(Hypebot) — Making a living as a musician has always been challenging, and is now more so than ever. For this reason, artists are recognizing the need to diversify their income, and establish as many sources of revenue as possible.
Guest post by Gideon Waxman of Soundfly’s Flypaper
Life can take unexpected turns. The current situation the world finds itself in is more than enough motivation for musicians to learn to rely on more than one single revenue stream. The live music industry has been rattled and brought to its knees.
There are also countless other circumstances that could prevent touring for musicians, such as: family obligations, injuries, travel restrictions (often VISA issues) and other types of complications can blocks live shows from taking place. So what then can be done to ensure you aren’t left in a bad spot financially as a result of any of these circumstances?
In a word: diversification.
This is the process by which international businesses vary their field of operation, because diversification is the single best way to manage risk, through distributing revenue streams to multiple funnels. What if we as artists could also achieve additional revenue streams that require little to no effort to maintain?
This is known as passive income, and it’s a source of income that continues to pay even after the completion of work. Let’s learn more about that.
What Do You Need to Achieve Passive Income in Music?
Achieving passive income requires ingenuity, forward thinking, and hard work. Of course everyone wants to earn money without much effort, but there is a lot more to it than that. Consistent revenue in the music industry is hard to come by already. Passive income works through leveraging your talent and influence, and scaling so that your community grows but not your overall workload.
Passive income follows after the completion of high quality work, and the automated processes that take place after generate the revenue. For example, one of the better-known ways to generate passive income is generated through royalties. The more popular an album is, the bigger the pay checks will be. And these checks will continue to come long after the music was recorded.
The good news is that you don’t need to be a superstar to generate passive income, however you do need to have a fanbase and a certain degree of monetizable reach.
Sounds Good, How Do I Do It?
No passive income will ever come into your life without hard work. Fanbases don’t grow on trees, you have to earn your fans, viewers, readers, listeners, and audience members over time and consistently serve up high quality music.
With that said, here are four methods for generating passive income that you can take advantage of right away.
Affiliate marketing is no new business model. It’s essentially a form of advertising, but performance-based. A business will reward an affiliate partner for sending visitors to their product with a small commission. It doesn’t cost the customer any more, in fact you can even incentivize customers to purchase with unique discount codes.
Taking advantage of affiliate programs works seamlessly for YouTube, Instagram, Twitch, music blogs and other types of digital platforms if you have a loyal following that’s interested to learn more about the products and musical equipment you use.
I stumbled across a free service called KIT, which is designed for creators to share shoppable collections of the equipment they use. All you need to do is curate your products and share links with your community, and then you keep all the affiliate revenue you make. I’m seeing KIT links in lots of video descriptions from popular YouTubers these days and I think it’s a great way for artists to fund their practice with passive income.
Patreon is a subscription-based service that is proving to be a hit amongst musicians and creators, with the platform growing significantly. Anyone is able to launch their own community hubs offering exclusive content, tips, lessons, and unreleased music in return for a monthly fee.
There is definitely a real incentive for music fans to join and become a part of Patreon communities, because it allows fans to be one step closer to their favourite artists and musicians.
Patreon is disruptive to the conventional model of the music industry because it provides musicians with predictable and sustainable income without the need for record labels. If you love creating content and you appreciate your fans, then taking advantage of a membership based model such as Patreon is one of the best ways to generate passive income in music, even if you only have a small following.
Your Own Web Store
We’ve established that building passive income relies on previous hard work. This particularly applies to building an online merch table. Creating and marketing a quality product for consumers is a difficult but rewarding endeavour. The most popular web stores musicians run offer lesson and tutorial packs as well as bespoke instrumental samples.
If you are a professional musician and offer educational services, building lesson packs is a great way to generate passive income. Or if you are a producer, offering your own sound libraries. These are value-for-value exchanges, so they really need to be high quality.
We are all sick of hearing about the decline of the record industry and how the value of recorded music has decreased over the years. Although nowadays the value of a single song play is less, royalties still contribute to an artist’s revenue in a meaningful way. The amount of money made from streams will depend on your popularity of course, but also on the volume of music you have available.
This is why so many artists within the last five or so years have released much longer albums, as opposed to the conventional ten tracks. Justin Bieber, DJ Khalid, and Drake each feature just shy of twenty songs on their recent albums.
Unfortunately music fans don’t buy music like they used to. Everyone opts for streaming to sample new music nowadays, and that’s just the way things are. Get creative, write, and record more music because if people enjoy it, you could receive passive income for a long time afterwards. And make sure you set yourself up to receive the royalties that are properly owed to you.
Finding consistent revenue in music is something that is thought to be elusive and out-of-reach. It’s certainly difficult, but there are great ways to diversify your revenue streams whilst enjoying being creative as a musician.
Passive income won’t make you wealthy overnight, but steady and profitable passive income options like the ones within this article will be able to support your lifestyle and allow you to pursue your passion full time.
Gideon Waxman is a London based drummer with over 13 years experience. Since completing a Music Degree at the University of Westminster, Gideon has been touring with metal act Familiar Spirit. You can find more of his advice over at Drum Helper, a free online resource dedicated to helping drummers achieve more from their playing.