Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money
Part 2 of our mythbusting series | December 7, 2012
Assumption 2. “Musicians make all of their money from live shows/touring”
Another common assumption is that musicians make all of their money from live shows/touring. Again, this is based largely on how the public interacts with musicians. They buy tickets to shows, and they see the size of crowds at concerts. Using basic math, a music fan can estimate how much a concert might be grossing. Coupled with the widely reported decline in album sales, bands constantly on tour and even impressive stagecraft, many music fans assume that live performance money is musicians’ bread and butter.
Many musicians do make money from live performance, and for some, it is their most important and consistent revenue stream. But, there are four caveats to consider:
- income from live performance rarely makes up 100% of a musician’s revenue stream
- gross tour income figures don’t factor in the expenses associated with touring
- touring is a revenue stream that requires constant output; and
- not all musicians are live performers.
Let’s look at the data.
Survey respondents’ income from live performance
On our survey, the majority of respondents – 58% – allocated some of their income to live performance in the past 12 months – anything from 1% to 100% of their musician income (N=5371). This flip side of this is that 42% – or 2257 respondents – said that 0% of their income in the past 12 months was derived from live performance.
Does this surprise you? There are potentially three things going on here.
First, not all musicians rely on live performance. The survey included responses from a range of musicians, including songwriters and composers, session players who make their money doing recording sessions, and teachers.
Second, the survey question asked specifically about the a 12 month time frame. If an artist is in the studio or taking a break, perhaps income from live performance is simply on hiatus.
The third relates to how musicians define and describe their work. The survey included a separate questions about income from being a salaried player, which is typically based on live performance. But these musicians would categorize their work in other way, as we will see below.
Number of shows
How many shows are they playing? The largest proportion of respondents to this question (N=2023) said they were playing between 11 and 50 shows a year. But over 400 respondents said they were playing more than 100 shows per year.
Percent of income derived from live performance
We also asked survey respondents to allocate their music-related income amongst eight possible buckets: income from compositions, income from live shows, income from being a salaried member in an orchestra or ensemble, income from sound recordings, merchandise or branding, session work, teaching and other.
This pie charts shows that – in aggregate – income from live performances accounted for 28% of survey respondents’ income in past 12 months.
The importance of live performance income was also something we heard from various interviewees. A chamber music group told us:
The percentage of revenue associated with live performance varied according to role and genre. For instance, for those who said rock/alt-rock/indie rock or punk was their primary genre, income from live performance accounted for 44% of their income in past 12 months.
And, for those who said jazz was their primary genre, income from live performance in aggregate accounted for 38% of their music-related income in the past 12 months.
The percentage of income from live performance in the past 12 months for some of the other genres was:
• Country (N=262): 45%
• Rap/hip hop/urban (N=93): 36%
• Classical (N=1863): 10%
Why is the classical genre revenue percentage number so low, when performance is such a key part of their livelihood? Because most classical survey respondents are either paid as either salaried performers or freelancers, data which was collected separately. See below.
We can also look at the percentage of income from live performance in the past 12 months by various characteristics:
• For “full time” musicians, spending more than 36 hours a week and earning more than 90% of their personal income from music (N=1619): 19%
• For “emerging” musicians, less than 5 years in biz + more than 36 hours of workweek + earning more than 90% of their income from music (N=176): 23%
• For “established” musicians, 6-20 years in biz + more than 36 hours of workweek + earning more than 90% of their income from music (N=608): 19%
• For “old guard” musicians, more than 20 years in biz + more than 36 hours of workweek + earning more than 90% of their income from music (N=835): 19%
Looking at the revenue data for “full time” musicians, emerging artists’ revenue pie is slightly more dependent on income from live performance than more established artists.
Overall, the survey data suggests that income from live performance is an important part of the revenue pie for musicians who perform.
Survey respondents’ income from being a salaried player
The survey also asked respondents whether they earned any income as a salaried player in an orchestra or ensemble. For most musicians, being a salaried player means you are – essentially – paid for live performance, but instead of being dependent on varying amounts of money from gigs, you get a regular paycheck. This is quite common in the orchestral world, but it also happens in other genres.
Looking at all the survey respondents, 19% of their gross income – in aggregate – came from being a salaried player.
This varied by genre as well. For rock musicians (N=569), income from being a salaried player only amounted to 4.3% of their aggregated income. But for classical musicians (N=1863), income from being a salaried player amounted to 36% of their aggregated income.
All their money from live performance?
The top-level data suggests that income from live performance is an important revenue stream for the majority of survey respondents who perform. In aggregate, live performance income accounts for over a quarter of survey respondents’ money, even more if we also consider salaried work as performance-related income.
But is all of their money dependent on live performance? We can also use survey data to test the assumption that musicians make all of their money from this one revenue stream.
