For most music fans all over the world, the music industry might be just the artists and their hit songs. In truth, there is more behind the music industry than meets the eye. There is no denying that artistic aspect of music, where the artist can express himself in lyrics and song. However, the serious musician who intends to carve a niche for himself in the music industry and make a career out of it has to deal with the business side of making music.
Technology has drastically altered the music business because of the proliferation of websites that allow users to stream or download music directly to their personal computers or mobile devices like the iPod and smartphone. Hence, an increasing number of consumers prefer to purchase music online. In the United States, the sales figures of digital music have exceeded that of compact discs and vinyl records.
Advancement in technology does not necessary translate to more income for artists though. For some, it may mean less profit. Today, a user can watch free music videos on YouTube. There are also internet radio stations that allow users to customize and listen to their preferred music genre of artists. Music streaming can also be done for free on some sites. In the past, artists earned a few dollars for every disc sold as royalty. With digital music, royalties only amount to cents for every download.
Compact discs offer an avenue for artists to earn more. An independent artist who is not signed with any record label can keep all sales profits. However, being with a label has the advantage in terms of song promotion and audience reach. The artist’s share for each sale is determined by the terms in a contract agreed upon by a musician and the record label. The more popular the artist is, the bigger his share of the profits.
Currently, the most profitable option for musicians is touring. Revenues from concert tours can earn a band or a musician hundreds of thousands of dollars per night, depending on ticket sales as well as the sales of merchandise. To illustrate, if country pop sensation Florida Georgia Line sells ten thousand tickets at $30 each, revenues would amount to $300,000. Granting that they get 25% of ticket sales, then the band’s earnings is $75,000. Estimating merchandise profits to be $3 per concertgoer, this would be an additional $30,000. In total, the profits generated are more than $100,000, just for a single night in a Florida Georgia Line tour.
The digital age has made consumption of music more convenient and less expensive for people. Musicians and artists, however, need to adapt to these changes in order to stay relevant and to continue providing their fans with the kind of music that they want.