How music artists make money

Since the dawn of mass culture, talented musicians have been elevated to the heights of celebrity.

When you think of the most famous people to have ever lived, musicians are likely to feature high on that list, with the likes of Elvis, The Beatles, Madonna, Prince, and David Bowie have left a permanent and global mark on our collective culture. As you might expect for such vaunted figures, their paychecks tend to match their inflated status.

Once you have made it to the tippy-top of the music industry, you are likely to make more than a Hollywood actor, a banking CEO, or a professional athlete. But how exactly do these musicians make money from their most important product – their music? Let’s break it down and see how the ways in which top musicians get paid have evolved over time.

Record Deals and Tickets

Today, record deals and concert ticket sales still make up a decent chunk of change for any artist. However, this is rarely the most important source of income for any musician, as we shall see.

For much of the 20th century, record deals, ticket sales, and cuts from album sales were the only ways that artists made money. This is why most of the most expensive record deals ever inked happened just prior to the rise of social media.

There’s the $200 million paid to U2 for a follow-up to The Joshua Tree and Achtung Baby in 1993, the $150 million for Bruce Springsteen’s comeback album in 2005, and Robbie Williams’ $125 million deal with EMI in 2002, to name a few.

Although there are a few outliers in the contemporary music era who have made huge sums of money from concert and festival sales, including Beyonce, Taylor Swift, and Lady Gaga, this is becoming rarer and rarer.

In the 1980s and 90s, musicians were much more likely to make most or all of their money from performances, with the likes of Nirvana and The Beatles owing much of their vast revenues entirely to paper ticket sales. Today, tickets are more expensive than ever and attendance is at record levels, but the proceeds of these are less important to a musician’s bottom line than ever.

From Radio Plays to Impressions

Today, as it has been for a century, musicians receive royalties every single time their song is played on the radio. Even today, in a world where radio is often considered a dying technology, airtime royalties are higher than at any other point in history.

However, radio airtime is more about increasing awareness around a song these days than about a bottom line. This is because, in the digital age, social media is by far the most important driver of success as a music artist.

Making Money in the Social Media Age

So, how do musicians make money from social media? Well, the revenue effects can be both direct and indirect. In a more indirect sense, songs that become a hit on algorithmically driven content platforms such as TikTok are usually destined to become the hottest tracks of the year.

This has been the case with mammoth hits such as “Just for Me” (PinkPantheress), “Driver’s License” (Olivia Rodrigo), “WAP” (Cardy B), and “Savage” (Megan Thee Stallion). In fact, the platform has become so central to its success that labels will often produce songs specifically designed for TikTok, while also editing Spotify entries to make songs easier to find for those who might have heard a snippet from a 10-second video.

The nature of platforms such as TikTok means that a song from an unknown artist can become the biggest track on Earth in 24 hours, making it central to success for anyone in the industry. The more direct impact of this on earnings is clearly apparent. One fascinating case study here is this roundup of musician net worth, based on payments for sponsored Instagram posts before and after a song was dropped on social media. Here, we see how a single TikTok hit can dramatically multiply an artist’s net worth. For example, Olivia Rodrigo’s payment per Instagram post jumped 349% following the release of “Driver’s License,” from $22,514 to $101,085. Today, social media success will shape your success as an artist.

How artists make money is constantly changing and is always closely tied to technology trends. As such, you can expect this brief history to require updating sometime in the near future.

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Buddy Iahn

Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites. Email: info@themusicuniverse.com

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