Category Archives: Writing

Streams and Earnings: 75% of Sampled Artists Earned Less Than $3/month

What does the typical professional musician earn in streaming royalties? Does spending a ton of money on mixing and mastering boost the likelihood of popularity on streaming platforms? What about music videos, social media ads, and publicists? What separates the talented-and-popular from the talented-and-obscure on these platforms?

To explore these questions, I asked my musician peers to 1) fill out a survey outlining their production and promotion spending and 2) send me digital distribution reports providing a day-by-day account of where and how much their music was streamed during the first eight months of 2020. Excluding a couple of exceptional outliers (more on them later), the result was a snapshot of 40 artists/groups with 2.4 million streams that can be used to understand the artist experience with these platforms. For more background, the characteristics of the data set, and other findings go here.

Streams and Earnings

As predictable is it was, I was still surprised by how skewed stream counts were towards the most popular bands in the group. To give you an idea, here’s what the stream counts of the 10 most popular artists looked like:

The stream counts closely follow a log-normal distribution, meaning the growth is exponential, not linear. Numbers start small, take a while to grow, eventually explode, and most of the action is at the top. Wealth (the top 1% have 30% of it), populations (the seven biggest countries house half the global population), and the length of internet comments (your QAnon uncle won’t shut up) are also log-normally distributed. In this set of 40 artists, the top two had 80% of all the streams, more than the other 38 combined. Crazy, though it makes sense. Even within a single album, I’ll listen to a few songs 500 times and the rest once or twice (my current obsession). The same is true for artists. Most barely get listened to, a tiny number get listened to a lot.

In distributions like this, it makes sense to look at the median stream count (the middle number in an ordered list) to get a sense of the “typical” experience, as opposed to an average that would be pulled upward by the huge numbers at the top. For example, the average stream count of the top 10 above is 233,221, but the median, which would be the average of #5 and #6 in this case, is 40,028. Given that only the top two made it above 200k, it makes sense that 40k would be a better representation of the typical artist experience.

So how much was the median artist in the whole group streamed in eight months and how much did they earn? The median artist was streamed 2,241 times and earned $7.23 in streaming royalties. That means half of the artists in the group earned less than $1 per month from streaming royalties. Even worse, 75% of them earned less than $3 per month. On the flip side, the average production cost for an artist’s most-streamed album was $5,000.

On average, the artists in this group were most active five years ago but, for the 14 artists who were most active in the last two years, the median stream count is still only 3,955 and the median earnings are only $13.05. That said, it’s been 11 years since the third most popular artist was most active, and I didn’t find a strong correlation between being recently active and getting more streams. The median doesn’t change significantly when limiting to non-jazz artists either.

“But Tarik, your study didn’t include mega stars who make millions!” True. The few incredibly popular artists I know had trouble getting their streaming data from management. That said, being an incredibly popular artist is incredibly rare, so that situation is sort of irrelevant to exploring the typical experience. Adding an artist or two with a billion streams to the set of 40 wouldn’t significantly change the median earnings.

If you went to a mid-to-large-sized city and picked a random working musician, I think it’s reasonable to expect that their profile would be similar to a few of the artists who participated in this study. The earnings of the most popular artists in this set ($3,510) are definitely much lower than that of the most popular artists on Spotify, but I think it’s unlikely that the earnings of the median artist in this set are substantially lower than that of the median artist on Spotify. I wouldn’t be surprised if they were actually higher, given that a sizable portion of Spotify’s catalog doesn’t get played at all.

So what do I do with this?

When I was looking for data, I could tell a lot of musicians were embarrassed by how little their music was streamed. When Spotify rolls out its end-of-year stats and the small number of popular artists are plastering social media with their high stream counts, it’s easy to feel like you’re one of the few who are failing. Know that you’re not alone. Most of us are failing!

