Music Business Archives ⋆ Stock Music Musician

Category Archives for "Music Business"

How Long Did it Take Me to Earn $10k Licensing My Music?

I wanted to talk to you a little bit about what it took for me to earn my first ten thousand dollars licensing my music. So the first thing I need to clarify is what I mean by music licensing and what I have done to earn most of this ten thousand dollars is write stock music.

What is stock music?

What is stock music? Stock music is where you write a song without any potential buyers in mind. So you go ahead and you write a generic hip hop song or you write a cool, fast-paced rock song. Then you go to various websites and you put these songs on their shelves and potential buyers can go and license them in a really simple way. And then another licensee can come by and license the same song.

You keep licensing the same songs over and over again!

As I’ve mentioned, some of my best selling songs have earned hundreds and hundreds of dollars from repeat licensing so that’s sort of the overview of what I do.

If you want to learn how to actually do this yourself, I made a free five-day course. It’s totally free to check out. It talks you through all the major things you need to know to get started today.

And it’s laser focused.

It’s designed to weed out all the extraneous noise and it will give you a path to get started. And then you can educate yourself over time as you go down the path.

Focusing is the key to music licensing success

For me, the hardest thing was figuring out what the path even to walk down. I got distracted by all sorts of different routes. Should I focus on personal music? More exclusive music licensing? Should I go write for people and try and pitch songs?

And for me, ultimately what I found was that stock music licensing worked best most of the time.

My Music Licensing Journey

So getting back to how I made ten thousand dollars. Well, in my first year, I probably made about four hundred dollars. These numbers are gonna be pretty approximate since this was 2015.

I had actually tried starting way before then, but I kept on getting my songs rejected.

Sad face

I didn’t know what I was doing. So I was failing and flailing.

I spent about six or eight months not accomplishing anything. . . uploading a couple of songs and getting rejected and then getting dejected and not making songs and then sort of just kind of slowly started to figure it out on my own over time.

By the way, most  of  these  sales started to come through Pond 5.

I probably made my first real sale in April 2015 and then you know, it took another month and I didn’t get a sale.

And then in June, I got two or three sales and then maybe another month without a sale and then four or five sales and it sort of started building up to fifty dollars a month.

I probably didn’t make more than fifty dollars a month from licensing my music in 2015, but I was starting to see it consistently come in. Then in 2016, I probably made a couple of thousand dollars.

How Things Started to Snowball

This was largely just from doing the same thing, by growing my catalog, getting better at writing songs, getting better at tagging songs, getting more efficient at uploading songs, and just getting better as a producer.

Which is a huge thing. It’s just the knowledge/experience that is really important in this, but the practice is also huge. You just have to keep doing it, which is why you should start today. That’s why you should go check out that free course so you can start getting those hours in and improving.

Groweth

So I probably made about two thousand dollars in 2017 and something really exciting happened at the end of that year.

I got some songs into an exclusive library! Basically, instead of me writing songs and putting them up on the shelf and hoping a buyer comes by at a generic grocery store, some boutique grocery store comes along and says, “Hey, we’re gonna pay you a few hundred dollars a song and we want to get some custom unique exclusive products and we want to put them on our shelves and not sell them anywhere else.”

So I got a pretty nice payout from that, it was like eight hundred bucks or something up front. That was on top of the other couple thousand dollars… maybe three thousand dollars I made.

So, I probably made one thousand in 2015. I probably made about three thousand in 2016.

In 2017, I made about three thousand and plus I made another eight hundred dollars or so from the exclusive libraries upfront fees.

2018 – The Big  Break!

Then, in 2018, I made around five thousand dollars and about three thousand of this was from stock music licensing and another two thousand was from “back end” royalties from the songs that I licensed that I’d sold the year before. So there are sort of rolling levels of payments. So you know the more songs you sell, the more opportunities you have to back in royalties, but those lag a long way.

And so now here we are in 2019,you know, I’ve made a couple of thousand dollars or so… so far this year and things are just chugging along. I’ve got some really exciting irons in the fire. I’m kind of trying to mix things up a bit to keep things fresh.

