Nine Ways Musicians Actually Make Money Today – Rolling Stone
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Nine Ways Musicians Actually Make Money Today

With record sales plummeting to new lows, here’s how top stars are helping pay their bills

Jessica Simpson/Justin Bieber/Bono

Jamie McCarthy/WireImage for Jessica Simpson Collection; Courtesy of Warner Bros.; Hagen Hopkins/Getty Images

Over the past decade-plus, the old-fashioned way of making money in the music business – selling recorded albums – has dropped off a cliff, splintered into a zillion pieces and been run over by that methylene train from Breaking Bad. Many top stars have switched their focus to selling concert tickets; while this is a prudent plan, generally speaking, it's getting trickier now that everyone else is on the road with the same idea. But there's still money out there. Pop stars just have to be creative. "Despite the fact that the traditional ways to make money are challenged – record sales and tickets in particular – there are ways for artists to exploit their talents that didn't exist 10 years ago," says Gary Stiffelman, a veteran music-business attorney who has worked with Justin Timberlake, Eminem and Lady Gaga. What ways is he talking about? Here are nine of the best alternate revenue sources for rock stars.

By Steve Knopper

Amanda Palmer/Kickstarter

Jude Domski/Getty Images; Courtesy of Kickstarter

Kickstarter

Ex-Dresden Doll Amanda Palmer took to her favorite crowd-funding website in May, bringing in far more than she expected in pledged donations – and making her a poster child for DIY revenue. Palmer will use the cash to fund an album, art book and tour.

Potential payday: $1.2 million

Downsides: Not everyone can pull this off – beyond Palmer, the highest Kickstarter fundraising rounds for musicians have been roughly $200,000 per project. It's especially hard for artists who don't already have a built-in fanbase assembled the old-fashioned way, as Palmer did.

Karmin/YouTube

Jason LaVeris/FilmMagic; Courtesy of YouTube

YouTube

Karmin's mega-viral covers of pop and hip-hop hits racked up 178 million YouTube views as of earlier this year, giving them enough juice to sign with a major record label and start actually selling music. Once they scored a hit of their own with "Brokenhearted," the cycle began anew as other users started uploading covers and novelty versions of Karmin's song. One music-business source estimates that acts can make $1,500 per 1 million streams on YouTube this way via advertising. Top stars can make even more by signing up sponsors.

Potential payday: Hundreds of thousands

Downsides: It takes a lot of views to make a little money. And when artists opt to run ads on their YouTube clips, the industry source says they have no input into what type of ads pop up.

The String Cheese Incident

Tim Mosenfelder/Getty Images

Instant Concert Recordings

Phish, Red Hot Chili Peppers, Pearl Jam, Umphrey's McGee and the String Cheese Incident are some of the acts that sell their fans full recordings of the show they just heard. String Cheese, who charge $10 for MP3s or $15 for high-quality, lossless FLAC, sell about 500 to 1,000 downloads per gig.

Potential payday: $5,000 per show

Downsides: Overhead is high – the band has to hire a tech employee to travel to each show – and logistics can be tricky. (If the band spontaneously plays a cover song, it must get approval from the original publisher and pay royalties.) "It's definitely a good supplemental revenue stream for bands," says Kevin Morris, one of String Cheese's managers. "I don't think anybody's getting rich off recorded music in any capacity these days."

The Roots

Lloyd Bishop/NBC

Talk-Show Band

After more than a decade as one of the hardest-touring bands in the land, the Roots accepted Jimmy Fallon's offer to join him on his new Late Night show in 2009. The gig forced them to start waking up at 5 a.m. every day – but it also allowed them to jam on national TV with stars from Bruce Springsteen to Carly Rae Jepsen, and exposed them to millions of new fans. "Financially, it's a great ending," drummer Ahmir "?uestlove" Thompson told us at the time. "We get to be our own island again."

Potential payday: The exact number the Roots made is unknown, but it's probably somewhat less than the $17 or $18 million Mariah Carey is reportedly getting to judge American Idol.

Downsides: Very few of these jobs exist. You'd have better luck playing Mega Millions.

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