If you're like me, you've probably realized that it's hard to make a substantial income from any one revenue stream related to music.  Short of making it "big" in the music business, if you want to do music full time, it will most likely entail taking advantage of two or more different revenue streams, that together will add up to a full time income.

Last year was my best overall year yet financially, as a professional musician.  I don't really like to reveal exactly what my income is, for obvious reasons.  But suffice it to say it's a comfortable income that's above the U.S. national average.  Another way to put it, is that I make plenty of money to live comfortably.  The fact that I'm able to do that as a musician/entrepreneur is icing on the cake.

As I mentioned in my last blog post, as I've gotten older I've changed my approach to music and how I make money.  I used to focus solely on performing live and making and selling CDs, but completely ignored things like licensing, music downloads, youtube ad revenue and so on.   Of course, some of these methods of making money with music are relatively new and were basically non-existent when I was starting out. Over the years I've realized that to be successful in the music business you really need to adapt to how the music industry is transforming.  The business is very different than it was ten years ago and what worked then, in most cases, doesn't work well now.

One of the main realizations I've had over the last few years, is that you don't need to be wildly successful or famous to make a decent living playing music.  However, you do need to be savvy about how you approach things. 

Here's a breakdown of how I generate my income:

Performing Live-  I estimate that I made about 20% of my income last year from live performances, both by myself as a solo acoustic performer and with a band I perform in called "Spanglish".   All of these performances featured a mix of covers and originals and each performance had a "guarantee".  I don't play for the door, or pay to play, or any of the other alternative ways that musicians allow themselves to get paid.  I'm hired to pay for a fee and either the bar or venue I'm playing can guarantee this fee or they can't and I don't play there.  This limits my options of playing live in certain markets and I'm fine with that.  A lot of my live performances were actually outside of the US in vacation resort areas where there are "built in" crowds and budgets for entertainment.

Look for smaller niche markets with less competition and you're on the right track.  In every facet of the music business it comes down to supply and demand.  If you live in an area with a great, vibrant music scene that has thousands of bands, chances are you're going to make less money, at least when you're starting out.  More bands vying for the same gigs, almost always equals less money for performers. I've been able to do well by finding markets that have a demand for live music but lack on the supply side.

Licensing/Publishing-  I probably made about 30 percent of my income last year through licensing my own music and facilitating licensing/publishing deals for other artists I work with.  When I first started licensing my own music, I never imagined that I would one day be pitching other artists music and helping them secure licensing deals.  But as my website and corresponding services has grown, it feels like a natural extension.  To me, the music business is a multi faceted industry and I don't limit myself to just making money from performing my own music.  In the same way some actors are drawn towards directing or musicians are drawn towards production, in this day and age it pays to be diverse.

The great thing about developing skills in different areas and wearing a few different hats is that if you do it right, it can actually reduce your stress greatly, in the sense that you'll have multiple revenue streams to draw from.  If you see a reduction in one revenue stream you can make up for it in another.  For example, although I played a record number of live shows last year for me (about 150), I'm taking a couple month hiatus from performing to focus on working on new, original material and to pursue several new business ventures.  Since I already have multiple streams of revenue in place, I can easily make up for this loss by focusing more on other areas.

Courses, consulting, etc-  When I first started teaching people how to license music online, I looked at it as a sort of online equivalent of giving guitar lessons.  In the beginning, it was a new and novel way to make money but I was still essentially trading my time for money, albeit in a different niche.  However, my perspective has changed a lot over the last few years. 

I now look at what I do via this website, blog, podcast and so on, as an extension of what I do as a musician.  It's all connected.  I truly love helping and educating other musicians almost as much as I like playing and performing music.  As a result, I've been able to create a revenue stream that generates as much as half of my overall income and a lot of it is passive income as well.  Just like with music licensing, I'm essentially creating something once and getting paid for it over and over again.

There are a few other ways I generate money, but the above three categories are the main ones at this point. Going forward I plan to expand into a few new areas that I'm currently researching and exploring.  I don't think you're selling out by exploring alternative revenue streams, I think you're just being smart about building and creating a future that will sustain you.

Comment and see a video of me performing live here:
http://www.howtolicenseyourmusic.com/blog/multiple-streams-of-income-for-musicians

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