However,  I know that the journey into ten thousand dollars could have been WAY faster if somebody just pointed me in the direction of what to do.

I also think that I would have been there way faster if I didn’t have a good day job. That’s a big part of it: I kind of have the golden handcuffs where I have an enjoyable, rewarding, interesting job that I like and so I’m not desperately running away from it.

And so, even when I’m making music, I’m not doing it most of the time purely for profit. I’m doing it because it’s my time off and I enjoy making music. So, if I were like laser-focused on writing the most licensable types of songs, I think I would be making a lot more money at it because my songs would just be better suited for the industry. Instead, I kind of write the songs that I want to write and then tweak them so that they fit more in the mold of stock music licensing.

Please leave any comments down below with any questions you have.

Tips to Launch Your Music Career Interview w/ Bree Noble

A music career is about so much more than just talent and songwriting. It requires save, hustle, and a business mindset. That’s why I wanted to interview one of the top music career coaches out there, Bree Noble.

Bree Noble is more than just a successful musician, she’s helped thousands of musicians learn how to take control of their music careers. Her website is is chock full of great tips for becoming a profitable musician.

She is especially focused on the struggles that female musicians face building, and launching their musical careers.

Her career advice for musicians boils down to this: musicians need to think of themselves as entrepreneurs and act accordingly. Our 20 minute interview offers lots of actionable tips on how every musician can take control of their music business to live a fulfilling, creative life. She also has a fantastic book, The Musician’s Profit Path (affiliate link), that offers even more tips on profiting from your music.

Why Music Licensing Is Hard

Why Music Licensing Is Hard

Why It’s Hard

Being successful at licensing your music it tough, in part because you have to master multiple, distinct skill sets. You’ve got to be able to write good songs, perform them well, be good at recording and mixing, and you’ve got to understand the business back end. And you’ve got to be able to do all of this quickly and repeatedly to license your music.Now back in “golden age” of the music industry, all of these functions were completely split up. You’d have song writers in the Brill Building. Celebrity singers paired with professional backing bands. An army of audio engineers to make a recording. Then a team of marketers to sell the product and a manager to crack the whip and keep the whole thing running smoothly.Not anymore.While the digital revolution is incredibly liberating, it also throws all of these difficult tasks AT YOU. The economics of the stock music game don’t allow you to hire people to do these tasks when you’re starting out (and probably not ever).By the way – if you want to learn how to start licensing your music, I’ve got a free five day crash course for you right here.

Assess Your Skills

To grow your music licensing career, you need to be honest about which of these skills you’re good at, and which need more work. And then you need to invest your time and money in getting better at those skills that you’re weakest at. Don’t try to get really good at one or two until you’re proficient in all of them. That’s a recipe for disaster.Just imagine the most beautifully written song terribly performed with wrong notes and flubs. Or the most high definition recording of a fart.Asses your skills – honestly.

What Can Help

If you want to improve at songwriting you could check out the book “Hit Happens.” It uses country music as its examples, but trust me when I say that Nashville is a finely oiled songwriting machine and EVERYONE should be learning how they do it.  When it comes to being better as a performer, you may want to take lessons with a local teacher. Or just practice your scales. Having the fundamentals down will save you literally weeks of time by capturing your recordings in fewer takes. And if you’re a guitar player, you’ve got to use the exercises in “Fretboard Logic.” Not only will the drills make you way better of a player, but the approach to chords and scales in brilliant and will save you so much time in figuring out how to arrange your songs. If you need to learn how to record/mix and you’re a relative novice or intermediate producer, you’ve got to check out Graham Cochrane’s Recording Revolution courses. They taught me how to systemize my mixing and saved me years in figuring it out on my own.

If you’re looking to master the business end of things, where to upload your songs, how to make sure they get found, how to get paid for your royalties, etc., then I’ll humbly recommend my course. It will teach you everything you need to know to set yourself up for a successful side hustle in music licensing. Regardless, don’t be frustrated. I’m still way stronger as a writer and business person than I am as a performer and producer. But I am working hard at improving, taking courses, and practicing. And I can absolutely hear the difference! So be patient and believe in yourself – if this is what you want, you can make it happen.

