I’ve said it before and I’ll say it again: musicians earn the most income through touring. Earlier this month, Billboard released their list of the 40 highest-paid musicians in the American music industry from 2014. This list took into account album sales, streaming royalties, publishing royalties, and touring revenue (to understand Billboard’s methodology, see the asterisk at the end of this article). Topping the list was British boy band One Direction, whose annual revenue totaled $46 million. 1D was ranked #13 in last year’s list, having since skyrocketed to fame, fortune, and infidelity.

The lowest earner in the top 40 was vintage rocker Tom Petty, whose greatest hits CD I was devastated to have lost in Germany in 2006, with a total earnings of just under $6.7 million. Perhaps Mr. Petty will see a fatter paycheck in 2015 after being awarded 12.5% writer’s credit for Sam Smith’s hit single “Stay With Me.” Taking into account all 40 artists, the average (mean) total revenue was approximately $14.7 million per artist. Looking at the chart below, you can see just who performed close to that average and who was well above or below.

Total Revenue by Artist
Total Revenue by Artist – Click for full size.

Based on the above data, if you’re a white, female pop singer, you’ve got a good chance of earning about $15 million per year (see: Gaga, T-Swift, Hannah Montana and Cher). If you’re an old man pop/rock band, (see: Tom Petty, Pearl Jam, James Taylor and Elton John), you’d be lucky to break half of that. Fortunately for us, we can break down these data and truly determine where the most money is being earned, and who exactly is earning it. Out of the collective $586 million earned by these 40 acts within one year, 80% of it was earned through live performances and package tours. The average tour earning per act was around $11.7 million, with an outlier of T-Swift who for some reason earned a whopping $0 (which I find hard to believe).

Total Income by Type
I am aware that this looks like Pac-Man eating slices of pizza and cheesecake.

Just like our total annual revenues, pop music scored another win raking in a total of $156 million in touring revenue. Pop music accounted for about 28% of the artists on this list, which is no surprise given that the genre got its name from the word “popular.” What is surprising, at least to me however, is that #6 on our list of not only highest touring revenue but highest earners in general, is truck-drivin’, dip-spittin’, beer-chuggin’ bro-country/pop sensation Luke Bryan. Country has definitely made its mark in recent years, with its fun and relatable lyrics (not my words) and live performances which are akin to music festivals with their own unique culture. These live country ho-downs have drawn almost $104 million in touring revenues, putting country just behind rock and roll (which is still $20 million less lucrative than pop music).

Touring Revenue by Genre
Touring Revenue by Genre – Click for full size.

American music is dominated by mainstream caucasian artists, which is understandable considering 78% of the population identifies as white. Don’t be so quick to judge though, as historically black-dominated hip-hop and R&B accrued a total of over $72 million dollars, and latin music earned $27 million between just two performers on this list. The Latino community is one of the fastest growing communities in the United States, and with stars like Bruno Mars on the rise, we can expect to see them make up a much larger demographic in American music throughout the next decade.

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Shoutout to Twin Shadow, the next Latino-American rockstar

One of the more technologically interesting aspects of this article is how much money was earned through streaming services. Companies like Spotify have been in the media recently due to their poor payment practices and royalty rates, with artists as high-profile as Taylor Swift proudly boycotting their business model. Ms. Swift earned just over $600,000 from streaming services before removing her catalogue late last year, due to Spotify not appropriately valuing her “art.” In her defense, however, T-Dog was the highest paid musician when it came to album sales, reaching almost $10 million in revenue. The least paid streaming artist was an old hippie group called Phish, whom most of you youngins have probably never heard of. Phish earned a grand total of $7,200 from streaming, likely due to their fan base being too high to understand how to properly use a computer.

In all seriousness, we should be excited. People are buying music again, and the industry is on the mend. Remember when your only option was choosing between an expensive CD and iTunes download or pirating the album and risking your computer? I’m not saying that streaming is the best solution, for the artists or the fans, but at least it offers a better alternative for artists to get their music distributed. Streaming accounted for about $12 million in royalties between only 40 artists. That’s a lot of money once you think about it. If these guys can become millionaires writing the same recycled pop tunes, then maybe someday you can move out of your parent’s basement. Maybe.

