4 Takeaways From “Rockonomics” For Working Musicians
I recently finished reading Alan B. Krueger’s book Rockonomics. Krueger is a Princeton economist and was the economic aid to presidents Clinton and Obama. In his book, he takes a scientific look into the modern music industry. It’s full of charts and statistics, but Krueger also throws in interviews and specific examples to illustrate his points as well. In this post I’ll review Rockonomics and talk about some key takeaways for working musicians.
If you look at many musicians’ social media profiles you will be inundated with posts about their musical success along with photos of them playing to large crowds. But making any conclusions about the monetary success of musicians based on these snapshots is a difficult thing. Krueger’s book offers a much needed reality check to dreams of fame and (possibly) riches that fill the heads of many fledgling musicians.
Here are some key statistics that I thought were very interesting:
1) Paul Mccartney makes most of his money from touring
Paul Mccartney has written more #1 singles than anyone else in history, but today only makes 7% ($4.4 million) of his income from his recordings and publishing. He makes 93% ($64.9 million) of his income from touring.
There are lots of factors that affect this. While some point to streaming as the culprit, streaming has in some ways helped bring the industry back from when pirating services like Limewire and Napster ran rampant.
With streaming, recorded music is no longer primarily thought of as a product, but is also viewed and consumed as a marketing material that will hopefully draw crowds to live performances, or pave the way for other economic opportunities. Krueger points out that royalties are paid based on the percentage of streams an artist gets out of the total streams on a platform.
What this means for working musicians:
While the revenue from recorded music for musicians isn’t what it should be, it is growing. In my experience it’s important to look for creative opportunities to increase revenue from your recorded music. Here are a few ideas:
- Delay release of your music on streaming platforms to encourage the purchase of physical copies of your music like vinyls (demand for vinyl has persisted)
- Bundle products with your recorded music. Acts from Taylor Swift to Tool have used this tactic to encourage buying habits and increase revenue.
- Release remixes and alternate versions of your songs. This gives your songs the greatest opportunity possible to gain revenue.
- Collaborate with other artists. Whether it’s getting a producer to remix your songs, or featuring another artist on your song, this gives you access to their fan base.
2) The music industry is a “Superstar Market”
60% of the money in the music industry is made by 1% of those involved.
Krueger points out that this pay gap has been widening since the birth of the modern rock and roll economy in the 50’s and is wider than it’s ever been. In the 60’s, the top artist didn’t make that much more than the 100th most popular artist, but today that isn’t the case.
He points out that the music industry is now a “Superstar market.” This is a market that is highly scalable and where higher level products and sellers aren’t interchangeable with lower level products and sellers.
For example, when a higher level artist like Taylor Swift releases an album its reach can be seen in that its immediately available to be streamed or bought worldwide, is pushed to radio, and she announces a worldwide tour. Also, a Taylor Swift song or show is not interchangeable with any other artist’s song or show – a Taylor Swift fan might not be interested in Bruce Springsteen.
Once someone like Taylor Swift has achieved scale, it is very hard for a lower level artist to compete. For example, people are less likely to go to support their local music scene when they can stream Taylor’s latest album in their car, and see her live when she comes to town next month.
This hasn’t always been the case. Before the record player, if you wanted to buy a song, you bought the sheet music and found the best musician you knew to perform it for you. With the invention of recorded music, the best musicians in the world now had a way to widen their audience and scale up their business. With each new technological advancement, the music industry has become more and more scalable, and the gap between livingroom pianists and commercial artists has grown ever larger.
What this means for working musicians
Find ways to scale your music and build an audience. Here are some ways that can work:
- Perform live for the internet from your living room, and people can watch from theirs. Find a way to sell tickets to a live stream performance and you can attract fans from all over the world. Stageit is a great tool for this.
- Utilize social media to expand your audience. While you may not have the fire power of Beyoncé, social media is a great way to increase scale.
- Through sites like AirGigs you can offer your services as a musician, producer, engineer, music teacher, or album designer to anyone in the world. Sign up and create unlimited free listings.
- Take advantage of funding tools like Patreon, Kickstarter, and others to help secure funding for projects, grow your following and earn an income.
3) the average musician isn’t doing very well financially
The median income for musicians in 2016 was $20,000. That’s $15,000 below the national average. Most musicians make their income from performing live (often in restaurants and churches) and from teaching.
The images of musicians playing to thousands and trashing expensive hotel rooms is not the reality the vast majority of the time. People make music because they have an undeniable urge, not because they are likely to make millions. Even if people are making great money from their musical career, that success can be short lived.
What this means for working musicians
If you want to be a professional musician, or are trying to figure out how to have a sustainable career, you’ve probably wanted to since you were a kid. And you may be the victim of certain unrealistic expectations and assumptions. While it’s great to dream, it’s incredibly important to set realistic financial goals and make plans to achieve them.
Even if stardom is the goal, you need to create smaller, more achievable goals to work on, for example:
- Release your own project
- Producer another artists’ music
- Perform live with another artist
- Play 50 shows in a year
- Have a song pass 10k stream
- Make $10,000 a year doing music.
- Quit your day job
Every musician is at a different skill level, in a different town, with different connections, and therefore will have different numbers and goals that make them feel successful. Sit down and write out your goals for the year and how you are going to try and achieve them. Especially when you’re starting out, try not to compare yourself to other musicians, especially superstars.
4) Making a Career in music can be depressing
According to Krueger, musicians are more likely than the rest of the population to struggle with substance abuse and to consider harming themselves. Perhaps this comes from how hard it is to make money in music, from musicians being stereotypically emotionally turbulent people, from the tendency for musicians to compare themselves to others, or a combination.
What this means for working musicians
Your emotional health is more important than how much money you are making in music. If you aren’t making what you want to be making, that is ok. If you need to supplement your income with other kinds of work that is ok as well.
Even some of the best musicians fall on hard times, or have to supplement their income with other kinds of work for a season, but don’t let that force you into depression, or self medication. Reach out to people around you. If someone has been a musician for very long, the chances are that they’ve been through hard times as well.
The book touches on Industry structure, financial management, income inequality, depression, and IP rights. While some of its findings are less than rosey for a working musician, I found that it was an encouraging shot of realism that is helping me set realistic goals, and realize that all working musicians are facing similar struggles.
Making a living in music is difficult, especially when we consume a steady stream of media from 1% superstar musicians and constantly compare our success to theirs. If you are considering trying to make music your full-time gig, or you are in the midst of trying to make it work, don’t give up, and also don’t measure your ability or value based on your financial success. If you find yourself in a position where you need to find other kinds of work to pay the bills, that doesn’t make you a failure. Music is beautiful outside its ability to provide financial reward, and no matter how hard you work at music, don’t forget how to play it.