Taxes for Musicians

Taxes for Musicians – Top Musician Tax Deductions in the U.S.

Taxes for Musicians (Top Musician Tax Deductions in the U.S.A.)

Despite everything you may hear about the death of the music industry, there's still a huge need to pay taxes for musicians. Most people with day jobs receive a W2 tax form from their employers, and their taxes are pretty straight forward. But working musicians like us also get our income reported through a Form 1099.

Basically, you pay independent contractor taxes for the music work you do.

This article will focus on the three major areas of taxes for musicians: basic background information, bookkeeping for musicians, and the top musician tax deductions. And all of this is only for American musicians. I literally have no idea about any other country, so if you're not from the U.S., you may want to find help elsewhere. 

All tax payers are required to pay three different taxes to the IRS - FICA Social Security, FICA Medicare, and Income tax. The two FICA taxes are non-negotiable - all tax payers everywhere pay 15.3% of their income into FICA.

If you're an employee, your employer covers half of that 15.3% as a benefit to you, and you pay the other half out of your paycheck.

But if you're self-employed - or in other words, a freelancer or a contractor - you are responsible for paying the entire 15.3% yourself.

This is separate from income tax, and it gets added onto your 1040 as "Self-Employment Tax." 

But first, two big disclaimers. Now before we go any further, I need to state that I AM NOT AN ACCOUNTANT and I'm not in anyway qualified to give tax advice. You'd be an idiot to trust me (a musician!) with your tax tips and you should independently confirm things. Second, this article may include affiliate links which generate a commission for clicking through them. However, this does not bias my opinion. 

1099 For Musicians & Filing Taxes

A Form 1099 for musicians is basically the way all independent contractor taxes are reported. This is how the IRS knows that you need to pay taxes for musicians... 

...usually. 

Theoretically, before working with a client, you fill out a W-9 form with your tax information.  For example, if you're playing a legit gig. Or if you're licensing your music through Pond 5, they make you fill out some info.

The form 1099 is how all income for contractors is recorded. If a company pays you more than $600, they are required to issue you a 1099 to reflect that income. They'll ask you to fill out a form called a W-9 - this form collects all the contact information needed to issue your 1099 at tax time. The W-9 can be downloaded from the IRS's website (link) and the information includes name, address, and tax ID number (social security number or EIN). When you go into business, it's a best practice to fill out and sign a W-9 and keep it readily available for anyone who asks.

What is a 1099?

According to the IRS, a 1099 is used to:

... payments made in the course of a trade or business to a person who's not an employee or to an unincorporated business. Report payments of $10 or more in gross royalties or $600 or more in rents or compensation. Report payment information to the IRS and the person or business that received the payment.

After the end of the year, you'll start to receive copies of the 1099 forms from the folks you've worked for the previous year. You'll then use these to enter your 1099 income when filing your taxes. 

However, I should note that even if you don't receive a 1099, you're supposed to report all of your income (and pay taxes on it). I know plenty of times where people think they don't need to pay taxes as musicians, but if you're getting paid under the table for a gig, you should still be tracking and reporting that income.

And yea, that means you need to pay taxes on merch sold at gigs (and this probably also sales tax implications, but that's beyond the scope of today's post). 

Update: I've actually switched to using an experienced business accountant, Stephanie, who is ALSO a musician. She gets it, is really easy to work with, and charges comparable rates to TurboTax. You can find her firm, Tax Co Solutions, here.

In the past, I've used TurboTax , and it worked well for me, especially when I just had a little bit of side income coming in. I found it really straightforward. It asks all the right questions and helps you through all the various deductions you can take. TurboTax will automatically calculate things like depreciation, and it will carry them over from year to year.

Bookkeeping for Musicians

Bookkeeping for Musicians

If you've got taxes to pay, you need to keep track of your income and expenses. Bookkeeping for musicians is essential to make sure you don't miss anything along the way, and will save you countless hours of time during tax season. 

I use Mint.com (totally free) to keep my books and to track all of my expenses and income. Every weekend I go through the transactions for the past week. 

