your DMs on social media are filled to the brim, that’s a pretty good indicator that you have enough fans that it’s at least worth looking into. Like YouTubers, when it’s done well it’s definitely possible to earn a pretty significant stack of money from making merchandise for your fanbase. Just make sure you’re using high quality garments and at least somewhat decent printing first, as the last thing you want is for your most dedicated fans to become annoyed at you.
Conclusion – How to Make Money as a Musician Online
So there you have it, a handful of ways to make money as a musician online. This is by no means a comprehensive list. There are tonnes of other options which I will go into in another article soon, but these are the most straightforward ways of making money as a musician on the internet. It’s a challenging task to put on yourself, with many other businesses being far more lucrative and probably easier to start, but if you really love music for the sake of making music then I say go for it. If you’re making music just for yourself, for the love of it then you may as well release some of the highlights to the world and see if you can earn some extra money on the side. Who knows, maybe you’ll manage to join the 52,600 artists banking over $10k from Spotify next year? It’s absolutely possible, but your chances of managing it increase in direct proportion to the amount of music you’re putting out. If you have a few finished songs that you’re unsure about releasing, I say go for it 🙂
If you have any questions please don’t hesitate to comment below and I’ll do my best to respond.
Thanks,
Tyler