*BILLBOARD METHODOLOGY: Money Makers was compiled with Nielsen Music and Billboard Boxscore, 2014 U.S. data only. Revenue from merchandising, synchronization and sponsorship is not included. The following royalty rates, minus a 4 percent producer’s fee, were used: album and track sales, 22 percent of retail revenue; streaming revenue, 22 percent for current acts and 50 percent for heritage acts. Publishing royalties were estimated using statutory mechanical rates for album and track sales and the Copyright Royalty Board streaming formula; for labels’ direct deals with interactive services, blended audio and video rates of, respectively, $0.0075 and $0.0045. (A 10 percent manager’s fee was deducted from each category.) Touring revenue equals 34 percent of an act’s Boxscore.

Ten years ago, distribution was one of the main reasons artists needed record labels. Of course their marketing and recording budgets didn’t hurt either, but that’s what crowdfunding is for today. Just like crowdfunding, independent artists now have access to channels of distribution outside of the major label supply chain. The simplest and most direct of these channels consist of free streaming websites such as bandcamp, SoundCloud, and ReverbNation which allow artists to create profiles, e-mail databases, sell music, and interact with other artists and fans alike.

All of these actions are a form of direct marketing or personal selling. Direct marketing bypasses the supply chain completely, or “cuts out the middleman” by going straight to the consumer. If you’re as old as me and ever used MySpace, I’m sure you’ll remember how many bands became successful simply by creating social media profiles and interacting with their fans in real time. This type of direct marketing was free, added value to the customer’s experience, and allowed the artists to become their own managers, publicists, and distributors. Though MySpace is no longer the internet powerhouse it once was (R.I.P.), there are other methods of distribution which do similar things.

You were my first friend Tom, but I feel like I hardly knew you.
You were my first friend Tom, but I feel like I hardly knew you.

The first aspect of distribution is to set a goal. Do you want all of your fans with smartphones to be able to purchase your music on the go? Or do you have older fans who would like to buy a physical CD at a store or concert? Maybe you’re extremely hip and are offering vinyl through mail-order. Believe it or not, some major radio stations are now playing local and independent artists as frequently as national ones and maybe you’d like to get yourself a slice of that market share.

Successful distribution requires having a plan in place which allows you, the independent artist, to distribute your music at the lowest possible cost to the largest possible audience. For organization’s sake, we’ll break the channels of distribution into two categories. We’ll start with digital by covering streaming and purchasing, then move to physical where we’ll cover brick and mortar stores, radio, and selling merchandise at concerts.

Like I said before, the melting pot of social networking sites, artist profiles, and e-commerce has met at a crossroads and churned out sites like ReverbNation and SoundCloud. These sites stream music, which simply means that listeners can play the music for free on their websites. Other programs such as Spotify, Pandora, and Rdio offer similar services, but are organized differently, have smartphone applications, and may offer membership costs for more premium services. Regardless, if your goal is to put your music in the hands of your target market without any financial return, then this is an excellent route to take. As we discussed in the pricing article, the freemium model can be a great marketing tactic which drives fans to your concerts and other merchandise.

If your goal is to have a financial return on investment, then that is where iTunes, Amazon, and other digital retailers come in. As I’ve mentioned before, these do not cost a lot of money, offer instant gratification to smartphone users, and are reputable retailers which add authenticity and credibility to your brand image. Of course there are websites which offer both streaming and the ability to purchase, and I’ll have to admit that bandcamp is my personal favorite. Bandcamp allows for artist and fan accounts, has a smartphone application, and costs the independent artist next to nothing to use.

The internet is not exactly tangible, and sometimes there’s nothing better than hearing a new song on the radio, seeing a band live and picking up one of their CDs, or digging in the crates at your local indie record shop. CDs and download cards are products which can easily be sold at your concerts, as setting up a merch booth takes little effort and can offer excellent visibility, opportunity, and revenue. It has also never been easier to place your products on the shelves of brick and mortar stores such as independent record shops, coffee shops, and other small businesses in your community.

Courtesy of www.ThunderPussy.com
Courtesy of http://www.ThunderPussy.com

As far as getting your music on the radio, there are two radio stations right here in Columbus, Ohio which often play local music. In fact, in researching for this article, I was surprised to see my former bandmates from Someone Like You in rotation on 99.7 The Blitz Local Stuff with their new group We Are The Movies. Another admirable local radio station is CD102.5 who plays local indie rock on their Frontstage program every week.