The main thing to worry about when keeping books as a musician is to make sure you use clear, consistent tags and descriptions for your transactions. That way, at the end of the year you'll quickly be able to find your relevant transactions. You'll also no what they were. So if you bought gear on Amazon, you don't want just a $30 charge to Amazon, you want to add a description, like "A 5 Pack of New Strings."

But honestly, bookkeeping for musicians isn't too much more complicated than your regular day-to-day budgeting. Just be consistent about categorizing expenses, and let Mint's free automation track and record everything.

And save your receipts!

Top Musician Tax Deductions

Tax Deductions for Musicians

This isn't an exhaustive list of all tax deductible items, by any means, but these are the top five tax deductions for musicians. As a performer or recording artist, you can use each of these tax deductions to reduce your taxable income. You can use these deductions to offset your 1099 income, so that you have to pay little to no taxes on your side hustle income!

The important thing is to become aware of all of the possible tax deductible items as soon as possible so you that you keep track of them all year long. That's why bookkeeping is so important for musicians. 

Is Your Music Income a Hobby or a Business? 

Here's a big, smelly caveat: you're only eligible for these deductions if you're trying to run a business.

If music is just a hobby and you only get the occasional cheque, you may not be eligible for it. 

The basic rule is this: if you're honestly TRYING to make a profit, even if you're failing, you probably can make take these deductions.

For example, in 2014, the United States Tax Court issued its decision in favor of artist Susan Crile, and found that she had indeed “met her burden of proving that in carrying on her activity as an artist, she had an actual and a honest objective of making a profit." 

CD Baby has a great in-depth discussion about what it means to be a professional musician here.

Can I Deduct Musical Equipment?

You're probably wondering, can I deduct musical equipment from my income.

Hell yes!

You can deduct all of your musical gear, your plugins, software, all that good stuff. There is almost no limit to the type of tax deductible items that you can use - basically, if Guitar Center sells it, you're probably good. Not only is it great that you can deduct your musical equipment (which can save tons of money), but it also makes you feel ever so slightly less guilty about being a gear slut.

You can also deduct the cost of servicing your equipment, so if you get something repaired, or if you get your guitar setup, then boom. Deduction. 

Educational Expenses

Educational expenses that help you advance your career are all valid deduction with taxes for musicians. So whether you're buying a book like How to Make it in the New Music Industry, joining a course on how to license your music like mine, or subscribing to a music magazine, these are all valid educational expenses.

On top of that, you can also deduct that cost of concert tickets - you're keeping up with industry trends after all! 

Working musicians can deduct gear, Spotify subscriptions, and even concert tickets from their taxes! #musician #sidehustle #taxes



Click to Tweet

Your Studio Space

One of the biggest perks to the deductions you can take on your taxes as a musician is the space your studio takes up in your home. Or your rehearsal room. Plus you can also deduct that utilities, insurance, etc. associated with the space. 

The main rule is that the space needs to be used exclusively for a business purpose (so no man caves). But if 25% of home is taken up by your studio, then you can deduct 25% of your water bill, for example

Transportation & Mileage Deduction

Within reason, musicians can also deduct transportation and mileage from their taxes when they are traveling for a business purpose. So let's say your driving to a gig that's 10 miles away. Well you look up the mileage deduction and boom. 

Or if you're flying to a conference or a gig or a recording session. Just, as always, be sure to maintain all documents. 

Retirement Savings

If you're getting all of your money through 1099s, whether because you're a full time self-employed musician or a musician/freelancer as a lot of creative folks are, if you save for retirement in a qualified account, you can deduct those savings. 

It's not my place to say whether a SEP IRA, a solo 401K, or Roth IRA might be best for you - it will depend on your personal situation. I use Betterment to invest my money, though. It's got low fees, broad exposure to diverse funds, and is super simple to use. 

A List of The Best Tax Deductions for Musicians

  • Musical equipment
  • Music software
  • Maintenance and repairs
  • Subscriptions to educational course & books
  • Subscriptions to music services like Spotify
  • Concert tickets
  • Advertising and promotional material
  • Travel to gigs and potentially food and drink
  • Studio/Rehearsal space
  • Lessons
  • Retirement savings