How can musicians make money in the music industry today?

Gas up the car/ Try to make a little change/ Down at the bar/ I can get a straight job/ I've done it before/ Never minded working hard/ It's who I'm working for. (Gillian Welch, Everything is Free, 2001) It is pretty tough for the averagely successful songwriter to make a living. It is much tougher than it used to be. (Chairman of the British Academy of Songwriters, Composers and Authors, Patrick Rackow, 2010) Our album sales have dropped consistently for the last five years. We're constantly looking for new revenue streams. We've never relied on album sales to make money. (Manager of pop band McFly, Matthew Fletcher, 2008,)

Introduction In order to make money from music one doesnt just have to have talent. There are more musicians who are not earning anything from their music than there are those for whom it is the sole source of their income. Taking ones passion and ability to the point where one is earning a full-time salary from it is often one of the most challenging parts of being a musician. Some people desire to become educators, some to be publishers and promoters of music. Some people desire to become performers or composers, others to be sound engineers or music technicians. In many cases, people desire to be a combination of these. But none of these are necessarily easy to attain as fully paid professions. The aim of this essay is to critically examine the methods by which UK musicians can generate revenue from their craft in the 21st century, with a specific focus on popular music genres and artists working within this field. In this essay, the term popular music is defined as broadly encompassing the following genres and their relevant sub-genres: Pop, Rock, Hip Hop/R&B, EDM, Electronica, Indie, Metal , Country and Blues. This essay will discuss the changing nature of the contemporary popular music industry and how developments in technology, audience listening behaviours and recent economic factors have had an impact on artists revenue streams and the challenges artists face in making money from their work in the UK in 2011.
Music fans don't usually think about how the artists they love get by. Often they assume that if an artist is on the cover of a magazine or just gets some good press, they must be rich that is, if they think about it at all. (Chief Editor of Neumu, Michael Goldberg, 2001)

Recorded music & the Internet In the latter part of the 20th Century (1960-1999), the established routes to

potential fame and fortune for popular music artists in the UK were to either record a demo and tout it around the various record labels, or play as many gigs as possible at small venues around the country in the hope that an A&R scout would see them and sign them up. Getting the all important record deal was the be all and end all for many popular music artists. Once signed to a label, the musicians could then rely on the backing of a business organization who would provide them with an advance, produce and market their releases and distribute the (presumed) lorry-loads of money that would keep them in spandex, stretch limousines and chimpanzee chums called Bubbles (or whatever their chosen excess was). For many aspiring pop musicians, getting signed to a major record label such as EMI, Virgin, Island, Sony or Polydor was their ultimate goal. But is this still the case today in 2011? In past decades, album and single sales (whether it was vinyl, cassette or CD) were the primary source of income for pop artists. This was usually bolstered by multi-date concert tours and merchandise sales. Whilst these are both still mainstays of the financial incomes for popular artists, in recent years musicians have also had to use other mediums in order to build up their monies, or increase the popularity and awareness of their music. Not just artists at the lower or middle level, but also at the very top. The internet and advances in mobile technology, such as the iPod and Smart Phones, have unquestionably changed the way many listeners consume and listen to music. The question is: has this been a positive change or a negative change? In the late 1990s, with the rise in popularity (and quality) of the MP3 and the launch of peer-to-peer file-sharing sites such as Napster, the established record industry suddenly found itself on the back foot. The traditional audio formats, which had previously generated huge revenues, came under serious threat. Beginning at the turn of the new millennium, sales of albums - and particularly CD singles - slid into a downward spiral from which they have yet to recover:
Between 1983, when CDs were launched, and 2001, British album sales more than doubled in volume, while quadrupling in value. In 2003, however, global recorded music sales were down 7.6 per cent, the fourth consecutive year that sales fell. (Barfe, L, 2004) Total sales by debut artists in the global top 50 album chart in 2010 were just one quarter of the level they achieved in 2003 (International Federation of the Phonographic Industry, 2011) The CD as it is right now is dead. (CEO of EMI Music, Alain Levy, 2006)

With many record labels recently forecasting doom and gloom, whilst wrestling with plummeting music sales worldwide, it would be understandable to think that there was no hope for artists trying to make money through the established route of releasing albums and singles. If increasing numbers of listeners are busy illegally sharing and downloading music for free, how can artists who are wishing to make their way in the world of popular music actually earn a living from releasing their material? What are the prospects for an aspiring rock/pop/rap star getting a financial return on all their hard work, sweat and tears? Well, it all depends on who you listen to. If you listened to certain segments of the mainstream recording industry, it would be easy to wonder why any musician would bother trying to sell their recorded music in this day and age:

