Have you always wondered how the music industry works? How much artists get paid? How they get paid? You will find everything you need to know about music entrepreneurs in the single article.
The music industry is an ever-evolving landscape requiring creativity, persistence, and business savvy. Music entrepreneurs have a passion for music and a desire to turn that passion into a profitable business.
However, the reality is that earning a living in the music industry can be incredibly challenging. With so much competition and changing trends, music entrepreneurs need to deeply understand the industry and be willing to adapt to new opportunities and challenges.
Consider: the average per-stream payout from Spotify is a shocking $0.006 to $0.0084.
Music has always been a tough business, but recent developments have put the cat among the pigeons. The music industry has undergone major changes in the last couple of decades, making it even harder to make it as a musician.
In this context, exploring how music entrepreneurs can succeed in this highly competitive field is essential.
What Is Music Entrepreneurship?
A music entrepreneur is an individual who seeks to turn their passion for music into a viable business. This may involve starting a record label, managing artists, promoting concerts, or developing new technologies to enhance the music industry.
Music entrepreneurs are creative, driven individuals who understand the challenges and opportunities of operating in this highly competitive field.
They possess a deep knowledge of the music industry and constantly seek new ways to innovate and stay ahead of the curve.
While success as a music entrepreneur is never guaranteed, those willing to work hard and take risks can achieve great things in this exciting and dynamic industry.
What Is The Music Industry
The music industry is a complex ecosystem of individuals, businesses, and organizations that work together to create and distribute music. It encompasses various activities, from creating original music and sound recordings to marketing and distributing those works to consumers.
The industry comprises many segments, including artists, songwriters, record labels, music publishers, distributors, promoters, and concert venues.
At its core, the music industry is driven by the creation and sale of music. Artists write and perform songs, while songwriters compose the music and lyrics.
Record labels sign artists and songwriters to contracts, oversee the production of recordings, and market and distribute those recordings to consumers. Music publishers help songwriters secure deals to have their music used in films, TV shows, and commercials.
Distributors work with record labels to ensure that their music is available on various streaming services and physical formats.
While the music industry has evolved significantly in recent years due to changes in technology and consumer behavior, it remains a vital part of our cultural landscape. Despite the challenges of earning a living in this industry, music continues to inspire and entertain millions of people worldwide.
In today’s music industry:
- Past promotional practices don’t work anymore; for instance, radio airplay has no benefits
- Lucrative record deals are as scarce as ever
- Venues pay poorly for live shows, except mega shows exclusive to megastars
- Ticket prices to live shows are high, excluding many fans
- Consumers are inundated with a glut of music choices, much of it sounding the same
These and other developments have led many in the music industry, including music artists, to realize that the only way to make money from the art is to become an entrepreneur.
Famous entrepreneurs in the Music Industry & Their Income
The music industry is awash with entrepreneurs who made an absolute killing. Here is a very short list of these geniuses:
- Rihanna (Net Worth $1.7 billion)
- Andrew Lloyd Webber (Net worth $1.28 billion)
- Sir Paul McCartney (Net worth $1.2 billion)
- Jay-Z (Net worth $1 billion)
- Herb Alpert (Net worth $880 million)
- P. Diddy (Net worth $820 million)
- Celine Dion (Net worth $800 million)
- Dr. Dre (Net worth $800 million)
- Bono (Net worth $700 million)
- Dolly Parton (Net worth $600 million)
- Simon Cowell (Net worth $600 million)
Notably, most are solo artists in their own right, but they have made their fortunes by being clever with money and grasping business opportunities, especially collaborations with other artists. One of them doesn’t even have a note of musical training. These music artists didn’t wait for record companies to afford them opportunities; they created their own.
