When I was in college, I held several part time jobs to make ends meet. One of those part time jobs was playing guitar at a few restaurants every month. Nothing glamorous, but I was happy to be playing guitar. I started keeping track of how much money I made on those gigs to see if I could justify quitting one of the other part time jobs.
It turns out keeping a detailed list of my music income has served me well over the last 10 years. I was eventually able to justify quitting all of my day jobs and become a full time musician, and since being a full time musician, I’m able to keep a finger on the pulse of my various streams of musician income. Just as a shop owner keeps track of her inventory and carries whatever products are in demand, I’ve been able to assess and adjust my inventory of music jobs that keep me in business.
Over the last 10 years the way I make a living has changed dramatically. I’ve never made a lot of money, but I’ve been able to make more each year despite the changes in the music industry and economy in general. Here’s my method and what I’ve learned along the way.
Multiple Streams of Income
One thing I learned early on was to diversify my income. If one stream hits a drought, you can lean on the others to get by. Here’s how I categorize my income:
- Non-Union Gigs
- Union Gigs
- Recorded Music Sales/Streams
Anything that pays me to be playing guitar falls under one of the gig categories. Performances, rehearsals, recording sessions, etc. Additionally, I separate my gigs between non-union and union, mainly because my accountant tells me to (taxes are withheld from my union paychecks), but it also gives me a good understanding of where I make more money. Currently, that’d be non-union gigs.
My recorded music income is essentially anything I make from my distributor: CD and download sales, streams, ringtones and whatever other formats exist today.
Royalty income is earned through BMI. There are other avenues to earn royalties, but for now, I’m only earning money through BMI. This income is also reported in a separate space on my tax return, so I keep strict records for my accountant.
The miscellaneous category covers a lot of ground, but none of it is significant or regular enough to warrant tracking under it’s own category. Some of this income includes:
- Teaching lessons/masterclasses/clinics
- Revenue from websites (MusicianWages and my own)
- Backend earnings that don’t qualify as royalties
Broad Categories for Musician Income
Dave Hahn and I have often discussed musician income in two broad categories: Active/Passive and Yours/Others. Naturally, I think of my earnings in this way as well.
Active Income / Passive Income
Active Income, also known as Earned Income, is a finite amount of money paid for specific time or services. Everything under the Gig categories and about half of the jobs under Miscellaneous count as Active Income. Every month I try to make sure there are enough jobs that create Active Income to at least cover my expenses.
Passive Income is the money I make from my recorded music, royalties, website revenue, and various other backend percentage agreements. I usually have an idea of about how much Passive Income I’ll earn each month, but experience tells me that you can’t count on the check arriving before rent is due. Nonetheless, this money is vital in rounding out my income, especially when there are holes in my calendar for Active Income jobs.
Your Music / Other People’s Music
This broad category is pretty easy to understand:
Your Music is basically anything you create as an artist or songwriter. If you have your own original band and play shows and sell CDs, then you’re making money from your own music.
Everything else is Other People’s Music. If you work as a sideman, play in a cover band, in a church, in musical theatre, teach, or any other type of musician job we’ve ever discussed on this site that you can’t call your own music, then you’re making money from other people’s music.
How My Streams of Income Have Changed
Creating Passive Income with my Original Music
In 2007 I was working a full time job at a major record label, a job I’d somewhat fallen into through temp work a couple years earlier. Meanwhile I was playing a few times a month with my own jazz trio, performing mostly original music from an album I’d independently released earlier in the year.
The day job helped me cover rent and bills, which freed up most of my music income to be reinvested. In other words, I could use my music income for things like paying my band, saving up to make a new album, or buying new gear–all things I felt would have long term benefits to my career as a musician. I was my own patron, supporting myself as my art developed.
At this time, most of my music income came from music sales, and most of that was through iTunes. You see, for a brief period of time I figured out a way to use iMixes in the iTunes Store to help people discover my music. I started making enough money that in early 2008 I quit my day job and took a pay cut to become a full time musician.
Because I was making most of my money as passive income with my own music, the logical thing to do was create more content–or write and record more music. In 2008 and 2009 I wrote and recorded a new album for my trio while also creating several DIY albums with friends under various monikers. I figured each recording was a new asset that could potentially earn more passive income down the road. And for a time it did.
By the end of 2009, however, it was clear that the decline in music sales that had been decimating record stores since 2001 was finally catching up to the small, independent artist and DIY scene that had gained some footing a few years earlier. Despite having three times as many albums (for a total of nine) available on iTunes and other online stores, my distributor was paying me a quarter of what I had been making on average the year before. It’s even less today, and unless I wanted to get a day job again, I needed to beef up my other streams of income.
