Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money

Posted on December 2nd, 2012 by Kristin Thomson in What We're Learning. 12 Comments

Part 4 of our mythbusting series | January 9, 2013

Assumption 4. “In a post-Napster world, musicians make all of their money from selling t-shirts/merch


Our final stop in this data-driven series looks at income from merchandise and branding.

There’s a common meme that goes something like, “everyone knows musicians make all their money selling t-shirts”. Yes, some bands do make money from t-shirts and merchandise, but the majority don’t, and it certainly isn’t all of their money.

To musician advocates like Future of Music Coalition, this is one of the most disheartening comments to hear routinely – that society sees more value in a band’s name on a t-shirt than in their creative output, and that it also thinks that this is the preferred way for artists to be compensated. (We wrote an entire treatise about this in 2000, if you care to visit the archives)

But, as with other issues that we’ve tackled in this series, there is a grain of truth to it. Let’s face it, in a world where sound recordings are ubiquitous and free/nearly free for consumers, some bands have turned to making money on other things that are either tangible, unique or exclusive. This includes merchandise, licensing your brand or likeness, or endorsing some product.

In our last two posts, we talked about income from live performances and sound recordings and the associated caveats. In this section, we look at some qualitative and quantitative data about income from merchandising and branding that we collected as part of the Artist Revenue Streams work. Some of this was presented at MIDEM in Cannes, France in January 2012. The three main points are:

  1. Income from merchandise is only relevant for a limited number of musicians.
  2. Artists have many new ways to make money off their brand, but widespread participation is difficult.
  3. For some bands, corporate sponsorship and fan funding is filling in where traditional revenue sources and label support have dropped off. 

Let’s look at some data.

The definition of brand-based income

First, what do we mean by “brand”? Essentially, it’s income tied to a musician’s creative self, but ancillary to what they earn based on their sound recordings, compositions or performances. T-shirts and apparel are the most common versions of this, but there are more possibilities than ever for bands and artists to make money off their artistic brand or persona, anything from perfume lines (Tim McGraw cologne), to headphones (Beats by Dre), to having an avatar in a video game (Tom Morello avatar in Guitar Hero 3).

For this study, income from “brand” could include any of these:

  • Merchandise sales
  • Ad revenue: or other miscellaneous income from your website properties (Google AdSense, commissions on Amazon sales, etc.)
  • Fan funding: Money directly from fans to support an upcoming recording project or tour (Kickstarter, Pledge Music, Indie Gogo)
  • Fan club: Money directly from fans who are subscribing to a musician’s fan club
  • Persona licensing: payments from a brand that is licensing a musician’s name or likeness (video games, comic books, etc)
  • Product endorsements: payments from a brand for a musician endorsing or using their product
  • Acting: in television, movies, commercials
  • Sponsorship: corporate support for a tour, or for  band/ensemble
  • Grants: from foundations, state or federal agencies

On the survey, we first asked respondents about income from merchandise sales, such as t-shirts, posters and apparel. Then we asked some separate questions about other sources of income related to their brand. We also discussed these revenue streams with all our interviewees, and captured data about merchandise and brand income in the financial case studies.

Survey data about income from merchandise

As mentioned in previous installments, one of the core questions at the beginning of the survey asked musicians to allocate their music-related revenue amongst eight different buckets such as income from sound recordings, compositions, and live performance. One of those buckets was merchandise.

For the 5,371 respondents, the aggregated percent of income derived from merchandise – that’s non-musical items like t shirts, hats and posters –  in the past 12 months was 2%.


On the aggregate level, income from merchandise is the smallest bucket; less than the percent of income from performances (28%), sound recordings (6%) or compositions (6%).

While the pie chart above shows that the aggregated average of income derived from merchandise for 5,371 respondents was 2%, the range of income derived from sound recordings ran from 0% of income to 100% of income, as indicated below.


