Cancelled gigs and plans, closed clubs and country borders. Thousands of DJs and producers have lost their jobs. Of course, the coronavirus pandemic has affected all areas of our lives, but I would like to talk specifically about the music industry and the income of artists in particular.
Almost all artists strive for a busy touring schedule. And that’s not surprising since the primary income for artists comes from performances. But here’s the problem: if you put all your resources into one single source of income, you become very vulnerable. The artist had ten confirmed performances, and then they’re gone. The situation with closed clubs and cancelled airlines seems like something from a science fiction area, yet it’s happening worldwide right now.
The main lesson for artists should be the saying “don’t put all eggs in one basket” and striving for a distributed income structure. Ideally, three or five sources of income should generate roughly equal shares.
|Gigs fee — 90%
|Gigs fee — 30%
|Streaming royalties — 10%
|Streaming royalties — 20%
|Educational products — 20%
|Soundtracks for films and commercials — 10%
|Mastering services — 10%
|Web graphic services — 10%
The structure in the right column is not ideal either and here just for the illustration. Still, the main thing it provides is an active reserve and the ability to pay the bills, even when the primary source of income is lacking, like many artists all over the world are sadly experiencing now. For example, months with no gigs (which can happen even without coronaviruses) is no big deal if other sources of income can generate 70% of your regular income, so you can pay the bills and use this time to focus on other projects.
In my educational talk back in 2017, I advised aspiring producers to have a financial backup and not be in a hurry to quit their day job. The combination of regular work and music is an example of a distributed income structure.
I don’t have a recipe or advice on making a distributed income, but it seems like a good idea to start by understanding the importance of the concept itself. And, of course, this does not apply only to the music industry.