While it’s exciting to write songs, be in the studio, and hear the first mix, learning how to monetize music isn’t nearly as thrilling. You don’t have to monetize your music to fuel your passion – but it will help you generate income.
In the same way that music styles change over time, so do the methods used to make money from it. In the past, artists sold CDs. Before that, they sold records and cassettes.
For a musician to be successful, he or she must earn money. All you need is some guidance.
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What is Music Monetization?
Essentially, music monetization is the process of making money from digital music. There are many different forms of monetization, and you may have heard the term used in relation to social media or video revenue.
Monetization can be tricky in the music industry. To earn money from a song, an artist needs to own the royalties. If the song is sold or monetized, royalties are paid to the song’s owner.
A movie, for instance, would have to pay royalties for the use of your song in an outro.
There are also two different types of royalties.
- Composition copyrights: The person who wrote the lyrics and melody
- Sound recording copyrights: Usually owned by the record label and the recording artist
Sounds complicated? Let’s look at how it works.
The majority of music streaming services accept advertisements and subscriptions. Advertisers pay streaming services like Pandora and Spotify to provide you with ads while you listen to music. The money you pay for the service goes directly to it if you choose to pay a monthly fee.
Artists do make money from streaming services through royalties. Per stream, Spotify pays between $0.006 and $0.0084 on average, according to a company filing. So while streaming is a powerful way to get your song heard by millions, it’s not exactly the most lucrative method.
What are the benefits of monetizing your music online?
You can monetize your music online in many ways. A digital revenue stream is always a good idea, whether you’re just starting out in your career or already touring the world.
1. It’s profitable
You can make your music more accessible by putting it in a digital format. The more people who download your music, the more money you’ll make.
Revenue from digital channels can be scaled.
The number of people you can reach with any physical distribution is limited – or how many CDs you can burn at a time.
The other method of physical music sales (selling seats in a venue) is not as popular as it used to be. You can grow both your sales and reach when you monetize your music online.
2. It allows you to engage with your audience
While concerts and personal performances have always been great for connecting with fans, you can do the same with your music by keeping it in a digital format. Online distribution allows you to market your music quickly, and you can continue to do so even after venues reopen.
3. It’s simple
You and your band can monetize music streaming in many different ways. In no time at all, you’ll be streaming live performances from songs you’re offering.
Streaming music can be monetized in a few different ways. We will review the most common ways musicians monetize their music:
3 Common Ways to Monetize Music
1. Use a distribution platform
Streaming does not make much money for artists, but it is an important channel for exposure and accessibility.
Streaming services distribute and collect royalties through distribution platforms. Your music can be sent to major streaming services such as Spotify, Apple Music, and Google Play. Others distribute to niche platforms that cater to specific genres.
One benefit of many of these platforms is that they offer advertising and profile management options. In other words, these platforms enable you to grow your audience once your music is distributed.
Most of these platforms charge fees to artists, but some offer free access to artists. It is important to consider your priorities when selecting a platform.
You might favor a platform that focuses solely on distribution if you are already mastering and developing a social media marketing strategy yourself. You might consider investing more into a distribution platform if you’re trying to source a producer.
The following are some of the most popular distribution platforms:
Using Amuse, the songwriter can retain all of his or her copyright. Social media distribution is even possible with their pro version – including Instagram and TikTok. Independent artists and aspiring artists will find it an excellent choice.
Spotify for Artists
Spotify for Artists distributes exclusively through Spotify. This is a huge draw for some artists because Spotify has 345+ million users in over 90 markets. Through Spotify, you can customize your own Spotify experience with ads, profile tools, and Canvas – a short looping visual you can add to every track on the app. Musicians and marketers alike will find this option useful as it offers analytics for free.
Landr distributes to every music streaming service for a monthly fee of $6, a yearly fee of $48, or both. Besides offering “artist-friendly” tools, it also provides free educational content to help you grow your sound.
Over 150 digital stores and streaming services are available through TuneCore across more than 100 countries. In case you plan on touring soon, it gives you comprehensive sales data to better understand who your listeners are. Pricing for distribution varies depending on the type of content you release and varies annually. When you release a single, you’ll pay $9.99 a year. You can also master your tracks with TuneCore.
2. Sell digital downloads on a community platform
With digital downloads, artists can make direct profits from their music sales, not just royalties. The money you receive when someone downloads your song goes straight to your pocket and to the consumer.
The free, community-based platforms are where many artists start before moving on to the major streaming networks. Community platforms provide exactly what they promise: a community. These sites allow you to access a new pool of fans who are there to discover new music.
