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New Income Streams for the Digital D-I-Y Musician

The digital revolution has brought about the age of the DIY musician, or as Sonicbids.com founder Panos Panay calls it, the “artistic middle class.” With technology, artists are able to produce and distribute their work easily while maintaining creative control. But big record labels, despite their floundering, still appear to be the way for an artist to go from anonymity to platinum-selling success. So how is this middle-class musician Panay speaks of making money and supporting his or her craft?

Traditionally, artists have had several income streams. These include income from record sales, live performances, performance/mechanical royalties, songs used in television or film, merchandising, and endorsement deals, just to name a few. But it can be difficult for an independent musician to access some of these streams without the help of a well-established label.

New business models are springing up all over the Web to help independent musicians get revenue from their music. The Future of Music Coalition recently highlighted some of these in its “Music 2.0” series at the 2009 FMC Policy Summit:

* Internet radio. Internet radio, which is seeing an increase in listenership, plays more artists in more niche genres than traditional radio would ever be able to. Last.fm and Pandora both stream independent music and pay royalties to performers and songwriters.

* Fan sponsorship and patronage. New online services such as ArtistShare and Kickstarter help artists raise money to fund projects and underwrite some of their expenses. Fans can donate money to their favorite artist through these sites and get access to part of the recording process, such as a songwriting session. Depending on the amount donated, incentives for fans can include everything from a free download to getting executive producer credit on a CD.

* Corporate sponsorship. Recently Gap, Coke, Burger King, Converse, Jeep and Jansport have all posted listings on Sonicbids looking for independent bands and artists to sponsor. The site’s founder, Panos Panay, thinks this is because brands realize today’s young consumers are more skeptical when it comes to traditional advertising and seem to connect most with the authenticity associated with independent artists.

It’s an exciting time to be a musician. There are new income opportunities on the Web, though the examples above will most likely be supplemental income streams for most musicians and not a significant source of revenue. For the artistic middle class — like any middle class — vertical mobility can be difficult. Hopefully this won’t always be the case.

Kelly Manix is a graduate student at the University of Washington in the Master of Communication in Digital Media program. She is an independent musician and music marketer. Her EP, Emerald City, was released this fall.

Comment by Kyla Fairchild on November 4, 2009 at 10:03am: Thanks for your post Kelly. I'd be very curious to hear more about what you are learning in the UW masters digital media program so I hope you will continue to use the ND site as a vehicle to put some new ideas and concepts out there for us to hopefully expand upon and debate. I've spent the last year and a half immersing myself in learning about technology and exploring new business model ideas for both artists and print publishers so would welcome the opportunity to have some discourse on such topics here.

I highly recommend that anyone interested in thinking about how artists can generate revenue read this article, 1,000 True Fans by Kevin Kelly. It's one of the best I've read on the subject to date and the comments that follow are also very informative and interesting.

Well Rounded Radio just released a podcast interview with Jill Sobule and Erin McKeown about how they are leveraging their fans to help fund their careers. It's a bit long but there are some interesting ideas presented. You can listen here.

Comment by Easy Ed on November 4, 2009 at 11:43am: There's a few artists out there who have been kicking around the 1,000 true fan theory or at least a variation. ( I believe for a couple thousand dollars Jeff Black will give you his car so he can have enough to go into the studio again.) If you could collect a hundred dollars a year from each of those 1000 fans, that would give you a base income of $100,000. In exchange you'd have to offer something up...maybe access to free music downloads, at least one pair of tickets to a show, direct access to chat or make contact with the artist, and throw in a t-shirt or something.

As it says in the article, it works best with a solo artist. And whether it's $100,000 or even half that, it sure is a nice starting off point in addition to other revenue streams such as shows and whatever sales you can stir up.

I really don't see significant money coming to artists or songwriters via things like internet radio, streaming models or corporate sponsorship. Vanity Fair this month or last published an article about Rupert Murdoch and his vision to make folks pay for internet content instead of getting it for free as we do now. The gist of it is that it's pretty hard to stuff the genie back into the bottle once it gets out.

Comment by Lost Hills on November 4, 2009 at 12:31pm: Most all of the models mentioned in the article make money for the perpetrator, but not for the artist. In particular, I would caution people to stay away from SonicBids: it's nothing but a rip-off and a scam. DIY means Do It Yourself, and it's a powerful ethic if you stick to it. Don't get involved with any entity that wants to charge you any money to promote your music.

Comment by Kelly Manix on November 4, 2009 at 1:30pm: I will take a look at the 1,000 fan theory. I in fact said that these would not be significant streams...but supplemental. These are just some new ways of seeing some sort of compensation for your work.

And last, I believe you will be hard pressed to find anyone who doesn't want to get paid for the vehicle they provide to promote your music. I don't know how you can legitimately get your music beyond your bedroom without spending some amount of money. These services, just like the musicians they help promote, want to be compensated for their efforts.

Comment by Kyla Fairchild on November 4, 2009 at 2:16pm: Kelly is right. This site for example! I want desperately to help artists promote their music to fans who will support them, but it costs money to operate the site.

Lost Hills, not sure if you're referring to the 1000 True Fans article I posted a link to or not, but the whole point of that article is artists connecting directly with their fans in new and creative ways to generate revenue. In that model there doesn't necessarily have to be a "perpetrator" if the artist is willing to dig in and make that part of what they do to sustain themselves. If they aren't then it could be a manager or marketing person that facilitates the interaction in which case they would most likely want some compensation.

Comment by Lost Hills on November 4, 2009 at 6:12pm: Oh no, I wasn't referring to 1,000 true fans-- that's an interesting concept that has a renaissance vibe to it. It really is a brave new world for people who want to get their music out there. ND is a great site, for sure, and has a lot of depth to it. I used to read almost every word of the magazine, and I think this site is a worthy successor. Folk Alley is another great site. I was criticizing sites like Sonic Bids that really just exist to separate you from your money.

I think it's really great for artists to be able to record themselves at home, post their music on the web for others to hear, meet people and interact with them online, book gigs and tours yourself online. Online radio is cool, too, and so is CD Baby, etc. I think that the amount of money that you can make promoting yourself online, though, is next to nothing. You've still got to do it the old fashioned way. Nail down those gigs in your local area, play as many shows as you can, meet real people, and use the internet wisely. Never "pay to play" under any circumstances.

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