Most experienced artists don’t expect to make meaningful income from streaming royalties, but I’m surprised how often I hear younger musicians reference their bandmate’s friend’s sister’s ex-boyfriend’s cousin’s song that hit it big on Spotify when they talk about streaming and how they expect to earn money. The reality is that, among this group of mostly-full-time musicians producing quality music, only a few experienced any success being widely distributed on playlists and earning money from streaming. If streaming royalties are part of your income plan, you’d better be damn sure you’re one of those few.

As far as what production/promotion investments were and weren’t correlated with higher stream counts in this group, that’s coming soon. In the mean time, you can read about how streaming platforms compare here.

Platforms: A Stream Pays Artists a Third of a Penny

The charts below represent information gleaned from 2.4 million streams across 29 different platforms from 40 artists/groups. For more on the background and data set, go here.

What’s immediately clear is that Spotify dominates the field, capturing 71% of the streaming activity in the data set, almost 7x as much as the second-place platform, Apple Music.

What’s also clear is that earning meaningful income from these platforms requires an incredible amount of streams. The average per-stream royalty earned in this data set was $0.0032, with royalties varying substantially between platforms. Spotify pays artists $0.0027 per stream.

Imagine a fan falling in love with a new song by their favorite artist, so much so that they listen to it five times a day for 31 days, totaling 155 streams. Among the eight most popular streaming platforms, the most an artist will earn from 155 streams is $1.04. On Spotify, that artist will earn 42 cents.

So what do I do with this?

If you regularly stream music and want your favorite artist to keep producing, make sure to buy something from them! MP3s from Bandcamp or the iTunes store, vinyl, t-shirts, tickets, whatever. The vast majority of artists will never recoup the cost of making an album from streaming royalties alone.

If you’re an artist, do what you can to let your fans know that streaming your music doesn’t offer meaningful support and make it easy for them to buy something from you. It’s true that Spotify’s discovery playlists offer a big boost for a tiny number of artists (the most streamed artist in the data set got 60% of their streams from algorithmic Spotify playlists) but, if you’re not one the lucky few, consider linking to platforms that pay you more when promoting your releases. A stream on Apple or YouTube Music will net you twice as much.

Streaming Research: The Background and Data

Discussions about the music business almost always devolve into anecdotes and opinions, and I think it’s fair to say that most musicians make their moves based on some combination of conventional wisdom, gut feeling, impulse, and the stand-out successes and failures experienced by a few of their peers. In the midst of the constant hustle, few have the time think about why they’re doing what they’re doing and what they can reasonably expect to get in return. That may not be an important question for a person compelled to make music, but it is for a person trying to earn a living selling a product.

To clarify my own thinking and help us all see the landscape a little more clearly, I did some digging and compiled some data from my musician peers to analyze. If you want to skip to the findings, check out:

Platforms: A Stream Pays Artists a Third of a Penny
Streams and Earnings: 75% of Sampled Artists Earned Less Than $3/Month
Artist Investments That Made a Difference (coming soon)

The Landscape

Like it or not, streaming platforms have become the dominant marketplace for recorded music, the last in a long line of technologies that served to unbundle songs from albums, drive down unit prices, render CDs obsolete, encourage subscriptions over purchases, and shrink the revenue pie substantially. Annual recorded music revenues in the U.S. peaked in 1999 at $22.4 billion (inflation adjusted 2019 dollars), with CDs representing 88% of sales. Then came Napster, the iPod, the iTunes store, Spotify, and a long list of well-funded tech giants competing for users by making it cheaper and more convenient access massive catalogs of music. By 2019, revenues were down more than 50% to $11.1 billion, with CDs only representing 5.5% of sales (source). Despite paying artists fractions of a penny per stream, streaming royalties accounted for 85% of U.S. music industry revenue in the first half of 2020 (source).

Napster released 1999. iTunes store 2003. Spotify 2008.

