Music income can be hard to depend on, so your best bet is to get direct support from your fans using tools like patronage, where you get subscription revenue every month and your fans get music and rewards.
The pandemic has taught us that much of what we rely on to fund our music business and livelihood depends on inconsistent revenue streams. COVID decimated live performance revenue, merch sales (usually driven by live shows), music instruction, and more. Inconsistent revenue streams are risky, so it’s more important than ever to create income that is consistent, recurring, and predictable.
In this multi-part series, we’ll show you how to create a steady patronage/fan-supported revenue stream that can give you peace of mind and help you cover your monthly expenses.
Membership fees make for consistent revenue
If you read Amazon’s stock disclosures, you’ll find that one of the largest sources of income is from Amazon Prime, which is a membership fee that gives free shipping and other benefits such as movies, music, and entertainment. Similarly, Costco’s major income source comes from membership fees rather than merchandise, and there are plenty of examples in the entertainment industry, such as Netflix, Hulu, Spotify, Disney Plus, and many others.
While creating and building a consistent, recurring revenue stream is a challenge for most businesses, as an independent music artist, you can create a viable subscription model and start building income using sites and services that fans are already familiar with.
Why patronage works
In the past, musicians like Bach or Mozart used to be financially supported by royalty, the church, or wealthy patrons. This income allowed them to focus on composing their music. Today, the Internet allows any fan to support you via monthly subscriptions, as long as you provide them with regular entertainment they can enjoy.
Patreon has become one of the best ways for musicians to build a subscription platform because of its robust features, services, and brand recognition. And the fans most likely to pay you every month to are probably very familiar with it.
It’s important to know why Patreon works so you can make the right decisions when you build your own subscription option.
1. Patronage provides consistent, passive income
Rather than trading your time and sweat for money, what if money flowed in no matter what you do during the day? This is called passive income. Royalties are one example of passive income. But unlike royalties, the money you get from Patreon’s monthly subscriptions is not only passive, it’s consistent. With royalties, you get paid when your music gets played by someone else, which is inconsistent. You can’t be sure how often people will play your music (unless it’s really popular, which usually requires a lot of active promotion on your part or a lot of funding to pay for promotion).
2. Fans love patronage
Many people with Patreon accounts pay more to music artists via Patreon every month than they do for Netflix. These fans believe in supporting the artists they love, and that can be you. Many of these Patreon users already have their credit cards active with Patreon, which means supporting another artist just takes a few clicks. You just need to convince them that you are worth supporting based on your music and monthly output. Entice them with the rewards they can get.
3. You decide the rewards
You get to decide what you provide fans as extras and incentives for signing up (and staying signed up). Although many fans just pay artists because they like what they put out without the promise of something extra, years of fundraisers by public television and public radio show us it’s that tote bag or branded gift that finally convinces people to donate. The best part is that you don’t need to ship anything: as a musician, you can offer digital-only rewards, like alternate versions of songs (demos, acoustic, etc.), live versions, and more. (Check out “Choosing the right rewards for patronage and crowdfunding campaigns” for more ideas.)
3. You can turn any one-time sale into a subscription
It’s great to get someone to buy a t-shirt and make $15 profit off the sale, but why not use it to convince fans to support you each month for $5? This would make you $60 a year, and you might keep them subscribed for many years if you offer the right rewards. In fact, nearly everything you sell as a one-off can be turned into an enticing lure for fans to support you via patronage with monthly installments.
4. Patronage enhances all of the other sources of income
Patronage platforms like Patreon give you a way to send messages to your patrons, which they’ll look forward to because you’re sending out rewards. It even lets you split the messages out by the level of support they give you. If you’re an artist who puts music out regularly, as we describe in the “Release Strategy” chapter of our book, Making Money With Music, you can use this platform to continue to promote what you’re releasing, including the free stuff.
5. Patronage provides stable income and predictable growth
Your base of patronage supporters can grow at a predictable rate as you continue to release material and promote your patronage platform. By creating the music and entertainment all in a batch, you can release it over months using a schedule, which gives you time to plan ahead, promote effectively, and gain more fans and patronage supporters as they get a steady stream of consistently good content from you. If you keep giving them new entertainment and promoting your work, you’ll see your patron fan base — and revenue — grow over time.
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Creating a revenue stream that is consistent and recurring should be at the forefront of any music business. Cultivating a fan base and building a subscription model takes time, but the results are consistent revenue and robust growth, which can help your music career through difficult times.
Future posts in this series will dive into creative techniques to build this revenue stream and create a solid income base for your music business.
Authors of the critically-acclaimed modern classic, The Indie Band Survival Guide, Billboard Magazine called Randy Chertkow and Jason Feehan “the ideal mentors for aspiring indie musicians who want to navigate an ever-changing music industry.” Their latest book, Making Money With Music (Macmillan) and free Making Money With Music Newsletter, help all musicians — from startups to pros — build a sustainable music business so you can make money in today’s tech-driven music environment.
Choosing the right rewards for patronage and crowdfunding campaigns
You can’t make money if you can’t take money: How to take payments as a musician
Perfect your sales pitch if you want results
How to turn music royalties into a cash advance
New music royalties: The Mechanical Licensing Collective and what it means for you