Ah, the age-old dream of making a living solely from music; a fanciful aspiration whispered in hushed tones by budding musicians strumming their guitars on dimly lit porches, dreaming of golden records. 

While it's all very poetic, the cold, hard truth is that this ambition is reserved for a privileged few. And by 'few', we mean those one or two friends you might know who've magically landed a record deal after humming a tune in the shower. 

But fret not, dear dreamer. The amount of money one rakes in (or doesn’t) is simply a reflection of their stage of musical career development. 

Now, brace yourself for a crash course: We've got the 'Music Hacker', the tech-savvy newbie playing with beats and hoping it's music. Then comes the 'DIY Artist', who's basically figured out the music portion and is trying to figure out the music business side of things. Up next is the 'Professional Artist'—imagine them as the well-tailored folks who've figured out how to make their passion their paycheck. And finally, the 'Star'. You know, that one guy from high school who somehow ended up with a summer hit. 

In the handy-dandy table below, we'll unveil the secret strategies for each of these stages, so you know exactly how to navigate your musical journey, even if you're just belting tunes in the shower.

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Your best weapons in taking on the music landscape are an eager (and sturdy) heart, and an informed mind. So that you embark on this journey with a clear view and understanding of the odds that lay ahead, here is more information on independent artist earnings.

Lay of the Land

Today’s music landscape has given independent artists more platforms and opportunities than ever before, but with the influx of new music, how does this translate to dollars?

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In 2022, artists classified as “Independent” or “Self-Releasing” constituted 5.7% of the total recorded music revenue (which amounted to $26.2 Billion in 2022.) This translates to approximately $1.5 billion earned by independent artists. It's essential, however, to consider the distribution of these earnings. With 11 million artists on streaming services—and the vast majority being independent—this revenue, when divided equally, leaves each artist with an average of merely $136 annually from streaming. It's a sobering figure that underscores the challenge independent artists face in a saturated market.

Synch‍

Turning our attention to Synch, it represents 2.5% of the total recorded music revenue. Using the 2022 total recorded music revenue of $26.2 Billion, this means Synch generated roughly $655 million in total yearly revenue. However, this segment is primarily dominated by established acts. For estimation purposes, let’s assume the same 11 million artists on streaming services –, this revenue, when divided equally, would leave each artist with an average of approximately $59.55 annually from Synch. For the majority of independent artists, revenue from Synch might be negligible. It's an avenue of income, but for most, it's not the most significant contributor.

Physical Sales

‍Physical sales, which many consider a relic of the past, still hold a significant slice of the revenue pie, making up 17.5% of the total music revenue. Crunching the numbers, this translates to independent artists earning an average of approximately $23.76 per artist annually. While the digital age is at the forefront of music consumption, there's a palpable demand for tangible music products. For many indie artists, selling physical copies at gigs or online can provide a more direct and profitable connection with fans.

Performance Rights

Performance rights, representing the royalties artists receive when their music is played on radio, television, or public venues, contributed to 9.4% of the total revenue in 2022. For independent artists, this equates to an average earning of about $12.76 per artist annually. While the individual payouts per play might be small, they can accumulate, especially if a track gains traction in popular media or is frequently played in public venues. Partnering with a performance rights organization can ensure artists are compensated whenever and wherever their music is played.

Downloads and Other Digital

Even in an age dominated by streaming, downloads and other digital sales have their niche, contributing 3.6% to the total revenue in 2022. This amounts to an average of roughly $4.89 per independent artist annually. While this figure is less than during the peak of platforms like iTunes, it's still noteworthy. Offering digital downloads can be beneficial, especially for fans who prefer to own their music outright. Other digital avenues, such as exclusive releases or digital fan packages, can also present additional revenue opportunities.

Combining all these figures with the initial streaming revenue, we find that an independent artist, on average, might expect to earn approximately $233 annually from these primary revenue streams. It underscores the importance of diversifying income sources. While these averages provide a snapshot, it's important to understand that individual earnings can differ significantly based on various factors, from an artist's popularity, and are just a way to wrap your head around the large amount of artists, and small amount of revenue that exists.

So; where do independent artists actually make money? Putting all the above math aside, it’s crazy to believe that artists are making $233 annually - the reality is many make much more or much less than that. However, one thing is certain: Streaming & Digital is not the main revenue driver. Live Touring is.

In 2022, the global live music industry was impressively valued at approximately $28 billion. Independent artists, known for their relentless commitment to the touring circuit, undeniably capture a significant portion of this value. Assuming that same 6% of independent artists generated a proportionate share of live touring revenue, it suggests that they brought in an approximate sum of $1.596 billion from the live touring scene in 2022. If we use Spotify’s estimate that there are roughly 200,000 “professional” independent musicians,  this averages to about $7,980 per artist annually. While this number provides a general perspective, individual earnings can swing dramatically based on numerous factors including artist popularity, number of shows, ticket prices, venue sizes, and merchandise sales. Nonetheless, this calculation underscores the significance of live touring as a vital revenue stream for independent artists, who, despite not earning much from streaming on average, end up making the bulk of their income from live touring. 

So given all the above, it can be estimated that the average independent (touring) artist in 2023, makes $8,213 annually off of their music. 

Then again, this depends on which stage of your career you are in. Take comfort in knowing that you are not alone in your stage of development, and that you have the support and the tools to execute your growth strategy with Songtools.