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music-hatWhile we took the time to look at all the costs associated with buying, renting, and learning a musical instrument, it is important to remember that music can provide financial returns next to its role as a hobby. Be it through the pursuit of a full career in music, or instead a lucrative hobby, there are certainly options available for musicians to make contract-based income through their talents. In this article, we’ll dive in to a few of the more traditional sources of income for musicians, and how it is that a musician of any level can access them.

The most obvious way for a musician to earn an income through their trade is by playing concerts and selling recordings. Since most artists will never actually see major distribution agreements in their lifetime, it is important to recognize how it is that these products will generally be produced and distributed independently at the concert itself. What I personally find most interesting about this model is the way in which the economies of scale actually most favor the production of an independent CD, because the revenues do not get eaten up by distribution costs. In general, a no-name band will earn between $100 and $7,500 per show played.

That being said, these numbers need to be taken into perspective. Venues will not usually pay the band itself, and will instead allow them to charge cover for ticket sales, meaning that the band itself must promote the sale of their own tickets. This sort of agreement adds a great deal of risk to the equation, because it places the musicians in a position where they need to take on the role of a marketer (one which they are not likely trained for).

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From there, they might expect to sell 1 recording for every 40 people that attend the show. This means that they need to be particularly aggressive in promoting their live shows, so as to get the foot traffic to their show.

That being said, the pay curve quickly increases for more successful acts, to the point at which incomes between $5,000-$50,000 become fairly accessible for a reasonably established act with a consistent fan base. To put these numbers into perspective, a high-powered super-star act can later look forward to earning $700,000 per show, assuming they have the equipment available to support such a gig.

While performing is a fairly attractive income source for talented composers and performers, it is a notoriously difficult route to pursue. More casual musicians may therefore prefer to pursue teaching as a venue for earning an income. Working with a local studio, a teacher can expect to earn between $12-30/hour with consistent business. Alternatively, they may choose to solicit their own clients, and therefore earn at their own rate, without needing to pay the studio. This also comes with the benefit of being able to write off your own home studio, vehicle, and instrument as a income-producing asset.

The last conventional way to earn an income as a musician is by doing freelance composition. This venue is attractive for individuals that are looking for all the fun of performing independent compositions, without the stress of actually being on stage. What’s more, it’s a particularly lucrative hobby, though particularly competitive. In general, a composer will earn between $500-$5000 for a small radio-commercial (assuming they forgo royalty rights), and can make even more if they become involved with an independent video production of some kind. The trick to this kind of venture is to then maintain a steady stream of work to keep the income coming. Because of the highly competitive nature of the business, as well as its inconsistency, hiring an agent for 20-30% of the commission might be a worthwhile investment.

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Total Costs Performance ($500/show) Teaching (# lessons) Composition ($1200/job)
$8,000 16 400 7

 
Looking at the numbers, it becomes apparent that the break-even of learning an instrument is still fairly attractive. Even by simply teaching lessons twice every week at $20/lesson, a musician stands to begin receiving a return on their investment in as little as 4 years (a good idea, given that this entails only 1hour of work a week).