Most people make less money playing music than you would think, but some make a lot

Statistics tabulated by SoundScan, an independent research firm that monitors U.S. record sales, confirm the [recording] industry’s predicament. Of the 6,188 albums released [in 2000], only 50 sold more than a million copies. Sixty-five sold 500,000 units and 356 sold 100,000 or more. In other words, more than 90% of last year’s releases flopped. Generally, a major-label album needs to sell about 400,000 copies to reach profitability.

-Los Angeles Times

The statistics above are getting kind of old, but I hope they underscore the following point. Some people do make a lot of money playing music, but this group comprises a very small percentage of all musicians trying to make a living playing music (I’d guess that it’s less than one percent). In this regard, the music business is like a lot of desirable professions. It follows what economists call a Paretto optimized power law curve (see Figure 1 below). That’s a pretty fancy name, and there is a lot of math that backs it up. But in practical terms, a power law curve graphically represents something pretty simple: a situation where there are a few big winners and many losers.

If you look at Figure 1 below, you’ll see that the x-axis (up and down), measures how much of something somebody has (e.g., money, fame, etc.). The y-axis (left to right) measures how many people have that thing, starting at zero where x and y meet, and then getting bigger all the way to infinity, as you move to the right.

The big winners are in the top left corner of the graph, because they have the most of whatever is being measured. If it was record sales, people in that spot would have the most sales. But as you can also see, the number of people inhabiting that spot is quite small (like close to zero).

Conversely, as you move to the right across the y-axis of the curve, the number of people increases, but the amount of stuff being measured decreases, and it is a steep downward slope. You don’t have to move too far to the right before the amount of stuff is significantly smaller than it is in the upper left corner of the graph. So if the stuff being measured is record sales, the number of records sold gets smaller really fast as you move to the right, and the number of people with smaller and smaller record sales just keeps getting steadily bigger.

What’s the take away point here? Well, even within the group of “winners,” if you could look at the actual numbers, you might be surprised to find that a lot of these folks make less money than you think. Sure, they make a comfortable living. But it’s also a part of the game to look as successful as possible. So always remember that looks can be deceiving, image and reality aren’t always the same thing, and the average corporate executive makes a lot more money than the average successful musician.

What about everyone else? Out of the remaining 99% of musicians who aren’t rich, maybe 8-10 percent manage to make a living from teaching, composing, recording and playing music. To the extent that the music business has a middle class, it is comprised of these musicians. A lot of these folks are people you’ve never heard of. They teach at schools, do studio work, jingles, play in orchestras, jazz combos, wedding bands, cover bands, and all sorts of other relatively anonymous situations.

Of course there are also quite a few familiar names in this group too: People you’ve read articles about in the press. People you’ve heard on the radio. People who might be some of your favorite artists. People you might even think of as “famous.” Indeed, the fact that some of these people are famous might lead you to believe that they make a really comfortable living too. But this is a bad assumption to make. Fame and wealth are not always the same thing.

The number of people making in excess of $90,000 a year (after expenses) from music is a lot smaller than you think. And there are some notable performers who struggle to reach even this income level. If a musician succeeds in making this kind of money, it is a lot more of an accomplishment than most people will ever realize. Indeed, if one were to reach a similar level of accomplishment in most other industries, one would probably be making 2 to 5 times as much money each year.

Other than the two groups of musicians discussed above, no other musicians make a living solely from making music. Instead, they are able to play music because they have a day job, a trust fund, supportive parents, an understanding spouse, or some other sort of subsidy. Don’t get me wrong. I’m not pointing this out to get down on the people in this group. There’s nothing wrong with being in this group. Most people in the other two groups were in this group at one time or another. And a lot of folks bounce back and forth between this group and the other two groups.

I just point this out, because I think a lot of people get confused about it. They feel bad about themselves, because they are not making a living from music. Don’t feel bad. Most people don’t make a living from music. Moreover, if you meet someone who seems like they are making a living from playing music, scrutinize them carefully (especially if they are lording it over you and making you feel bad about yourself). You may find that they are actually just giving off the illusion of making a living from music, because they think it will help them get ahead (or because they are insecure). But as I said above, appearances can be deceiving, and they usually are.

Nevertheless, if you scrutinize a fellow musician and they actually are making a living from music, give them their due. They deserve your respect. They have attained a goal most musicians never reach. If you aspire to some day make a living solely from music, they are worthy of careful study,. For they undoubtedly have some important lessons to teach you.