Because we asked survey respondents to allocate their income amongst eight buckets, we were also able to isolate those who put 100% of their money in one bucket. Only 6.3% of survey respondents (340) said they made 100% of their music-related income from live performance. And, only 3.9% of respondents (212) said they made 100% of their money from being a salaried player. Another 2.6% (139) made 100% of their money from a combination of live performance + being a salaried player. So, less than 13% of survey respondents make all of their money from live performance.
Trends in income from live performance and salaried work
The survey data above reflects musicians’ answers about income “for the past 12 months”. But we also asked musicians to reflect back and tell us whether their gross revenue from playing live shows/performances had increased, stayed the same or decreased over the past five years.
The chart of all respondents shows an even split: for 28%, their income from live performance has gone up. For 20%, it has stayed the same, and for 28% it has gone down over the past five years.
We also asked them why. For the 28% who said tour income had gone up, the primary reason was “more shows”, or “career growth”. For the 28% who said it had gone down, the primary reason was “playing fewer shows”. Pretty self-explanatory.
The caveats associated with income from live performance
Finally, we need to look at four caveats related to touring and live performance.
1. Touring costs money.
Some artists gross eye-popping amounts of money on tour. The most successful tours are judged by the box office take – the gross amount in ticket sales. But the situation is more complicated than that on both the income side (which can also include additional money for the artist based ancillary income like VIP ticket sales, sponsorships) and especially on the expense side.
On the expense side are all the elements that make it possible for the band to perform in different locations – everything from gas to staff to backline rental. Even the most successful big ticket tours can lose money if they aren’t watching their expenses (see U2, Lady Gaga).
These costs are never reported publicly. Usually the only people who know about the cost side are the band members and, if they have them, their booking agent, their manager(s) and/or their accountant.
On the survey, we asked respondents about trends in the costs of touring, including gas, hotels, flights, crew, stagecraft, booking agent fees, and so on. Since this is a chart focusing on costs, the red bars indicate where costs have increased the most.
In every instance, the common costs have either increased or stayed the same. Gas and airline tickets, in particular, were identified by the largest percentage of respondents as increasing over the past 12 months.
How much a band can make from live performance depends a lot on these costs, and keeping them under control. Smart bands and managers spend time budgeting before embarking on a tour to ensure that tours are in the black.
The difficulty in understanding touring cost is another reason that our financial case studies are so valuable. In each instance, the subjects are highly dependent on income from playing live, whether they are a chamber music group, a jazz bandleader, a jazz sideman, a professional orchestra player, or an indie rock composer/sideman. And in each case, we have financial data that makes it possible to balance live performance income against expenses.
For instance, let’s look at the income and expenses from the chamber music group. The blue bar shows the gross income they’ve made from touring, which is the vast majority of their income. The light blue bar below the zero line shows the related touring expenses. The grey line indicates the net. Clearly, they are in the black, but touring certainly has its costs.
It’s a similar pattern in another case study of a jazz bandleader. Live performance – the blue bars – is an important part of his revenue stream. Over time, his gross income continues to rise, but so do his expenses. In fact, more than 80% of the bandleader’s income goes straight out the door to pay his sidemen and touring costs.
2. Touring costs are not scalable.
The fact that tours cost money underscores another caveat. Unlike revenue streams derived from making recordings or compositions, touring costs aren’t very scalable. The more shows you play, the more money you spend (unless you set up residency, or are paid as a hired gun/freelancer, where costs are not your responsibility).
This was also articulated by our interviewees. A hip hop business manager told us that there’s an expectation that the show production has to be good, and those production expenses just keep going up.
3. Touring requires constant output.
Unlike the money you can make off of sound recordings or compositions, to make money as a performer, you need to perform.
A rock band guitarist summed it up well. Touring has given him a middle class living, but if he stops tomorrow, the cash stops flowing as well.
4. Not all musicians are performers.
And the final caveat, not all musicians are performers. As part of this work, we interviewed and surveyed many types of music creators who don’t perform live – Nashville songwriters, folks who compose for film and TV, session players and singers who do studio work, teachers. They are all part of this ecosystem too, and thinking that “all musicians can make money from live shows” can be a damaging assumption if you don’t remember how diverse this music landscape really is.
So, do musicians make all of their money from touring? According to our qualitative and quantitative data, income from live performance/touring is a significant revenue stream for musicians who perform, accounting for 28% of the aggregate gross income of survey respondents. But, it is rarely their only source of music-related income. Indeed, less than 13% of respondents rely exclusively on income from live performance and/or salaried work.
And, touring itself has its own caveats; touring costs money, it’s not very scalable, and it requires constant output. And, for some musicians, playing live is simply not part of their career structure.
The data helps us understand the value of live performance through a more nuanced lens. Faced with diminished revenue from selling sound recordings or mechanical royalties, income from live performance has clearly become more important for many musicians, but this revenue stream cannot be considered the sole source of income for musicians going forward.
We will publish a more in-depth report about income from live performance – with breakdowns by role and genre – in early 2013.