Another method often unknown to many independent artists is licensing. I could write an entire article about this and probably will someday, but the bottom line is this: if you simply want your music to be heard, you can partner with a publisher (or become your own) and license your songs to movies, TV stations, and companies who play music in restaurants and shopping malls. This type of distribution pays a royalty, and allows for the general public to be exposed to your work. As you may have realized by now, distribution comes in many different shapes and sizes. It all depends on your target market and what is the best way to reach them. As technology changes, so will the supply chain, but the end goal will always be the same: to have your voice heard.

One of my earliest musical memories is watching Michael Jackson videos on TV and begging my dad to tape them and painstakingly write down all of the lyrics so I could sing along. He didn’t hesitate to buy me a guitar, and didn’t scold me when I never touched it and asked for a drumset a year later. I ended up playing drums in various bands for about ten years before I picked up guitar and vocals around the year 2008. I remember telling all of my friends that I was going to release a solo album, and I honestly really tried. I’ve probably written 20 – 30 songs a year since then, but have never really been satisfied or had the time to pursue releasing a proper album.

All that changed a couple of years ago when I woke up in the middle of the night in a tent in the mountains of West Virginia with a tune running through my head. I had fallen asleep the night before listening to Rufus Wainwright’s latest album and thought maybe for a second that whatever was stuck in my head was simply a reincarnation of one of his songs. Conveniently I had brought my ukulele and iPhone camping with me, as I never leave home without them, and started demoing this song, much to the chagrin of my neighbors (which is a whole other unbelievable story).

That song turned out to be “Wrecking Ball,” which is my first proper solo release and single which is now officially on iTunes, Spotify, and the like. It’s the first song I wrote where I didn’t poorly rip off Neutral Milk Hotel or attempt to sing high-pitched whiny pop-punk songs just to fit into a mold which didn’t fit me. I also recorded, mixed, and mastered all of it myself, except for the help of audio engineer Ryan Liptak (of Happy Tooth & Dug fame) who recorded the drums and lead guitar.

This is the guy that I probably ripped off.
This is the guy that I probably ripped off.

In the year 2015, I set one and only one goal for myself: to finally release my solo album. I even came up with a fancy name, “Some Things Never Change,” which is spot on considering this has been my great white buffalo for the past six years. I’ve written and demoed the majority of the songs, buying fancy recording equipment and trying to push myself to the outer limits of my comfort zone. It has been rewarding and stressful all at the same time, and when you actually think about everything that goes in to making an album, it can certainly seem daunting.

The first step in creating an album is being a competent musician. In all my years of private lessons, practice, ripping off my favorite bands, and trying to create a niche for myself, I finally feel competent enough as a musician to be able to write a decent song. I usually start with a lyric, or a “hook,” craft a melody based off of that, then pick up an instrument. My go to instrument is usually guitar, ukulele, or piano as of late, and helps me craft the chords with which the song will take shape.

Then I do a free-write to help me fill in the lyrical holes, and basically just journal like a sixth-grade girl until I pull something from deep enough within to be taken seriously as an artist. Being a marketing graduate, I crafted a press kit with the quote “lyrical topics include accepting your past, fatherly advice, marriage and income inequality, suicide, and of course a self-deprecating song about hipsters.” Pretty serious stuff, right? It’s not all bad, I did attempt to write a self-deprecating song about hipsters, but honestly it seems so gimmicky and vapid that I’m not sure it will even make the cut.

Dear Diary: Why Aren't I a Rockstar yet? :(
Dear Diary: Why Aren’t I a Rockstar yet? 😦

So I’ve got the bare bones of the song done; chords, melodies, and lyrics, and the next thing to do is to record a scratch track or demo track. These two are not technically the same thing, but I’ll often demo a song and use it as a scratch track later when I’m recording the master. Many engineers and musicians will tell you to always record drums first, and I’ll have to agree with them. Trying to record drums over anything is a serious pain in the ass, even if you’ve followed your metronome like a robot. But music isn’t robotic. Music ebbs and flows and is rarely static.

I always record drums first, and always close enough to a click that it sounds like I know what I’m doing. I guess I forgot to mention the step where I also have to write the drum part. One summer when I was on Vans Warped Tour I spent the whole two months without access to recording gear, so I would listen to my acoustic demos and tap out drum parts with my hands or think of them in my head. I remember my bass player asking me with a genuinely confused look why I always listen to myself. He must have thought I was extremely self-centered. Well, he wouldn’t be wrong in assuming that.

