Brother, Can You Spare A Dime?

As if the economic landscape of the indie music world was not fragile enough, the emergence of the Coronavirus has crushed the live performance scene, with most venues around the world currently shut down with no firm end date in sight. For many artists, this is the primary source of income received for their music and without it, their home budgets are taking a huge hit. As a result, the online world has now become their primary source of musical revenue. Some aspects of an artist’s online presence do offer incremental income, while others offer no financial benefit to the artist whatsoever.

What follows is a roadmap of sorts to explain how some of the branches of the online music world puts money in a musician’s pocket and some of the pitfalls that can be encountered. I should mention that none of this is fruitful without a solid social media strategy, but that is a topic for a separate article down the road.


Online Live Performances. This has been a rapidly growing trend over the last month as people have been forced to stay at home. In the past, most online live performances consisted of phone camera footage of a live venue performance, often of not-very-good quality. These live show captures do serve a useful purpose for the avid fan too far away to attend the performance in person.

More recently, these performances have taken on a more intimate feel, typically originating from an artist’s living room.   The sound quality of these in-house concerts is typically quite good, and it provides the viewer with a very accurate representation of the artist. Artists that are adept at social media multitasking are able to carry on conversations with their audience between songs and the audience is frequently sharing comments during the performance and creating a sense of community around the performance.

Unfortunately, most of these performances are offered completely free to the viewing audience. However, a new trend is emerging where the artist posts a link to a ‘virtual tip jar’ where viewers can throw a few bucks in the bucket as a token of their appreciation. I see this as a great addition to the online viewing arsenal of the indie musician and potentially a growing part of their income stream. You could even take it a step further by offering a reasonable subscription service where these performances become exclusive archived content after a period of time in the social media arena.

Going forward, I see the online ‘concert’ growing not only in popularity but coming with more complex and better production quality. Bands coming to their audience live from a ‘venue’ with a soundboard audio feed to accompany multiple camera angles. Performances coming directly from a studio where the acoustics and sound processing can produce an almost CD quality experience. The beautiful part of this for the artist is the venue never has to change and a virtual tip jar can be in place. The possibility even exists for an artist to sell tickets to the performance and provide the ‘exclusive’ concert only to those ticketholders. A garage can be transformed into a permanent virtual venue. Think about it- no equipment load-in and load-out, no requirement for a minimum draw to make money and not having to be at the mercy of a bar owner to get a date to play. While this will never replace the truly live venue experience, it can potentially be an excellent supplement to live performance revenue.


Online Streaming Services. I’ve been extremely transparent about my dislike for the streaming model, and I have yet to see any platform actually make money streaming music, but the reality is it is the elephant in the room and the most influential arm of the music industry. Careers flourish and flame out based on streaming numbers. A musician’s plays and followers can determine the ability to gig in many venues. And despite the importance of this arm of the business, it represents the second lowest rate of return in terms of earnings. Royalty rates are ridiculously low and performance payments require many thousands, if not millions of plays to hit a break-even point, let alone show a profit. I don’t have to like the business model to see the importance of it to musicians, but it is rare to find an independent artist that can replace gig income with streaming. In many cases, the independent artist is not going to generate enough plays to even get a piece of the pie, meaning that their music is essentially being offered for free.


Online Music Sales. From where I sit, this is the most underutilized tool in the box for most musicians. All too often, I see bands and artists point their listeners to YouTube or one of the streaming platforms when promoting a song. Anybody that clicks through and likes the music simply adds the music to their playlist and then listens to it on demand whenever they please at no cost to them. The sales opportunity is lost forever.

What if, instead of pointing a potential customer to the free option, have them click through to one of the platforms that sells your music. Almost all the big-name platforms offer a song preview function that gives the listener enough of the song to decide to buy without giving away all of the goods. It can also lead them to ‘exclusive’ content not available on the streaming services. While the rate of return is not as high as I would expect to see for a digital product, it still is substantially higher than streaming. How many Spotify plays would a fan have to initiate to equal the revenue from a digital sale of the same song?

I realize the conversion rate here is going to be extremely low, but something is better than nothing, right?


Internet Radio. The lowest revenue stream known to the musician. Period. I’ll bet you didn’t expect the internet radio station owner to come out and say that! There are a number of factors that lead to this low rate of return:

  1. Many stations have extremely low listenership. This impacts the artist because royalties are paid based on the total listening hours a station accumulates in a month. A station can broadcast 24/7, but if they only have 5 listeners a month that each listen for 10 hours a month, they are only reporting and paying on 50 Total Listening Hours for the entire month and payment is only going to the artists that are being played when folks are listening. Add onto this the fact that the royalty rate is only slightly better than streaming and you see this is not going to pay the bills.
  2. There are more unlicensed pirate stations not paying royalties than legitimate licensed stations. This is the primary cause of the point made above. With so many illegal options out there, the market is diluted. This is not a listener problem because it is almost impossible for a listener to discern the difference. It is an oversight issue that requires immediate attention. Until the government intervenes, enforces compliance and cleans up the industry, the great majority of the listening hours are not going to result in any payment to musicians. In the US, there are only three ways to gain proper licensing to play music- through Live365 or Pronet, or paying directly to the Performance Right Organizations (ASCAP, BMI, SESAC and SoundExchange). The first two options are basically aggregators that work on behalf of a group of stations to negotiate royalty rates and take care of the reporting and payment to the PROs. Paying directly to the PROs is much more expensive in terms of manhours required to report station activity and the cost of the proper license (running into the thousands of dollars a year).
  3. Some stations are adopting a model of providing on demand replays of their music shows. This is problematic because the performance license obtained by legitimate stations is only good for the live performance of music. Once all a listener has to do is hit a play button to listen to the show at their convenience, it requires mechanical licensing like a CD or digital download. These licenses are much more expensive than a performance license and the reporting element is much more complex. While I am sure that some stations bear this expense to do it right, the great majority of replays are resulting in more free on-demand content that generates zero income for the artists.

With all of these negatives, why would a musician even consider internet radio? Because when done right, it is still one of the best promotional tools available to an artist. A good jock can easily create music buying moments with their listeners if they are constantly pushing the mindset of owning the music heard. I believe a cleanup and consolidation of the internet radio world is right around the corner and will resolve many of these issues, leaving licensed stations to rule the airwaves just like the terrestrial radio world. That’s why I do what I do and do it the right way. Promoting music is in my blood and I truly believe that internet radio provides artists with a bunch of free press that is hard to find anywhere else.


Podcasts. It is a fact that most of the major podcast hosting sites, Spreaker being one of the most well-known, have specific language in their Terms of Service that forbid the use of copyrighted music in any programming hosted on their service. They do this because of the design and nature of the podcast product, which is meant to be downloaded and accessed at the whim of the listener, and thereby requiring a mechanical license. If your music is being used on a podcast, the odds are in favor of you not receiving a dime.


It absolutely sucks that live venue music has (hopefully) temporarily disappeared from the world, and I look forward to attending many more live events down the road. Until then, artists need to rely on alternate income streams to lessen the blow. If you make the right choices, with a little hard work you may be able to weather the storm. To everybody, please stay safe and healthy and do the right things to help us all get through this catastrophe. We all matter.