10 Steps to Making Money in the Music Business
It takes more than a good song, talent, or recording to make money in the music business. After all it is the music business. It may sound crazy, but the music is often the easier part of the business. This is not always the case, quality music is by no means easy to write, perform, or record. Yet artists often better understand how to make quality music versus how to monetize it.
You can’t fake good music!
There’s a truth to music and melody, and we all know a banger when we hear it! But the business can be a murky area and the steps to generate money are often misunderstood or unclear. That’s why I have created this step-by-step guide on how to make money in music while protecting your work. Use this checklist to organize, protect, manage and maximize profit for your music.
1) Copyright your work
While you technically own a copyright the moment you write or record anything that is a ‘piece of creative work in a tangible medium” you may have a hard time proving it. A copyright registration from the copyright office is all the proof you will ever need, and an official registered copyright is an easier piece of Intellectual Property to sell!
For questions about copyrights in the United States, visit the official copyright .gov site.
2) Catalogue your work
Having your music organized or cataloged properly is a key step. First, get ISRC codes for each track to be published.
What is an ISRC code?
An ISRC code (international standard recording code) is a 12 digit unique identifier, much like a barcode, that allows your music to be tracked back to you because it can be permanently encoded into a recording or music video. This allows you to get paid! Find out more about obtaining an ISRC code.
Having these ‘finalized recordings’ properly organized is a key to giving partners like Performance Rights Organizations (PROs) and Rights Administration Companies the right tools to best help you.
3) Partner with Royalty Collectors
PRO’s and Rights Administration companies will often help you attach ISRC codes to each of your tracks. But here’s the catch, you need to confirm what they’ll do and what help they provide before you enter into any deal.
There are two main types of royalty collectors:
- Rights (or Publishing) Administration Companies
What they are and comparing their offerings is a broad topic, but know that you almost certainly need some combination of them to collect all the possible royalties from all territories. Their job is to collect royalties for you, empower them to do just that.
Here is a great infographic showing an example of how songwriters, artists and publishers are compensated for music licensed on on-demand streaming platforms:
Visit futureofmusic.org for more information on royalties in various channels of distribution.
Bottom line… You can see from this example of just one distribution channel that having help is vital to tracking your music and collecting royalties on that music. So investigate which groups are the best fit for you and look for reviews from users of each organization and company to help you decide the best ones for you.
4) Cover all your Royalty Income Streams
This section could easily be a continuation of point three, but then this article would look wonky. The point here is that not all performance rights organizations and royalty companies cover all possible income streams. And not all PROs and rights administration companies are created equal. You need to find a combination that covers as much of your total possible streams of income as possible.
One key to this is to register with the Fourth major PRO which is SoundExchange. This is in addition to one of the traditional big three PROs. SoundExchange covers streaming royalties, and while most rights administration deals will help you register with SoundExchange you must make sure you are registered with them and take it upon yourself to make sure you are registered and your work is properly listed and attributed.
For extra reading, here’s a solid article about things to ask and evaluate when considering a publishing or rights administration group to partner with.
Just remember, no one will care as much about your music as you do, period.
5) Create your own Youtube Channel and Monetize It
This is two parts… First make a channel and start to make compelling videos with your music featured. They don’t have to be expensively produced, some of the most successful videos use a blend of transformative clips or are real life filmed on an Iphone! Think about compelling videos. Think about telling engaging stories. Think about capturing raw real life and telling the story behind your music!
Second, monetize your channel!! This is a big, very important step!! Youtube likes to promote channels that it can sell ads on. In selling ads on your channel Youtube shares that ad revenue with you. So don’t think of the ads as diminishing your channel think of them as boosting your viewership by putting you ahead of channels that are merely for novelty or nonprofit purposes. Study how ads are utilized in channels and decide on the ways you will allow advertisers to appear on your channel.
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Youtube and other video sharing platforms are a great way to keep your fans engaged, and they are the number one place for new people to discover you and find about you and your music in a crowded entertainment world.