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Photo Credit: twitter.com/THAOphoto

I write and record the drums, and then it’s off to the races with the rest of the rhythm tracks. I lay down a rhythm guitar, bass guitar, scratch vocal, then I start crafting my leads. I never truly appreciated leads until I joined the band Someone Like You and we recorded our debut EP as professionally as we could afford to. I watched our three guitarists come up with lead after lead and heard them seemlessly melt into the verses and choruses, adding texture, melody, and harmony to an otherwise bland rhythm guitar.

Once I have all the leads written, I record the main vocal, add some harmony, back-ups, and listen to the song on repeat enough that if it were on Spotify I’d be rich by now. The next phase is mixing and mastering, which is honestly so much of a science that I wouldn’t do it justice by discussing it here. I add some compression, equalization, reverb and delay, adjust the levels, and once all that is sorted out I start the mastering phase. When mastering, I always refer to the phrase “Radio Ready” to compare my final mix with what one might hear on the radio. Is it loud enough? Have I panned appropriately? Is it clipping anywhere? What about unwanted noise, or even sounds getting lost in the mix?

Mixing and mastering is probably the hardest part of the whole album process, as you can never truly be done mixing. I learned early on to realize when something is the best it’s going to get and just roll with it. Once I’ve got the masters, I can start uploading them to bandcamp, SoundCloud, YouTube, and get my wavs sent off to iTunes, Spotify, Amazon and other digital retailers. At this point in the game, I’ve spent practically no money on recording as I already own or borrow the instruments, have cheap home recording gear, and most websites and retailers are free. I’ll spend about $20 getting CD Baby or TuneCore to put my music on iTunes, but it’s not a bad return on investment.

This s**t takes forever.
This s**t takes forever.

Artwork and photography are a very important visual representation of your music. I’ve got a decent camera and some free editing software, and can easily come up with some promo pics and album artwork. In the day and age of digital purchases, artwork is less important, but it’s not difficult to create something professional on your own in one evening. Next I’ll take my camera and make some YouTube videos, lyric videos, or promotional videos, throw them up for free online and publish them to my social media accounts.


I went to school for marketing and public relations, so it’s easy for me to come up with branding, distribution, press releases and media kits. I work in business administration so I’m able to stay organized and within budget. I’m just a kid from a small town in Ohio, so trust me when I say that if I can do this, anyone can. Getting out and playing shows is the next step, and honestly networking is key. Music is all about community and one of the most valuable lessons I learned playing in punk rock bands is that we all look out for each other. Trading shows with bands or getting added at the last second is common, and concerts are one of the most important means of keeping the momentum of your music going.

If this sounds like a lot of work, it is. You’ll likely have to invest some money before you even get started, and be prepared to make a lot of personal sacrifices (sorry babe). I can only imagine that I won’t earn much income with my music, and having a day job and a personal life can hinder that even more. The important thing is having fun, not putting too much stress on yourself, and sharing one of the most basic human rituals with others. That’s why I’ve decided that in 2015, I’m finally going to release a new album for a new year.

Do you remember your first real concert? By “real,” I mean the first time you ever went to see a band you actually liked, not like the time my parents took me to see Cheap Trick at the State Fair, or even that time I accidentally saw LeAnn Rimes at the amusement park (it was not amusing). No, I’m talking about the first time you actively pursued a band whose music meant something to you and having an unforgettable time at one of their shows.

PunkPic
OMG I’M SO COOL LOOK AT MY COCKFLAP

All the way back in the early 2000s when I was just a young chap, I picked up a sampler album at Hot Topic (I know) called Pure Punk Rock by Punk Core Records. This disc contained many of the bands I would worship over the next few years, drawing me closer and closer to the dingy, dirty, run-down dive bars that I would frequent throughout high school. The sampler contained a song by a band called The Unseen, who was a pretty straight-forward street punk band from Boston (sidenote: their bassist has since written a pretty entertaining book which you can check out here). A couple of months after starting my freshman year of high school in the autumn of 2003, this thing called the internet told me that The Unseen were coming to my town. They were playing at Newport Music Hall, a place I had never heard of, but would later go on to perform several times myself.