88% of survey respondents reported that 0% of their income was derived from merchandise in the past 12 months. Indeed, less than half  a percent of respondents made more than half of their income from merchandise.

Income from merchandise by role and genre

Now, remember that the survey population includes a number of musician types that are not typically associated with merchandising; folks like composers, session players, salaried orchestra players and teachers. Is it possible that these musicians’ answers have unduly influenced the data on merchandise income? Let’s look at data by role and genre.

When we look at the income from merchandise by role, shown below, we see that survey respondents who said they were recording artists (2.9%) and/or composers (2.7%) made a slightly higher percentage of their income from merchandise than musicians in other roles. (Note that survey respondents could check off multiple roles). But, even by role, the percentage never floats above 3% of aggregated income.



The differences are more noticeable by genre, with jazz and classical attributing less than 1% of their aggregated revenue to merchandise, and rock earning up near 6% from merchandise. But, it’s still a small portion.


 Perceived changes in income from merchandise

We also asked them about changes in revenue from merchandise sales over the past five years. The chart below shows that the perceived changes in income from merchandise are relatively equal. But, for about 73% of our survey respondents, the question about merchandise income was “Not applicable” to their career trajectory. This underscores the fact that are survey population includes composers and songwriters, salaried orchestra players, session musicians and teachers – all of these being sectors in which merchandising and branding are not typically part of their revenue picture.


Looking at the same data by genre (below), we see some differences in participation rates – with more rock and hip hop musicians taking part in the revenue stream, and another indication that fewer jazz and classical musicians are. But there is very little data that indicates that merchandise income has significantly increased or decreased for any sub-population over the past five years.


This top-level survey data suggests that income from merchandise is only relevant for a limited number  of musicians. And, even for these musicians, income from merchandise is a small piece of most musicians’ revenue pies.


Survey data about income from branding

While merchandise sales is the most common source of income related to an artists’ brand, we asked about other brand-related income as well — everything from grants to money from acting.

Back to our “revenue pie”. For our 5,371 survey respondents, about 7% of their income in the past 12 months fell into the  “other” category. So we asked a couple of follow up questions to figure out what these ancillary sources of income might be.


Note that the chart above was a simple yes/no checkbox for each item. It captures whether they earned any income from these activities in the past 12 months. So we can only gauge the level of participation in these revenue streams, not the dollar value of these streams.

About 10% of survey respondents had earned some income from grants in the past 12 months. This can be money from a state or local arts council, or a private foundation.

About 5% of our survey respondents had received some income from fan funding in the past 12 months. This can be direct appeals to an existing fan base similar to successful efforts by Jill Sobule or Jonathan Coulton, or they can be managed through sites like Kickstarter or Pledge Music.

Lower on this chart are revenue streams where leveraging your brand takes a certain amount of pre-existing fame. The fact that only a small percentage of survey takers have earned money from, say, persona licensing, shouldn’t be a surprise given the high hurdle it takes to get there.  And, for some of these revenue streams – corporate sponsorships and product endorsements, for example – it might be that the individual musicians don’t see that money in their pockets, but that the money pays for tour expenses or provides them with free goods (drum heads, cymbals) in exchange for their support.

Merchandise and branding income in financial case studies

Our financial case studies can also give us a sense the income earned from branding and merchandise.

For two of the case study subjects – the contemporary chamber music group and the salaried orchestra player – neither merchandise nor branding are part of their revenue over time.

The jazz bandleader sells some recorded music at shows, but no merchandise. However, he’s had some success with grants and awards, based on his profile in the jazz world.  In fact, grants made up 7.5% of his gross income from 2006 to 2011.

The jazz sideman, similarly, does not sell merchandise, because his primary role is supporting other bandleaders. But he, too, has had some success with grants to fund his own projects. But is a grant just free money? Hardly. Check out the Anatomy of a Grant for details about how grant money is spent.

