10 Things How To Music

Top Paid Musicians of 2012 (here’s a hint: it’s not all from Youtube or iTunes)

It’s time once again to take a look at HOW MUCH MONEY MUSICIANS MAKE each year.

Web Watch knows what you’re thinking — with iTunes, the Amazon Music Store, Google Play and other services, let alone the money that comes in from Youtube from display advertising showing with all their posted music videos — that successful artists would almost literally be rolling in dough.

But that’s not the case, as Web Watch has told you before regarding HOW MUSIC ROYALTIES WORK.

Music Money and Success 7th Edition: The Insider's Guide to Making Money in the Music Business
Music Money and Success 7th Edition:
The Insider’s Guide to Making Money in the Music Business

This is especially true if you really take a look at FORBES Magazine’s LIST OF the 25 HIGHEST-PAID MUSICIANS for 2012.  First, let’s take a quick look at theTOP TEN MUSICIANS, and then we’ll do a little more analysis.

  1. Dr. Dre – $110 million
  2. Roger Waters from Pink Floyd – $88 million
  3. Elton John – $80 million
  4. U2 – $78 million
  5. Take That – $69 million
  6. Bon Jovi – $60 million
  7. Britney Spears – $58 million
  8. Paul McCartney – $57 million (tie)
  9. Taylor Swift – $57 million (tie)
  10. Justin Bieber – $55 million (tie)

Trust us when Web Watch tells you, these artists didn’t make their money through anything done online.

  • Dr Dre make his money from handset maker HTC, who bought half of his company for a ton of money.
  • Roger Waters is a concert touring machine. Reports from Billboard says he made $131 million from November 2011 through May 2012.  (no idea how Forbes ended up at $88 million for this list, based on that)
  • Elton John made his money mainly in Las Vegas concerts and a film score
  • U2?  Still on tour
  • Take That made $61 million in just eight days from a concert stand in London.
  • Bon Jovi? Also on tour
  • Britney Spears may not be touring right now, but she has endorsement deals that still keep her face out there in the public eye.
  • Paul McCartney? Also on tour
  • Taylor Swift has endorsements, but also rakes in $1 million a night when she’s on tour
  • Justin Bieber? Also on tour, with tons of merchandise to boot

So, looking at the details a little closer, what’s the one primary thing that all of the Top Ten Musicians have in common?

They’re all – for the most part – making their money on tour.  Of course, they’re on tour to support their latest album (or their overall legacy for some), but the fact remains that if you want to be successful in the music business, it’s not enough to simply get your name out there on iTunes or Youtube.

The key to becoming a success in music has not changed: you’ve got to get your face out there and play for as many people as possible. That’s where the real money is, and doesn’t have to pass through the myriad of companies that all want to take their cut before sending you your $0.0015 per song played.

Do the math: take a theater venue that seats 2,500 people.   Because you have name recognition, but aren’t big enough to demand Madonna-type money for a seat, you only charge $25 per ticket.  That’s fairly reasonable for your epic 2.5 hour concert event, right?

So that would bring in $62,500 for a sold-out show.  The house takes a cut of that, and you have to pay your support crew a fair wage for putting up with your daily crap.  Let’s say that leaves you with a gross of $20k per night.  You do these shows for 180 nights, about half the year.

At the end of the year, you would find yourself with $3.6 million.  And that’s just on the ticket sales.

Merchandise is 100% yours, right?  And let’s say that a standard t-shirt nets you $15 in profit.  Assuming just 1/3 of each sold-out show bought one shirt apiece, that’s $11,250 per night — or a little over $2 million in merch sales for the year for just that one shirt.

Now, that is a lot of assumptions on the math, but even if your band is 1/2 that successful when starting out – which, quite frankly is a reasonable expectation (we’ve heard your band, and you kinda suck right now) – you’re still looking at a reasonable ton of money coming your way if you handle your finances right.

So there you go – you now have a gameplan forHOW TO BECOME A SUCCESSFUL MUSICIAN:

  1. Get noticed, so you have name recognition and some sort of fan following
  2. Go on tour and sell lots of stuff, while keeping your overhead relatively low
  3. Profit!