I worked up the courage to ask my parents if I could go to the freak fest, and sheepishly inquired if they had ever heard of the Newport Music Hall. Both parents laughed and reminisced that they had spent many a night there when they were younger, but seemed a little reserved at letting 14 year old me attend the show. We somehow worked it out that my mother would take me (so punk rock) and my best friend’s mother would attend as well. I checked out the lineup online, and the headlining band were Dropkick Murphy’s who I had heard of, and the opening band were called Roger Miret and the Disasters.

I had never heard of the opener before, but this was my first big chance to discover some new music so we arrived early. My mom and her accomplice each grabbed a beer, which was a sight I had only seen a few times in my entire life up until that point. Immediately the mood changed and I sensed that it was going to be a fun night. My friends and I went into the pit and tried to act like we belonged there as Roger Miret and the Disasters started and put on one hell of a show. They were high energy, catchy, and unlike any other punk band I had heard at that time.

After their set, my mother and I were hanging around the merch booths when an older gentleman approached me and complimented me on my The Clash back patch. I said thank you and the three of us sparked up a conversation about older bands and who were our favorites. I didn’t even realize it, but I was speaking to Roger Miret, the singer of the opening band (and for all of you hardcore kids out there, also THE VOCALIST OF AGNOSTIC FRONT). My mother and I spoke to Roger for a while and before I knew it he was giving me free stickers, patches and pins, and once he found out that I had a couple of friends with me, went back to his merch booth and gave us even more goodies. This absolutely blew my mind, as everybody around me had neck tattoos, leather jackets and mohawks, and to be honest, I was a little frightened. This bad-ass looking dude not only turned out to be a perfect gentleman, but left me feeling included and inspired to be a part of his community.

Disasters
My “gear.”

The Unseen played next and I had a wonderful time pogoing, skanking, circle pitting, and picking up my fallen brothers and sisters off the ground. It was everything I ever wanted and more, and cemented the idea that this is where I belonged. I would later go on to see The Unseen about a million times more and had some excellent conversations with their drummer Pat, who was yet another amazing dude willing to spend his time talking to a random teenage kid like me. The Dropkicks went on last, and as I’m sure you can imagine completely blew my mind. By the end of the night, I was on stage with the band and a bunch of fat, drunken, sweaty Irishmen singing songs arm in arm and having the time of my life. It was and will remain one of the most memorable nights of my adolescent years.

Exactly four years later, in October of 2007, I was playing drums in a hardcore band who had seen mild popularity playing around the Midwest and Canada. Our band was asked to be the openers for an all-day hardcore music festival, whose headliner would be Agnostic Front. Nostalgia hit me like a ton of bricks when I thought about how just four years earlier I was an awkward kid going to his first punk show and now had the opportunity to play with a band whose vocalist had a major impact on me. I loaded up my gear and hit the road for Dayton, OH where we were to go on around noon.

Evansville
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When my band played, there weren’t many people there, aside from a couple of other bands. We gave it our all and still had a wonderful time, and got to see a lot of other great bands throughout the day. Agnostic Front closed the night, and were really a sight to be seen. Everybody in the venue was going absolutely insane, moshing, singing along, and you could tell that this band meant a lot to everyone there. After the show ended, I had to make my way back toward Columbus and was unable to catch up with Mr. Miret that night. I doubt I would have had a chance anyway as he was the most popular man in the room, but I really felt like things had come full circle. I learned a valuable lesson about the relationship between artists and their fans, and remain grateful for what Mr. Miret taught me: don’t forget about the little people.

I think it was in Texas in the spring of ’06 when I bought the Arctic Monkeys CD Whatever People Say I Am, That’s What I’m Not; which went on to become the fastest selling debut album in British music history. I also picked up an Anti-Flag CD, Coldplay’s live album, and I’m Wide Awake, It’s Morning by Bright Eyes that day. I’ll never forget the smirk on the cashier’s face when he said I had an “interesting” taste in music. I had actually been introduced to Arctic Monkeys a year prior when a friend gave me a mix CD with one of their songs on it. Remember those? I found some of my favorite music through mixes.

Arctic Monkeys
My Arctic Monkeys CD. Amish beard for scale.

