You Don’t Need Nashville #4: Money Money Money Money

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Money.  There’s an erroneous belief among some indies that signed artists make a lot of it.  Here’s an overview of how I actually make money and how much.  Reason #4 you might not need a label deal?  You won’t necessarily make more of a living with one than you would staying independent and working hard and smart.

1) MERCHANDISE: I carry no more than 4 shirt designs, three CDs, a poster and a sticker – not a ton of stuff compared to some artists – and make between $2-4 dollars per person at a show – sometimes more and seldom less.  Those figures are for merch sales at MY shows.  When I’m playing with other artists, at a festival or as an opener for Jars of Clay for instance, those numbers drop dramatically to as little as $.05 per person in attendance.  Out of that comes the cost of that merchandise to me, shipping costs, credit card transaction fees, taxes and management’s percentage.  Indie artists can match or beat my income from merch easily.

2) TOURING: Being an opener on a large tour generally pays nothing.  Opener are limited in what merch they can sell (one CD and one “other” usually).  Openers generally received per diem (a daily allowance for food).  They receive no salary but instead end up paying back their labels for the thousands (tens of thousands) paid out to buy a 15-20 minute opening slot on the tour.  Merch are less for openers so factoring in my cost for making merch, paying management, and flights home to see family while on tour etc actually I lost money on two tours and eeked out a living on the others.  Being an opener is an investment in the future and not something I do to make money TODAY.

3) RADIO: Thank God for ASCAP!  A PRO (performance rights organization) surveys radio, tv, satellite radio and large venues to discover what music is being played.  These players of music pay the PROs a fee for being able to play music and that fee is paid to writers (not artists) based on how many times their song showed up in the survey and a lot of other factors.  The PROs are ASCAP, BMI and SESAC.  I’m with ASCAP so I get payments every month from them.  I own most of my publishing so my share is larger than many new artists on their first contracts – This is how I live.  Check out these year-end totals for songs that got a lot of radio play (payments are made about nine months after actual radio play):

WELCOME HOME (#1 AC for 4 weeks, Charted on INSPO and CHR charts as well, 2nd most played song in 2001, still in rotation at major stations)

2002 $44,151

2003 $20,322

2004 $3,587

AFTER THE MUSIC FADES (#5 on AC chart, Charted on CHR as well, still in rotation at major stations)

2002 $9,671

2003 $4, 964

2004 $1,881

MOVE ME (#3 AC, still in rotation)

2002 $3,697

2003 $16,854

2004 $2,229

SHOULD I TELL THEM (#1 CHR, Still played a lot on CHR stations – here’s why some labels and artists love AC radio more than CHR)

2002 $3,987

2003 $1,267

2004 $1,736

ABBA FATHER (Top ten INSPO chart, still in rotation at some stations)

2002 $3,869

2003 $2,224

2004 $22

Keep in mind, again, as an indie you won’t get radio play no matter who promises you what.  I’ve never seen an independent artist, who hasn’t had a major label deal in the past, in the top ten on any chart,

4) PUBLISHING:  Publishers give advances – money given when a deal is signed that the writer pays back from their royalties.  Every dollar that writer makes in the future goes directly to the publisher until the advance is paid off.  Publishers can give large advances even for new artist/writers if they believe they’ll write a hit.  Advances can range from 5K-40K for new artists – maybe more but I’ve never heard of that happening.  Times are changing but there was an era in which new artists had to give their publishing to the publisher associated with the label.  In other words signing to WORD record would require that Word Publishing own your songs.  Same for all the majors.  Now things are changing and that is no longer required everywhere.  Because an artists does not have to give his/her publishing tot he label artists are said to be getting larger advances – being enticed to give their publishing up.  I cannot disclose the amount of my advances but I can tell you I paid all of them back and made royalties way beyond them.  From publishing I made more on the first record of course but I’ve averaged about 35K/year the last four years – I’m estimating here.

5) GIGS:  New signed artists are lucky to get any guaranteed fee for a show.  Starting out I got $400/show and that was with a song climbing the charts.  Struck me as odd too.  Or maybe you figure $400 isn’t bad, but factor in a road manager to handle the promoter and make sure technical needs are met and, most importantly, provide company and accountability on the road – yes, even Christian female fans get a little flirty and aggressive at times.  A road manager costs money.  New RMs can get as little as $50/show but the norm seems to be between $300-500/show among the artists I know.  Ouch.  Guaranteed fees for shows can be tens of thousands for a-list artists, but let’s be honest, you and I will never get that so why even discuss it?  An average B or C level artist can get from $1500-$8000 for a show, depending on radio play, sales, demand in the area, cost to the artist (solo acoustic? full band?  band with lighting and sound supplied by the artist? flying? driving? etc).  I’m somewhere in the middle of th

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most of the time.  Artists sometimes opt for no guarantee and a back end split (a percentage of tickets sold after promoter expenses) or a combination of the two (eg. $1000 and 50% of profits).  I don’t like back end splits.  I can’t plan my family’s life around “maybe money.” I need to know what I WILL get next month.  Indie artists can almost match signed C artist revenue from gigs if they tour frequently, do a great job consistently, don’t have management and have well-attended shows.  But that’s a lot of ifs isn’t it?

6) RECORD ROYALTIES:  There usually are none from a traditional record deal.  Royalties are eaten up by expenses that must be recouped (paid back) by the artist.  Companies like INO and INPOP have developed new deals that require more investment from an artist into the record budget but yield more even splits of the profits to label and artist.  Traditional deals, what most of us sign, still give the new artist less than 10% of suggested retail, or profits or some other number which usually isn’t enough to pay off the expenses of making the record (the recoupable balance).  I know gold or platinum artists probably actually see royalty checks but I don’t know an artist personally who has recouped their balance at the label (made up of their percentage of marketing costs, recording costs, advance money etc).  So don’t sign a deal thinking record royalties will come your way.  They probably won’t.

Now, all that’s only half the picture – the honest picture of how I get paid.  The other half can be summed up quickly: minus taxes, management (15-20% on everything and a smaller percentage sometimes on merch), booking agent fee (15-20%), band pay, business manager pay (you try figuring out artist taxes alone!), legal fees etc.  In the end I KEEP 28% of the money I’ve just detailed for you.  So in 2002 I made 44K on Welcome Home and I kept only 12K.  Big difference.  So do all the math and my first year as an artist I KEPT (lived on) 19K.  It’s gone up from there of course but that gives you an idea of the starting place for a new artist with a song that’s getting played a lot – something I am extremely grateful to have benefitted from.  I’ve known artists who worked as garbage men, waited tables, or taught private lessons to make a living while signed to major labels and reminiscing about the good old days when they made a living independently.

Sure I know an artist with a jet and a couple who are millionaires but they’re freaks of nature who’ve worked for many many years, own their publishing, get massive advances, sell massive amounts of records and have been favored with huge hit songs the likes of which you and I probably won’t ever write.  So let’s be realistic.  Don’t sign a label deal thinking you’re the exception.  In fact don’t sign for money at all.  All you really need financially are your needs met.  If you’ve got that being independent then my advice is to learn how to be content with that instead of jumping the fence thinking there’s a lot more green on this side of it.

There are great reasons to sign a record deal.  I’ll get to those.  But money isn’t one of them.  An indie artist can make a living and owe no one in the process.  I’ll tell you how next time.

Hope this helps.

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