Generating Active Income with Other People’s Music
Having worked for a record label, I knew that a decline in my record sales was inevitable. Once I quit my day job, I had a lot more time to start playing with other people. I began networking with other musicians and gradually started playing as a sideman.
Playing other people’s music is a much different gig than playing your own music.
When you write and perform your own music, it’s easy to cater to your strengths. When your job is to play other people’s music, you really can’t have any weaknesses.
To become a well rounded guitarist, I started transcribing players from all genres, especially genres in which I had less experience, like country. Gradually I felt confident copping the styles of many major guitarists. You never know when the person hiring you will ask for a David Gilmour lick in one song and a Vince Gill lick in another. You don’t have to play like every guitarist all the time, but you have to convincingly play like any guitarist some of the time.
I also had to think about earning active income, which meant playing a lot more gigs. One of my goals was to play 100 shows in a year, and doing whatever was necessary to make that happen.
In New York City, original bands play about once a month locally, more if they tour. Cover bands might play once or twice a week. Broadway and Off-Broadway shows run 8 times a week, and as a sub you can usually count on at least a few gigs a month. In order to reach 100 shows, it was clear I needed to play a lot of different gigs as a sideman.
This was a lot easier to do without a day job. Learning music can be a full time job in itself, and for every band you play with you can expect at least one rehearsal each month. Networking also takes time. I spent many late nights going to friends shows trying to meet other musicians.
Eventually I began playing with singer/songwriters, rock bands, pop singers, a bluegrass band, jazz vocalists, and occasionally playing private events and club dates. At first I didn’t ask for much money, but as I got busier it was easier to value my time. I found that if a gig wasn’t paying much, and especially if I wasn’t that into the music, it was best to walk away amicably because a better gig was always around the corner.
In 2012 I’m on pace to play about 125 shows. The active income I’ll earn from playing other people’s music this year will more than make up for passive income I’ve stopped earning with my own music.
Nurturing the Odd Jobs
Along with playing and recording, there are many types of musician jobs to supplement your income. These jobs help round out your days and can often get you through sales droughts and slow months for gigs.
The first job that comes to mind is teaching private lessons. Now, for many musicians, this is actually their main gig. I enjoy teaching motivated students, but for the most part I never have more than a couple weekly students at a time. Most of the time I’ll teach a few lessons to intermediate to advanced level students that want to work on something very specific. I’ve attracted many of my students by posting semi-regular free guitar lessons on my website. Currently I have one Skype student and one local student.
Other services I offer include recording demo tracks for songwriters, writing easy to read charts for bands, and arranging horn or string parts. These are all active income jobs.
Although recorded music sales are dwindling, there is still money to be made from recordings. Licensing your music is an incredibly viable way to keep some passive income flowing. I’ve delivered most of my music to various music libraries and fostered relationships with people in music supervision. The music I’ve recorded so far has been licensed more and more frequently, and I’m also earning quarterly royalty checks through BMI. The big money, however, is in exclusive custom jobs, and I’ve submitted several demos for commercials. I haven’t landed anything yet, but eventually I will.
I also earn some money through my websites. MusicianWages.com was created as a passion, but Dave and I have built it up to a point where we can make a little bit of money each month.
There are limitations to the work I’m doing now, and I’m constantly thinking of solutions.
There’s only one Friday and Saturday night a week, and as I get busier I get more calls to play those nights. Eventually some of those bands are going to have to replace me with somebody that’s more available. The only way to make more money is to land gigs that pay more. These gigs are higher pressure and have more competition, so I try to play all of my current gigs as perfectly as possible. You never know who’s listening. I sometimes tell people who ask me about my career that I’m no rockstar, but if a rockstar called and needed me for a tour, I could get the job done.
Another option is to find gigs earlier in the week. Most of these gigs pay less, with the notable exceptions of tours and Broadway gigs. This year I started subbing on a couple shows off Broadway, including the revival of Rent, and I believe I’m well equipped to play more of these highly competitive gigs.
I also see the importance of writing music. All kinds of music. Publishing is still a viable source of income for musicians, and if you have a writer credit on a few successful songs, you can make decent money. I try to write something every day–even if it’s just four bars of melody–and am always open to collaborate with other musicians.
And finally, I’d like to keep developing my own music and create art for the sake of art. After all, that’s the reason I started playing music in the first place!
If there’s one thing I’ve learned from the music industry, it’s that these days nothing stays the same for long. Multiple streams of income makes it easier to adapt. Owning the rights to my albums means I can exploit them however I see fit in the future. Playing a lot of gigs with a lot of different bands prepares me for bigger, higher paying gigs. If any of these miscellaneous jobs turn into a bigger gig, I’ll be prepared for that, too. I can’t control when opportunity will knock, but I know I’ll be ready.