After reading this article on The Guardian, I was very impressed to learn that in the UK, the Arctic Monkeys’ latest album, AM, was “the biggest selling vinyl LP of 2014.” The article also mentioned that vinyl has become “an attractive format for object fetishists and committed fans.” Now object fetishists and committed fans are two completely different types of people, so I had to find out: who is buying vinyl records?

I don’t have a Facebook account and as you get older your friends generally start to move on with their lives, so I posed a question to an online vinyl record forum: “Why Do You Buy Vinyl Records?” I didn’t expect to get much of a response, but the one that I did get was not only qualitative, but quantitative. Perfect strangers opened up to me over the internet detailing exactly how they listen to records, their childhood, what their hobbies are, and what kinds of music they listen to.

You can probably guess who the majority of vinyl consumers are: 20-something men in major cities with enough disposable income to afford the average $20 record. If you guessed this, then you guessed correctly. What astounded me however were the vast lifestyle differences and reasons for purchasing that varied by respondent. Approximately 76% of my audience were males between the ages of 25 and 39, with all other respondents being female (obviously) and/or between the ages of 18 and 24.

Sound was first recorded in 1857, which was over 150 years ago. The tail end of vinyl record sales slowed in 1996 with just over one million units sold, so what does that say about the staying power of vinyl? The majority of my respondents were still teenagers when vinyl “died out,” yet somehow still find themselves drawn toward this mysteriously popular format.

Old Record Player
Just listening to the new National record, no big deal.

So what caused this shift back to traditionalism? Was it Napster, KaZaA, or SoulSeek? How about iTunes, Zunes, or CD players? Or maybe it was the final nail in the coffin: YouTube, Spotify, or Pandora. I can’t say for sure, but after reading some of the responses to my question, I found that the main reason for this shift was the physical and emotional connection that the listeners felt to the music on the record. If we look at the timeline mentioned above, from vinyl to CD, and Napster to Spotify, let’s think about how this affected the artist. In 1996, bands were selling vinyl and CDs for upwards of $20, but today they only get paid mere pennies for however many hundreds of times their songs are streamed on Spotify.

The second highest response to my question was to support the artist. Bands clearly aren’t making any money from streaming, and they definitely don’t have major labels backing them any more, so where is their revenue coming from? For some lucky artists, it’s coming from their vinyl record sales. 21% of my respondents purchased just to support the artist. Two of the other major responses to my question were that listeners are buying vinyl for the higher audio quality and physical packaging.

Dent May Vinyl
Aw shucks, really? Thanks, Dent!

Some of the more interesting lifestyle statistics I gathered from my audience were geographical location and annual household income. Most lived on the east coast of the United States in major cities, some were unemployed, and others made almost $200,000 per annum. Music has always been something that brings people together, and often transcends cultural and socio-economic barriers. It was really exciting to see so many people from different backgrounds come together just to talk about their love for music. Many of them talked about the feeling they get of nostalgia or warmth once they touch the needle to the record, or how much closer they feel to the artists that they love.

The artists have noticed this cultural shift too, and have started to give back to their fans. Record Store Day is usually the third Saturday of April, an international holy day for musicians, fans, and record store owners alike. Many bands release special records and CDs and even perform concerts at independent record stores all around the world. It has become a unique and important observance for die-hard music fans allowing them the chance to collect rare memoribilia, meet the artists they love, and provide a revenue boom for small businesses and independent musicians.

Though music may be seen as a commodity to many, to others it is life. The anticipation running through their veins as they tear off the shrink wrap, pull out the liner notes, and delicately place the needle on the track. Turning the lights down low, the bass and treble up, and simply enjoying being nowhere with only your favorite song as company. I’d like to say that the recent uptick in sales of vinyl records is not a trend, because trends don’t last for 150 years. Trends come and go as technologies and cultures change, but one thing that will always remain the same is the connection that we feel to the music.

In keeping with the spirit of an album release, today we’ll talk about how to price your album. There are many different factors to consider when establishing a price, such as how much money you put into the making of the album (studio time, artwork, photography, advertising); how much money you hope to earn from sales of the album (after dividing money between band members, paying income tax, manufacturing overhead), and ultimately, what you think the album is worth.

Manufacturing Overhead: Overhead is the cost of doing business. So you rent a studio space for $500 a month, it costs you $750 to press new merchandise each month, and your entire band needs a cost of living wage; so when it’s all said and done, your overhead is likely several thousands of dollars per month.

