The music business has always been challenging, unpredictable, and brutal. Few people, even the most talented, can make a living from it.
Those fortunate enough to break through to wide-scale popularity still struggle to make creating and performing songs pay.
When digital streaming services first came out, many hailed it as something new and exciting. It has been for consumers. Not so much for musicians.
The fact is that artists struggle to make money from both recorded and streamed music. They must instead rely on live performances.
Most musicians earn their bread by performing in concerts. Nearly 80% of the revenue earned by most recording artists comes from the latter.
Giving live performances is not only about ticket sales; it is also a way to stimulate sales of the recorded and streamed music.
Performing live entices fans and has the potential to extend the reach of a musician’s popularity. All of these things—concerts, recorded music, online streaming—help musicians sustain themselves.
However, making money from concerts is not that easy. The thing about music, whether it is being done in a recording studio or on a concert stage, is that it always requires a team of people.
Unlike the painter, poet, or novelist, the modern musician can rarely create music on their own. It requires a significant logistical effort to make it happen.
What Percent of a Concert Does the Musician or Band get?
I am an intellectual property lawyer who works mainly with musicians and bands that are well established in the industry or are on the rise.
In truth, I am the only one looking out for the interests of the individuals who make the music. In order to represent my clients, I must understand the music business, and, more to the point, how money is distributed in it.
There is no universally fixed percentage for musicians when they do concerts. It mostly has to do with trends and conditions in the industry.
As a lawyer, I strive to get the best deal for my clients. Here is how money from concert ticket sales typically breaks down:
-1% for licensing agreements, which are related to anything used by the band that is trademarked
-5% of the sales must be put toward taxes (this will be different in countries outside the U.S.)
-10% in booking fees
-25 to 40% goes to pay for the venue, staff, stagehands, furniture, rigging, medical staff, and security
-5 to 15% goes into the advertisement and promotion of the event, which is essential if anyone is to buy tickets at all
The remaining 30 or so percent of sales go to the musician or band. Out of this pot, they must pay their production crew and manager.
The latter can claim between 15 to 20%. So, this means that the musicians get to keep, on average, 70% of the 30% that they receive from concert ticket sales.
A musician would have to attain record sales for each one of their concerts in order to make any real money from them.
That is why I advise my clients to leverage the whole of the touring experience. They cannot rely on ticket sales. They must make the most of the tour in general.
How to Make Touring Pay
If you are a touring musician, then you are no doubt familiar with the depressing reality of ticket sales. There is simply not enough in this particular pot to feed everyone. This is especially the case if you are in a band.
However, there are ways to make touring work financially. It is possible to make your main revenue stream, and a lucrative one at that. Here are some of the things you can do:
1. Optimize your merchandise
If there is a large and sustained demand for you to give live concerts, then you are probably famous enough to have merch contracts.
Such contracts tend to be more generous to artists because they are linked exclusively to your name and image as a celebrity. You need to make the most of your merch while on tour.
The best way to do this is to cater your products toward your audience. Even before your tour starts, you should work with the manufacturer to produce the kind of items that your audience wants.
If you see evidence that your female fans want girl-sized t-shirts, then update your inventory accordingly.
Ensure that these items are available online well before your next tour begins so that your fans will have time to make their purchases before coming to the concert.
You can also start a new trend. You do not have to confine your creative abilities to music. As a touring musician, you are by definition an entertainer and trend-setter.
Embrace these roles by experimenting with your merch. Follow your instincts and pay attention to what is trending on social media and in online fan hubs.
2. Sell VIP packages
The days of the enigmatic, mysterious, and retiring artist are over. While it is still important to make magic and spectacle for your audience, you must at the same time be accessible to them.
Selling VIP packages to fans is one of the best ways to make money on tour.
In most such packages, fans get to meet artists, get their merch signed, and get a picture taken with them. You may be surprised by the amount of money people are willing to pay for such access.
You can sell a VIP package for more than twice the amount of the normal ticket, and your most committed fans will pay it.
As a recording and touring artist, your days are full and demanding. You will no doubt have little time to constantly update your Facebook, Twitter, and Instagram sites.
That is why you should engage professionals to do it for you. This is a real thing. You can hire people who know how to make you a real presence on social media, and make it seem like you are the one who is actually doing the updates.
The more of a presence you are on social media, the more effective the campaign for your upcoming concert. The vast majority of concert ticket sales are presales.
You can use social media to direct people to ticket sellers. Social media also allows you to gauge demand for performances in various locations.
This can give you some leverage when negotiating with vendors, venues, and other entities involved in the concert.
4. Get guarantees
In some instances, it may be possible to get a guarantee from the promoter. If the latter is confident that ticket sales will be high, then they are likely to cut the deal.
This means you get a guaranteed percentage of the ticket sales. I have negotiated a few of these, and they worked out well for my clients.
However, it is still risky. You can make a serious profit if you attract a large audience to your shows. Things can also go bad for you if there is low attendance.
Getting a guarantee is like working exclusively on commission. There is no base pay. You only make money if you sell tickets.
Successful musicians make the most of their yearly income by going on tour. The only way to get the most money from such tours is to maximize the power of your name and status as a celebrity.
You cannot rely solely on ticket sales. You must run a brand and marketing campaign in conjunction with your tour.