Andrew Lloyd Webber
Andrew Lloyd Webber, the most commercially successful composer of all time, responsible for enduring musicals like Cats, The Phantom of the Opera, Joseph and the Amazing Technicolour Dreamcoat, Jesus Christ Superstar, Evita, and countless others, set up his entertainment empire, Really Useful Group (RUG), in 1977. Many of Lloyd Webber’s shows have run for decades in major cities across the globe. He owns seven theatres in London.
In addition to composing, he produces stage shows and three of his musicals have been adapted into feature-length films. Lloyd Webber is reportedly exceptionally smart about money and marketing, working just as hard on marketing as composing.
Jay-Z
Born Shawn Corey Carter, Jay-Z is, first and foremost, the most influential rapper of all time in addition to being a songwriter, record executive, entrepreneur, and media proprietor. As a musician, he earned 19 Grammy’s and sold over 100 million records; as a businessman, he has made millions from his different ventures. Jay-Z
- Started Roc-A-Fella Music to sell his own records and later sold it for $10 million.
- Has an impressive investment portfolio worth millions; he invested in Uber, JetSmarter, Julep, and Awa, among others.
- Owns the platform Roc Nation to help startups.
- Started the highly lucrative clothing company Roc-A-Wear, which he sold in 2007.
- Owns two luxury alcohol brands.
- Owns the streaming platform, Tidal, which he launched in direct competition with Spotify – it’s reportedly worth $600 million.
Owns the premium cannabis brand, Monogram.
Rihanna
Rihanna is one of the most successful singers ever, having scored 14 No. 1 hits on the Hot 100 and 31 top 10 hits. But music is by far not her only source of income.
Her net worth exploded when she became a businesswoman. In 2017 she entered the cosmetics industry with Fenty Beauty, which turned the cosmetics industry upside down. Today, the company is worth billions. She followed that up with a lingerie business, Savage X Fenty in 2018 and Fenty Skin in 2020. And predictably, like so many before her, she entered the highly competitive celebrity fragrance market. She launched her first fragrance Reb’l Fleur in early 2011. Her second perfume was the hugely popular Rebelle. In the end, she released 10 different fragrances. Fenty also launched a perfume in 2021, which sold out in two hours.
Simon Cowell
Simon Cowell is a television personality, entrepreneur, and record executive. His professional life is all about music, but he is not a music artist – he plays no musical instruments and can’t sing, yet he’s one of the wealthiest people in the music industry.
Cowell has earned his fame and money through his ability to judge the musical ability of others. He is responsible for producing such enormously successful shows as:
- Pop Idol
- American Idol.
- The X Factor
- American Inventor
- America’s Got Talent
- Celebrity Duets
- Grease Is the Word
- Britain’s Got Talent
All these music moguls made their fortunes by branching out and creating various income streams.
Music Entrepreneur Ideas For the Freelancer
The music industry offers many opportunities for people to leverage their love for music to become an entrepreneur. None of these options are easy, and financial success won’t come overnight, but with dedication, anything is possible.
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Create a music app
If you are musically inclined and a techie, you are in the pound seats to become an entrepreneur of note. There are countless music app ideas that you can consider or come up with your own. Here is a list of ideas for music apps.
- Voice recording apps
- Music streaming apps
- Music producers’ apps
- Music learning apps
- Online magazine apps
- DIY DJ apps
- Concert-finding apps
If you love music and do software programming, creating some music app would be the best of two worlds, don’t you agree? It will require much effort, dedication, and passion, but there is loads of information online to guide you through the process.
2. Start a podcast for musicians
Musicians need all the help they can get to make money from their art. Start a podcast that provides useful information for them, for instance:
- Information about the music business: marketing, branding, and entrepreneurial options
- How to release and promote music creations
- Interviews with professional musicians
- Tips from gigging musicians
- How to build a sustainable music career
- How to create different revenue streams through music
- How to make more money from music
- Music marketing through social media
- Interviews with successful music artists
- Interviews with founders of music startups
- The latest news and trends in the music industry
It’s possible to monetize your podcast through affiliate marketing, sponsorships, advertising, selling online courses, coaching, offering additional content like video versions of the podcast, hosting events, public speaking, and selling physical products.