Income Tax: Taxes paid on all incoming revenue. If you are a solo artist or sole proprietor, or your band is a co-owned LLC, you would generally pay the IRS your income tax quarterly as an independent contractor.

Many artists calculate what they’ll sell their album for by starting with the product cost. What I’ve heard a lot of bands say is “the CDs each cost $2 to press, so we need to earn at least $2.” This is called break-even pricing. What this strategy vies for is earning enough revenue to cover the cost of manufacturing. What it doesn’t take into account is how much money it cost to record the album in a professional studio, how much the photographer was paid, and how much time each band member spent practicing, recording, and promoting. Unless you’re opting for the freemium model (which we’ll discuss later on), this is the best worst-case scenario.

If you want to earn a profit on the sale of your records, what you’ll likely want to do is markup your sale price. Cost-plus pricing is when you consider the initial cost of manufacturing and add (plus) your desired profit. So it takes $2 to press each CD, and you want to earn a minimum of $5 profit per sale, so you sell each album for $7. In today’s economic environment, is this the most realistic price? If every other musician on the planet is selling their album for only $5, and you are selling yours for $7, who do you think the audience is more likely to support? Unless you have added value (bonus tracks, free downloads online, music videos, etc.), your competition is likely to prevail. Competition-based pricing is just that- pricing your products at the same price or lower than your competitors. I’m sure you’ve seen gas stations across the street from one another lowering their prices by mere pennies just to gain market share; well it’s not much different in today’s music industry where supply greatly outweighs demand.

Gross Profit: This is the amount of money you make before paying off your band members, income tax, and using the band fund to cover costs such as hotels and meals.

Net Profit: This is the amount of money that you earn after all expenses are paid. So you sold $1,000 worth of albums, but after living expenses, taxes, and per diems, you’ve got about $40 bucks.

With the increase in streaming programs such as Spotify, Pandora, and Rdio, many consumers, especially die hard music fans aren’t even buying much music anymore. Sure, they might pick up a vinyl record or download an album on bandcamp to support an artist they love, but in 2014, several artists surpassed over one billion plays each on Spotify. With this technological shift in the way we consume music, many bands, especially indie ones, are opting for pay-what-you-want or freemium pricing strategies.

Pay-what-you-want is so simple that it makes you wonder why no one thought of it years ago. Radiohead was one of the first bands to successfully execute this model with the release of In Rainbows in 2008, which saw millions of downloads worldwide. Many indie artists are using the PWYW method as a gamble. Realistically, most people will probably download your album for $0, but every once in a while you might get a very generous benefactor. I remember one time I was hawking my old band’s EP for $5 at a Warped Tour stop in New Jersey, and after hearing us, a young woman offered $20 for the 5-song EP that we recorded in our singer’s basement. She was heavily intoxicated and clearly incapable of making financial decisions, so I declined her offer as many times as possible before she simply shoved the $20 in my face. I gave her $20 worth of merchandise and sang her a few tunes on my ukulele, making damn sure she got her money’s worth, as that was the first (and last) time anybody paid me $20 for my music.

Finally we’ve arrived at the current trend in indie music, the freemium model. When I was going to university for marketing, I had always heard a term called “loss leader” which is a strategy that works well for major corporations. A loss leader is a product that the company sells for a low price or gives away in order to drive consumers to their establishments in the hopes that they will buy other items on which the company will profit. McDonald’s sells $1 large drinks in the summer in hopes that the customers will buy Big Macs and whatever other expensive crap they sell. It usually works. In the music industry, time and time again artists are realizing that the best money they’ll make is on the road. And how can you guarantee that people will come out to see your concert? Well, you can’t really, but giving them free music is definitely a start.

Recently, U2, one of the biggest bands of time immemorial, released their latest album for free on iTunes to all of its users. In all of my years avoiding pop radio and television, I suddenly found myself with a copy of an album which I had previously gone out of my way to avoid. I’d be lying if I didn’t enjoy the U2 tracks that came up on my shuffle, but will I ever go see them live? Probably not, but if it were a local band whose concert I could afford attending, I would definitely be more inclined to go than if they were charging me $10 to listen to their album.

We’ll touch on pricing again as we get into the 4th P, Promotion, covering topics such as discounts and incentives, but for now this is most of what you need to know in order to start pricing your album. Tune in next week to read about place; also known as distribution.