The indie rock composer/performer sells recorded music and, more recently, some merchandise at shows where he’s performing his own music.  In fact, income from merchandise seems to be a healthy part of his revenue pie now, according to his own calculations.

But when he was a salaried player, he didn’t benefit directly from merchandise sales (though the band did sell quite a bit).  He was paid out of the band’s corporate fund, which included accumulated profits from live performance, label advance, record royalties, merchandise sales, licensing and digital sound recording performance royalties. In other words, instead of getting a cut of all these specific revenue streams, he was “bought out” and instead paid a steady salary.

The possibilities of artists making income from their brand have vastly expanded over the past ten years, as more advertisers, lifestyle brands, beverages, video games and beauty companies have turned to musicians to endorse or represent their products. But looking at our data, participation in these ancillary revenue streams is limited. And, if they are participating, it’s probably not flashy things like promoting their own Tequila or endorsing Rolex watches, but receiving a grant or financial support from their fan base (both of which have their own costs). The data about branding suggests that there are more opportunities for musicians, but widespread participation in these new revenue streams remains limited.


Interviewees thoughts about merchandising and branding

The data above suggests that merchandise and branding is, on average, a small piece of the survey respondents’ aggregated revenue pie. But the US musician community is large and diverse, and there are a number of genres for which merchandise and branding is an important or growing part of their business.

During our interviews with a variety of full time musicians – from jazz composers to metal bands – many demonstrated an impressive understanding of the value of their personal or band-based brand, and they told us how they were using a variety of tools and business strategies to maximize it.

We talked with a very active touring rock band who saw increases in merchandise revenue when they brought on a dedicated merch staffer.

We interviewed a hard rock band that was seeing the value in limited edition merchandise, only sold at specific shows or via their own website. Not only was it making them more money, but they were increasing their connection with fans.

“Coming to the shows, having one of those shirts that only 200 people have, they love feeling like they’re a part of something special.”
– guitarist, hard rock band

And some managers and attorneys talked about the differences in opportunity by genre, especially about unique ability of rap and hip hop artists to forge these relationships with corporate entities and lifestyle brands.

While we found some classical and jazz artists venturing into the worlds of merchandise and branding, there are other factors in play. The first one being priorities. In classical music, many “artist managers” are primarily booking agents. Classical music managers we talked to said they needed to dedicate their limited time and resources on building a “brand” for the artist’s primary audience: influential curators and performance hall agents. One manager told us:

“[pursuing licensing or branding opportunities] would be a fun thing to do, but it takes away from our main purpose: to promote the artist with orchestras or with presenters.”
– US classical manager

And, one group manager put the branding and marketing conversation in perspective, saying that they needed to be realistic and strategic in what they focus on.

“We’re very aware that we exist in a niche. We need to bring people into the niche and deepen our relationship with them, rather than flinging ourselves all over the place.”
– classical choral chamber group

Income aside, there are other reasons that bands and musicians have been pursuing these branding opportunities. It’s no secret that label budgets have been going down. As a result, musicians are seeking other sources of money to support their work.

Some artists told us how they’re turning to corporations to support tours, or projects.

“For us, corporate sponsorship of videos has been a total revelation…” 
– US rock band

And, finally, some told us about how they’re engaging their fans in the process and how important it is to embrace it.

“Artists have to feel no shame about asking their audiences and their fans for support and money….”
– US musician/performance artist


So, are musicians making all their money selling t-shirts? If we’re just talking t-shirts and posters, the data suggests that income from merchandise is a small piece of the pie, and only relevant for a limited number of musicians. In aggregate, income from merchandise only accounted for 2% of survey respondents’ income. Even looking at differences by role or genre, the percent of income attributed to merchandise sales remained below 6%.

But, the survey data also examined the range of other sources of brand-related income; everything from grants to persona licensing.  Just how much money artists or bands can make on their brand varies a lot based on role, genre, career profile, and other criteria. The qualitative and quantitative data collected suggests that there are more opportunities for musicians to leverage their brand, but widespread participation in these new revenue streams remains limited.

