March 21st, 2012
The Future of Music Coalition recently published a 12 page case study profiling the income from 2008 – 2011 of a working indie rock composer-performer. The full report is available here although I’ll go through much of the information below.
Who is the indie artist that was profiled?
The artist profiled is anonymous but he’s been active in the industry since 1999, makes 100% of his income from music, and his primary genre is rock. He spent a significant amount of time during the profiled period as a salaried touring member of two independent rock bands and also toured with his solo work. The musician manages his own tours, is involved with several indie record labels on a non-exclusive basis, is self-employed, and does not have health insurance or a pension. He’s credited on 14 albums as a leader, 32 as a band member and 27 as a sideman.
Curious as to what his primary sources of income are?
30.5% of his income from 2008 – 2011 came from performance fees for solo shows and another 29.7% came from being a salaried member of two other bands; 21.5% came from compositions; 15% from publishing (including advances and royalties) for one of the bands he wrote with. CD sales only comprised 12.1% with record royalties making up 3.5%. The case study also looks at each year in detail, which shows how changes in career focus affected revenue streams. For example, when he no longer worked as a salaried member of the other bands, his solo live performance income rose to comprise 49.2% of the gross income and CD sales on the road made up 22.4% of the income.
How was he spending his money?
The case study also discloses a breakdown of the musician’s expenses. Looking at the three year period together, travel expenses made up 36% of his overall expenses, overhead was 13% (includes communications, legal, insurance, office expenses, and mailing expenses), equipment was 11%, publicity 9%, recording 8%, merch 7%, other musicians 11%, and 4% for booking commissions, among some other minor categories comprising lesser values. Overall, the expenses consumed about 53% of the musician’s gross income on average for the three years. In 2011, the artist’s overall net income rose to be 66% greater than his net in 2008. This is mostly because 2011 was the first year that solo touring was profitable, rather than being subsidized by the other revenue streams.
What lessons can be learned from the report?
The case study concludes by reflecting upon the nature of investment and work cycles in indie rock. It’s major conclusions are:
(1) Touring is an important revenue stream.
(2) Compositions offer long-term value. By contributing to the songwriting in the major band of which the artist was a salaried member, he received publishing advances and royalties as well as PRO royalties for at least 5 years after the song was written.
(3) Tradeoff between financial risk and creative control. Even though the artist’s work touring with an established rock band was a good financial move with very little risk, there was little creative control or input. In later years, the artist took on greater risk by focusing on and managing his own recording and touring projects. Even though he’s responsible for the costs, he also receives all of the profits.