In the background of these tectonic shifts in distribution, the music industry experienced democratizing revolutions in production and education. Recording capability once confined to expensive studios became readily available for home use thanks to advances in computing power and retail recording software/hardware. Recording and instrumental expertise once attained through expensive apprenticeships and instruction began being shared freely on YouTube, blogs, and discussion boards. At the same time consumers were moving towards consumption patterns that net artists a fraction of CD and digital sales, the number of musicians and hobbyists releasing music was exploding. By mid- 2019, Spotify was adding 20,000 songs per day to its platform, a number that rose to 40,000 per day just a year later (source). The Spotify catalog now carries over 50 million tracks, including 700,000 podcasts (source). Competition among artists for attention and revenue is intense and increasing by the day.

The Questions

So what does the typical professional musician earn in streaming royalties? Given these massive industry shifts, does spending a ton of money on mixing and mastering really make sense? What about on music videos, social media ads, and publicists? What separates the talented-and-popular from the talented-and-obscure on these platforms?

The Data Set

To explore these questions, I asked my musician peers to 1) fill out a survey outlining their production and promotion spending and 2) send me digital distribution reports providing a day-by-day account of where and how much their music was streamed during the first eight months of 2020. Excluding a couple of exceptional outliers (more on them later), the result was a snapshot of 40 artists/groups with 2.4 million streams that can be used to find any relationships between streaming popularity and their production and promotion spending.

Out of the 40 artists/groups in the set, 36 are comprised predominantly of professional, full-time musicians who earn the bulk of their income performing, teaching, and producing music. The rest have non-music day jobs but still performed regularly pre-pandemic. 22 of them identified as jazz performers, with the rest roughly evenly split among funk, pop, rock, folk, Americana, electronic, dance, R&B, soul, and rockabilly. Eight of them released music on a record label. The average artist/group in the set has three albums on Spotify, has been actively releasing music for seven years, spent $5k producing their most-streamed album, was at their most active five years ago, and toured 31 cities at their peak.

The Social Dilemma Extended

The Social Dilemma is worth watching. If I had a kid with social media accounts I’d force them to watch it under threat of punishment. As someone without a kid I assume that’s the best way to get them to do things. The documentary clarifies the harmful methods these platforms use to exploit psychology, monopolize attention, and alter behavior. Some important things I think it missed or glossed over too quickly:

The only way to limit the damage these platforms cause is to limit usage, but what if your livelihood depends on hours of daily exposure to social media? Musicians, journalists, social media/marketing managers, the owner of the bar/coffee shop/restaurant down the street. Almost every entrepreneur is in this position to some degree, especially artists, a class of people extra sensitive to judgement and whose access to opportunity is defined by view counts and engagement. Being financially dependent on that much social media exposure without awareness of the dangers involved will inevitably lead to the digital equivalent of black lung.

Continue reading The Social Dilemma Extended

Low-Paying Gigs: Think About Where the Money Goes

I’ll preface this by saying that the majority of club owners I deal with are good people. They love and believe in live music and have handed over their lives to the punishing task of owning and operating a small business. There are definitely snakes out there, but generally they’re hard-working people who took huge risks operating in an industry with a shrinking audience and growing costs. That said, when a venue doesn’t generate enough revenue to pay everyone adequately, musicians are often the ones who bear the brunt of that shortfall.

Most venues that offer door deals or low guarantees have no built-in crowd, meaning the only reason people walk through the door is to see a band. But when the end of the night comes and there isn’t enough money to compensate everyone, musicians are generally last in line to get paid. The staff gets paid, the food/alcohol vendors get paid, the utilities get paid, the taxes get paid, the bank gets paid, and the owner of the building gets paid. This is a common refrain and isn’t surprising to anyone, and I’m not arguing that these people don’t deserve their earnings. But the thing that musicians often miss is that, when you commit your time to one of these businesses without a reasonable guarantee, the fruits of your creative output are being used to pay other people first, including the generally wealthy people who own the building and loaned the business money. But for the music you create and perform, the money to pay all that overhead wouldn’t flow into the business in the first place (The same could be said about Spotify and other streaming/radio platforms by the way). Given that banks and commercial real estate owners are indirectly earning money from your work, you should think hard about whether or not you’re getting something meaningful out of the arrangement.  Continue reading Low-Paying Gigs: Think About Where the Money Goes