Artists can create their own online store with Bandcamp to sell and promote their music. By using Bandcamp, your fans can listen to and buy your music directly. Songs and albums can be sold at any price and you can reach a whole new audience. Fans can discover music on Bandcamp through a music feed and artist recommendations.
In addition to connecting creators, SoundCloud also unlocks future fans. SoundCloud allows musicians to collaborate and receive real-time feedback. Your songs are also available for download through SoundCloud.
Sell digital downloads on your site
You should start a music website now if you don’t already have one. Your own website is a great place to offer digital downloads. In addition to being a great marketing tool, it’s the simplest way to get paid for your songs. A website is the perfect place to point managers if you’re looking to play new venues or score a gig. By creating a concrete example of who you are and what your sound is, you demonstrate that you mean business.
3. Make use of a music licensing service
Permissions to use your music are granted through music licensing. By selling the license for a song, you can earn money. Movie productions, content creators, advertisers, and brands are typically the biggest licensees of music.
Music licensing is a complex process. Some companies require that artists work exclusively with them. You probably won’t be able to license another song to a movie production if you license a song for commercial use.
It is for this reason that a music licensing service is beneficial. Rather than doing the work, the service makes the profit for you.
Music licensing services are available in a variety of markets, however. Typically, small creators and businesses will utilize a music licensing service with a large content library and low fees, and the song standards these services accept may not be as high as your masterpieces. You could also focus on serving this market by producing many singles that cater to vloggers and social media video creators.
Either way, it’s important to research a song before it can be licensed out. Here are some of the best services:
Your music is acquired by Epidemic Sound, who pays you in advance. Your songs can’t be added to anyone else’s catalog once you’re in theirs. A subscription-based service, Epidemic Sound offers over 32,000 tracks to YouTube creators. Submissions to this service are distributed to streaming services and pitched to playlists.
With the goal of creating a high-quality royalty-free music marketplace, LuckStock is a European company. Your song will earn at least 50% of its revenue directly to you, and you will retain the right to use it. This means you can sell your songs anywhere you wish.
Independent artists and bands are featured on Music Vine in a small selection of songs. A range of cinematic production tracks are available to independent filmmakers. By offering an exclusive license, you get 60% of the profit.
Other ways to monetize as a musician
Music is no exception to the rule that it takes a lot of effort to make a living off of passion. There are many ways to monetize your skills. Music may be the most important.
An average working musician earns about $35,000 a year. There are many ways to expand your skill set to make more money, or even more time to do what you love. In addition, it’s always a good idea to develop multiple streams of revenue within the creative industry.
In addition to selling your music, here are some other ways musicians can make money:
Sell band merchandise online
Why not sell other things as well? You already have a website to sell your music. Why not sell other things? People love band t-shirts.
You can easily and affordably allow your fans to support your band by offering them band merch. Ask your fans what they’d like to see and tailor your offerings to them if you have a social media following. By offering exactly what your clients want, you can recoup your vendor investment.
Offer music lessons
It probably took you years to master your instrument, and there are thousands (maybe millions) out there who want to learn. Now that most classes are digitized, your market is much larger than before the pandemic.
The number of students who take at least one online course has increased by 151 percent over the past few years, and many students are becoming more comfortable with online learning.
The price of private music lessons varies, so research what you could ask for given your particular instrument and level of expertise.
We all miss live performances, here’s the thing. Free live performances are a fantastic marketing tool even if you’re just doing them on Instagram.
A live-streaming platform would enable you to reach an audience from multiple locations if you are looking to go live frequently. Maybe pull together some local artists for a virtual concert or workshop.
Video on demand continues to grow in popularity and is set to outpace other methods of consuming content.
For artists seeking passive income, video monetization is an excellent option. Offering gated content is sure to generate revenue if you already have a big fan base.
Your audience can watch streamed video content wherever and whenever they like, which is the best part of creating it. Increasing your fan base will make these videos increasingly valuable.
You can experiment with different tactics to see what works best for you and your lifestyle when it comes to monetizing music. The trick is to keep an eye on your audience as these methods are constantly evolving.
With community platforms, you can reach new fans, fellow artists, and collect money directly via digital downloads.
- Streaming platforms won’t generate much income for you, but they will widen your reach and – in some cases – verify your legitimacy.
- If your song appears in an ad or a content creator’s outro, then it’s well worth the effort.
- Live streaming and video content have no limits for a growing band. Videos have a huge impact on any type of audience, and fans can watch live streams again and again.