Music & Money: Where the Money Goes

The road to fame is a costly one.  While there are many ways that famous artists can make money such as streaming services, merchandise, and released albums, touring is where the big bucks are.  Rolling Stone Magazine recently published that artist industry-wide makes only 10-12% of the total sales of their music. This amount was found by comparing the total music revenue against the artist take.  The other 88% goes to a plethora of tasks such as the costs incurred by the record labels, streaming companies’ fees, satellite radio and all the different parts that are between the musicians and the end-listener.  This 12% figure, low as it is, is still a considerable increase from the 2000 level of only 7%. If an artist wants to make crazy money, they sell out a stadium. But with great reward, there is a high cost. Prominent name artists have teams of people all pulling off the same fan dollar.  As enjoyable as music can be, it is still a business, and the band pays for the lights to stay on. While a lot of this information is private, there are industry-standard percentages that can give some ballpark figures of where the money goes.

Starting at the club level, bands are not in a place to call the shots and ask for anything other than time to play.  At this level, it is the band’s ability to bring a crowd that gets them paid. Managers, publicists, and touring cost are not part of the picture yet.  This is the struggle faze. The band is worth the number of bodies they can bring in — tit for tat. Getting to the next level is where musicians can start to see a future in music.  Medium size clubs can be great for musicians that have a good amount of popularity but do not have the full-blown professional enterprise going. Selling out a local 3000 seat theater owned by a local promoter is going to put a good amount of money in a musician’s pocket without the stress of having to pay a team of employees that help run a big tour.     

If the artists are lucky enough to make it big, touring is where the percentage overwhelmingly is in their favor.  The bands that can sell out Madison Square Garden can take a piece of every one of those 20,000 tickets sold for each of the nights that they play.  That adds up to a massive amount of money. The top three super-stars presently are U2, One Direction, and Beyoncé with Adele and Taylor Swift not far behind.  These artists are bringing in millions from there stadium tours. While a lot of the details of these concerts are private, a typical figure in touring is that the promoter of the event will take 10-15% of the profits.  Even with all these expenses, a big-name band can take upward of 70% of the ticket price of a venue. The band share of the profits still needs to be split among the members. The manager takes at least 10% of the band take.  Some artists still have agents (10%) and publicist (fee-based) to pay after the manager. A few artists with iconic popularity have signed residence contracts to play in places like Las Vegas. Artists like Maria Carey are paid $500,000 per show regardless of who shows up.  That is when you have really made it.     

Michael Brigger

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