6) Make Money AROUND your Music
Finally! Lets talk about the making of money! The real dinero. You probably won’t make enough money starting out on just your Youtube ad revenue that’s for sure! And when starting out, Youtube should be viewed more in terms of getting discovered and gaining fans. But guess what? Live Show are not dead! Merchandise is not dead! Awesome Concerts make Big Bucks!! This means, find every opportunity to perform, and be ready when you do! Ready to not only rock the stage but ready to sell merchandise and connect with fans!
Any new artist will sell more physical albums at their own shows than online! That’s how you get started.. grassroots, organically.
Take pride in your branding and logo. Make Awesome Merchandise. People may like the look of your gear/designs/logo more than your music. That’s ok because guess what? You made money selling the shirt and they promote your brand. I know many bands and artists who’s merchandise is a huge part of their bottom line.
7) Book and Promote your own Shows
Yes, like point number six, live shows are important. If you can’t get paid performances, make your own concerts! Find other artists and bands to perform with you or headline for you. Take charge of finding the venue, locating the needed help and promoting the event. A large part of this is to target areas that do not have enough good live entertainment, sometimes referred to as B and C markets.
You may be surprised that you can find sponsors and partners for your events. Create the theme, the lineup and make it happen. You may only need an opener and a DJ. Don’t over-invest and try to throw the biggest show on the planet your first attempt. Look for people with experience to help you. Give yourself enough time to prepare and market the event. Better yet, plan it around a holiday or special weekend and then get your show listed on every events listing and newspaper you can.
Don’t forget you can film your shows and chop them into videos for your YouTube channel!
8) Listen to Fans!
There is no better way to test your music and improve your entertainment offering than to listen to fans. They will decide what songs they like. If you test your new music on listeners and friends, take note of what they like and don’t like. You don’t have to sell out making music for them and not for you, but listen to what resonates with them.
Fans will tell you when you have a hit record!
9) Promote in the Right Channels
This is a crucial element. Social Media is great and it is where music may catch on or be discovered, but there is more than social sharing to get your music to create income. Your YouTube channel is important in this regard. Promote those channels that return the most money. Especially your YouTube channel, where you can make money on the music royalty and advertising.
As a bonus, you can link directly to your merchandise. That is three ways to make money on this one channel. Not to mention videos and music featured in video, tv, and film pay slightly higher royalties in general. Think about any music that accompanies video as more lucrative than music that stands alone. So work hard to get your music up on Spotify, Pandora, and YouTube.
Additionally, getting your music more easily discoverable by getting on playlists and using hashtags is crucial to effective channel marketing.
10) Study your Marketing Results!
If you do all the above, you will see statistics that measure your success, even if small at first. Study your results. Measure things like:
- What videos or songs got the most views, the most shares?
- What gets you more subscribers faster?
- Who bought your merch and how did they find it?
- What items are the most popular?
- Are there hashtags that seem to work better than others?
Studying what works and what doesn’t allows you to focus your efforts on what is most productive.
In Conclusion: Making Money in Music is Achievable!
In fact, as the music and entertainment industry change, it creates opportunities! These opportunities allow nimble agile Artists with responsive creative strategies to capitalize on them!
Making great music takes many elements coming together: writing, instruments, vocals, recording, engineering to name a few. The same goes for making money through a great music career… Similar to the fundamentals of making good music, there are fundamentals to making a good career financially in the music business. Some of these fundamental elements an Artist may need include marketing support, a manager or label, and other key members to their business team.
While this guide is designed to help any artist get started, ultimately one of those key team members needed is an entertainment attorney. An entertainment attorney helps to make sure you are protected, your work is protected, you don’t enter into the wrong deals that hurt your career, and works to represent and protect in order to get the best value and most money from the deals you do enter into.
This article was originally written by Managing Partner, Entertainment Attorney Zebulon Chandler, of Chandler & Chandler Law Group based in Atlanta. For more practical entertainment law tips follow him on Instagram at @atlentlaw
For other questions or inquiries contact Attorney Chandler at firstname.lastname@example.org
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