You can make a decent income from podcasting, but you have to be in it for the long haul.
3. Cash in on the karaoke craze
Karaoke has been popular in Asia since the late 70s and the rest of the world has also woken up to the great joy of this form of entertainment.
Westerners are taking to private karaoke events as an alternative to other forms of entertainment. Karaoke offers an intimate experience with close friends or colleagues and is being used for all sorts of events. Companies around the world are using private karaoke boxes to celebrate employees and teams. It’s also common at restaurants, bars, clubs, and private residences. So if you love music, and like spending time with people enjoying music, setting up a karaoke business may be a sound business option for you.
You can go all out and buy the latest karaoke equipment, or you can set up business in no time with a smartphone, a tablet, or a computer and a steady internet connection. Other equipment like a mic, speaker, TV screen and cables you probably have on hand. If not, they are readily available at a cost that suits any budget.
Follow this link to learn all the ins and outs of setting up a karaoke business.
4. Make Your Own Music and Promote It On Social Media
Making your music and promoting it on social media can be a powerful way to launch a career in music entrepreneurship. By creating your own music, you can showcase your unique sound and style and establish yourself as a serious player in the industry.
Of course, creating your music requires a significant time investment. Whether you’re writing lyrics, composing music, or producing recordings, it takes time and dedication to bring your vision to life.
However, the payoff can be significant.
By creating a portfolio of your work, you can demonstrate your skills and creativity to potential clients and collaborators and establish yourself as a serious player in the world of career music.
Once you’ve created your music, promoting it effectively on social media is important. Social media platforms like Instagram, Facebook, and Twitter offer powerful tools for connecting with fans and building your brand. You can build a following and create buzz around your work by sharing your music and engaging with your audience.
To promote your music effectively on social media, it’s essential to be strategic and consistent. Plan out a content calendar that includes regular posts featuring your music, behind-the-scenes glimpses into your creative process, and updates on upcoming performances or releases.
Use hashtags to help your content get discovered by new fans, and engage with your audience by responding to comments and messages.
By making your own music and promoting it effectively on social media, you can establish yourself as a music entrepreneur and build a career music that’s truly your own. With hard work, dedication, and a little bit of luck, you can turn your passion for music into a thriving career.
5. Become a music producer in the business
Becoming a music producer can be a challenging but rewarding journey. It often requires a combination of musical talent, technical skills, and business acumen. If you’re interested in pursuing a career in music production, there are a few key steps you can take to get started.
First, it’s important to develop your skills as a musician. While you don’t necessarily need to be a virtuoso performer, having a solid understanding of music theory, composition, and instrumentation will serve you well as a producer.
Consider studying teaching, as this can provide valuable experience working with other musicians and developing your teaching style.
Next, you’ll need to gain technical proficiency with music production software and hardware. This may involve taking courses or tutorials to learn the ins and outs of popular software programs like Ableton or Logic.
Building a home studio and experimenting with different production techniques can also be a great way to hone your skills and develop your sound.
As you develop your skills as a producer, it’s important to start building a portfolio career of your work. This may involve collaborating with other musicians, producing demos for up-and-coming artists, or creating your music to showcase your skills. By building a strong body of work, you’ll be better positioned to attract clients and build a successful career in music.
Finally, it’s important to network and markets yourself effectively. Attending industry events, reaching out to other producers and musicians, and promoting your work on social media can help you establish yourself as a professional music producer.
With hard work, dedication, and a willingness to learn, you can build a successful career as a music producer and make your mark on the industry.
Final thoughts
There are dozens of career paths open to music artists and music lovers, but they all require dedication and hard work. To be really successful and earn megabucks involves a combination of talent, hard work and serendipitous opportunities. While few are destined for those heights, there is plenty of room for many talented and hard-working individuals to make a good living from their musical skills or love for music.