A third takeaway relates to the momentous changes in the larger music ecosystem. Changes in label income have reduced label advances, tour support, and budgets across the board. As a reaction, bands and artists have turned to new sources of support for recording projects or tours, whether through fan-funding sites, grants or corporate sponsorships. Even ten years ago, some of these strategies were either unheard of, or impossible for anything but mega-stars to pull off.  But the data suggests that, for some bands, corporate sponsorship and fan funding is filling in where traditional revenue sources and label support have dropped off. 

So are t-shirts and Red Bull sponsorships the way bands will make money in the future? For a few, these will be important pieces of a larger revenue pie, but for others, participation in these revenue streams isn’t possible.


A wrap on mythbusting

One of the key reasons that Future of Music Coalition embarked on this Artist Revenue Streams project in 2010 was to bring some tangible data to the ongoing debates about copyright, compensation and creativity.

The mythbusting series used qualitative and quantitative data collected in this project to examine four of the common assumptions about musicians and money: that they’re rich; that they make all of their money from touring; that they don’t make any money selling records; and that they make all their money selling t-shirts or merchandise.  As stated throughout this blog series, each of these assumptions is based on a grain of truth. What usually makes them incorrect is thinking that (1) all musicians operate under similar conditions and that (2) the existing music ecosystem is now so broken that traditional revenue streams based compositions, sound recordings or performances no longer work or generate any value.  Neither of these is true. And it’s when we get into these “all or nothing” ends of the debate that we run into trouble. As much as we all desire easily digestible facts or a way to describe “typical” musicians, real life is much more complicated. And if we want to truly understand and quantify the change, we need to acknowledge the complexity.

We also hope that readers better understand the true diversity of the American music landscape. There is an army of musicians – from composers, to salaried orchestra players, to session musicians – that have career structures that are not easily supplemented by t-shirt sales or other ancillary revenue streams. This should in no way diminish their value or importance; we simply need to remember that the community of creators is large, diverse, and specialized, and does not lend itself to one size fits all solutions.

Will this mythbusting series put these debates to rest? Probably not. But we hope that the date provides musicians, advocates and fans with a better sense of the changing nature of the music ecosystem, and some data to reference in ongoing conversations.


12 responses to “Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money”

  1. […] will be more analysis coming on the FMC website over the next few days, and we’ll be reading with interest to see […]

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  4. […] Future of Music Coalition is leveraging its Artist Revenue Streams data to engage in some mythbusting regarding how musicians make (or don’t make) […]

  5. […] Industry < rtine Get flash to fully experience Pearltrees Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money | Artist … <i>On Thursday, March 15, 2012, Artist Revenue Streams co-directors Kristin Thomson and Jean […]

  6. […] Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money […]

  7. […] is not the same thing as “the recorded music business”—especially for musicians. A recent survey by the Future of Music Coalition found that, on average, 6 percent of musicians’ income comes from sound […]

  8. […] merchandise and record sales certainly go a long way to supporting your favorite artists, don’t think this an upward trend. Right now, there is a major revenue gap forming around popular music and the […]

  9. […] merchandise and record sales certainly go a long way to supporting your favorite artists, don’t think this an upward trend. Right now, there is a major revenue gap forming around popular music and the […]

  10. […] is not the same thing as “the recorded music business”—especially for musicians. A recent survey by the Future of Music Coalition found that, on average, 6 percent of musicians’ income comes from sound […]

  11. […] so prevalent in the music industry, that studies have even been conducted, such as this one by the Future of Music Coalition, that found touring is a much bigger piece of the pie […]

  12. […] Common Assumptions About How Musicians Make Money,” Future of Music Coalition (Dec. 7, 2012), 6. See, e.g. Jacob Ganz, “A Nerdier Guide To 2012 Summer Music Festivals Than You Require,” […]