Meaningful action to tackle illegal downloading remains absolutely critical if we are to stabilise British music sales, let alone return to growth. Without it, investment .in British musical talent will begin to dry up. (CEO of the British Phonographic Industry, Geoff Taylor, 2011) Everyone has woken up to the reality, which is that illegal downloading is murdering the music business. (Ex-Creation Records owner, Alan McGee, 2011)

In this age of file-sharing and online streaming platforms, it would seem that people are less willing to actually buy music to listen to at home. Even when they do purchase music online, it seems they are much less interested in buying whole albums and instead cherry pick individual tracks from various artists. Billy Corgan, lead-singer of alternative rock band The Smashing Pumpkins, recently claimed that the likes of iTunes had all but killed the music album:
There is no point. People don't even listen to it all. They put it on their iPod, they drag over the two singles and skip over the rest. The listening patterns have changed, so why are we killing ourselves to do albums, to create balance and do the arty track to set up the single? [The album] is done. (Corgan, B, 2008)

Millions of users around the world simply log-on to websites such as Spotify, Rhapsody, Emusic or Last.FM and access online playlists where they can listen to music, either for free or at low cost, without ever having to purchase CDs or MP3s. With artists work being so readily, and often freely, available on the internet, how can they get a return on their investment? Whilst most of the online streaming services do pay royalties to artists, the money collected is a fraction of what artists and labels used to receive from sales of the traditional audio formats. If we listen to the prognosis put forward by the sources quoted above, we might as well all give up now and go sign on at the job centre and leave our musical aspirations in the amateur realms of hobbydom. If the internet has apparently killed the CD and album sales, what hope is there for artists to make money from recording their material? Well, perhaps things are not so bad as some commentators like to make out. For instance, here is an illuminating quote from the International Federation of the Phonographic Industrys 2011 executive summary:
Digital music revenues grew by an estimated six per cent globally in 2010 to US$4.6 billion, accounting for 29 per cent of record companies' trade revenues in 2010Digital channels now account for 29 per cent of global music industry revenues, up from 25 per cent in 2009. Growth in 2010 was particularly strong in Europe (up nearly 20 per cent), while sales of digital albums rose strongly in major markets up 29 per cent in the UK, 43 per cent in France and 13 per cent in the US. (IFPI, 2011)

In a stunning moment of foresight back in 1995, the legendary pop maverick

Prince was quoted as saying:

Once the Internet is a reality there won't be any need for record companies. If I can send you my music direct, what's the point of having a music business? (Prince, 1995)

For artists the world over this is now certainly the case. With the likes of cheap digital distribution services such as CDBaby and TuneCore it is possible for an artist to sell their music directly to consumers without the need of getting signed by a record label. Whilst being nearly catastrophic for the mainstream recording industry, the dawn of the internet age has actually been a boon for the majority of musicians, both famous and obscure. Social networking platforms such as Facebook, Bebo, MySpace and Twitter have enabled artists to promote and market their material to worldwide audiences for free, with the only investment being their time.
The reason every group and its mother is hitting the road is to shore up their income against the decrease in album sales. Playing live is now a necessary part of making a living from music (Sullivan, C, 2008)

So, what about live performance? Surely it is a reliable source of income for any musician today? Live music is apparently booming in the UK in 2011, isnt it? Again, it depends on who you listen to. With the overbearing licensing laws that were introduced in 2003 by the previous Labour government, it would seem that many small to mid-sized venues have been struggling to keep going or have closed their doors for good. In the last year alone, numerous venues such as The Luminaire, The Astoria, The Halfmoon (Putney) and The Point have closed in the UK. Fergal Sharkey, the current CEO of the trade organisation UK Music, commented in a recent interview with the Guardian that:
Things cannot continue like this, not without long-term consequences. It's a good thing the Beatles weren't trying to make it in 2011. (Sharkey, F, 2010)

Musicians nowadays have had to diversify and tap into multiple revenue streams in order to build up their incomes. Contrary to what some commentators in the recording industry have said, the Internet has enabled musicians to access audiences and revenue streams that were previously out of reach, or didnt exist.

The most common forms of income for todays musicians are as follows: Production music libraries Royalties collected by agencies such as PRS / MCPS / PPL Online streaming Ring Tones Licensing to 3rd Parties (compliations)

Club plays Radio/TV plays Live performances & merchandise Synchronization rights (films, games, adverts) Sponsorship

Publishers