As an artist, you are your product. Your album, your live show, your image, your prose. Out of all of these factors, recent studies show that musicians earn the most income on the road. I’ve always been more of a studio geek than a stage presence, so in this article I’m going to focus on one of the most important products in the music industry: your album. First of all, let’s define album. Is it a single? EP? Full length? Is it digital, or on CD, or vinyl? You’ll likely want to choose the right kind of format for your genre; for example country artists are still moving CDs, many indie artists are selling large numbers of vinyl records, and digitial releases have never been more successful.

Once you’ve figured out what your release will be, you’ll want to start focusing on packaging. Packaging is the visual and physical representation of your product before it hits listener’s ears. Important aspects of packaging consist of cover art, track listing, and liner notes. Cover art is easiest to achieve with digital releases, as you often only need one image to act as the cover of your album. Track listing is also as simple as writing up a text document of the songs included on the album, which order they’re in, and each song’s length. Liner notes may take a little longer to create, as they include lyrics, credits, art and photography contained within a .PDF document. Barriers to physical releases (CD, vinyl, cassette) consist of creating front and back album art including barcode/UPC, designing the actual CD face, and artistically creating the layout based on the format’s physical space limitations. Not only are physical releases more costly to produce, but they often take longer to complete.

discmakers
DiscMakers has about a million options for physical packaging

In order to create a successful product, the music, lyrics, and recording quality need to be good, but I’ll leave that topic alone in the hopes that you’ve already achieved those traits before preparing for release. When you are finally ready, you can use the checklist below to narrow your focus.

– Your album is a single, EP, or full length
– Your product will be released digitally, on CD, vinyl, cassette, or all of the above
– You have album art/professional photography, track listing, and liner notes

Above all, you should only release your album once it’s ready. If the songs are poorly performed, or the art isn’t appropriate, the audience will recognize that and respond accordingly. One question I always ask myself is “am I proud of this?” If I am, then I can move forward. If I’m not proud of my work, I go back and tweak every little thing I can until I’m satisfied. I encourage you to take pride in your work and never try to run before you can walk.

Next Phase: Learn How to Price Your Album

Marketing is often known as selling or advertising a product or service, but it’s actually part of a much larger process. The marketing mix, or “4 Ps”, consist of product, price, place, and promotion; individual concepts which we will explore further in future blog posts. When you are ready to begin the marketing process, the first step is to define your target market. Your target market is the group of consumers who have common traits, needs, and desires. The essential question you have to ask yourself is, who are my customers? Males aged 18 – 25? Hispanic women? Jewish pre-teens in New York?

Marketing MixThe easiest way to define your target market is through demographics. A market’s demographics often consist of age, gender, race, occupation, and location. Other statistics included in a target market’s demographics are how they buy what they buy, where they buy what they buy, etc. If you’re a musician, how will your target market access your songs? Will they have enough money to purchase a vinyl record instead of streaming your album online? Do they live in the location in which you’re touring? Are they old enough to get into the club that you’re playing this weekend? These are all important things to think about when trying to increase your visibility among your target market.

Visibility is exactly what it sounds like. How visible is your music? Do music fans even know you exist? How can you increase visibility? Visibility goes hand in hand with reach. Reach is the total number of people that have been exposed to your music at any given time. Thanks to the internet, reach and visibility are limitless, providing millions of ways to get your music out to fans and gain new ones. Websites like Facebook, SoundCloud, and BandCamp allow for you to connect with consumers socially in ways that you never could have before, guiding them toward your brand and your products. Unlike the internet, geographical location can drastically limit your reach. For example, if you live in a small town of 5,000 residents and you’ve played the same bar every weekend for a year, your overall reach starts to dwindle as you begin to tap out your market. This is why touring is the most lucrative industry for musicians right now.


One last thing to think about before you begin your marketing campaign is branding. Your brand is who you are, what you represent, and what you hope to sell to your audience. A brand can be a lifestyle, a logo, or even a political or religious ideation. Just off the top of my head, California punk rock band Black Flag’s logo is something that has nearly transcended the band itself, representing “rebellion and anarchy” in the punk community and beyond. Branding can be one way to increase visibility, and acts as an overall component of every successful marketing campaign.

Black Flag logo
Next Phase
: A 4-Part Series on the Marketing Mix