Perhaps you’re starting back up as a musician after a pandemic hiatus. Maybe you’ve decided now is the time to finally take the plunge and turn your musical interests into a career. In any case, one of the most important things you can do as a musician is to create a budget for your musical activities.
A music marketing budget will help to create a clear roadmap of your financial goals, how you’ll reach them, and help you to monitor your progress along the way.
The idea of setting up a budget might make you want to drift off to the practice room instead. So we’ve broken down the process into four easy steps. Let’s get started:
1. Ask questions
To help determine what your financial goals for the next year will be, ask yourself the following questions. These will help you establish an idea of the costs to market your music.
- Will you be releasing new music this year?
- How do you plan to pay for the cost of production?
- How will you distribute your music to digital stores?
- How will you promote your music?
- Do you need new band photos for press?
- Do you plan on printing or manufacturing new merch?
- Are you going to buy any new equipment?
- Do you need a new website?
Write down the answers to each question above to give you some direction and focus. Be as specific as you possibly can, to create clear projections and bring your budget to life.
2. Determine expenses
Once you’ve established your goals, outline the actual expenses associated with those goals that you’d like to accomplish.
Costs of music and merch production
Recording, mixing, and mastering: Many musicians now record at home rather than at a recording studio, so recording expenses can vary greatly depending on your approach. Figure out how many songs you’d like to record for release this year, and the associated costs. You can factor in the depreciation costs of purchasing or updating software here if you’re self-produced.
CD duplication and vinyl pressing: Research how much it will cost to manufacture physical versions of your planned releases at various unit totals.
Digital distribution: There is either an upfront cost or recurring annual cost to distribute your music to streaming platforms. If you plan to release your music in this way, factor the cost into your budget accordingly.
Merch: If you plan to produce t-shirts and other merchandise for sale, estimate the costs. You may opt to use a print-on-demand service such as Printful to cut down on upfront costs for merch.
Rehearsal space: If you plan to play live shows, you may need to rent time at a rehearsal space. Research the general pricing at nearby studios to give you an idea if you don’t already know this cost.
Equipment: Determine if you’ll need to replace or purchase any new instruments, amps, pedals, accessories, or software this year.
Musicians: If you’re a solo artist and need to hire a band, or require additional musicians to round out your band’s line-up when performing live, factor in those fees here.
Crew: Do you need to hire a merch person or outside sound engineer when playing locally? What about on tour? Will you need to hire a dedicated driver or tour manager?
Food and gas: Whether you’re on tour or not, you’ll need to consider local travel and eating expenses as well.
Metro: If you live in the city, calculate the cost of public transportation to and from gigs, as well as rehearsals.
Lodging: If you’re touring, will you be staying at hotels or Airbnbs? If your budget is tight, look to save on funds by staying with family, friends, or personal contacts whenever possible.
Gym memberships: Many touring bands use the gym as a hub for showering and getting in that pre-show workout. If you’re touring in a vehicle that supports sleep, the gym can provide a cheap alternative to hotels. Some gyms offer memberships valid in any location, so if you’re already a member, you’re guaranteed a shower wherever you go.
Conference and festival fees: If you are applying to perform at any conferences or festivals, there is often a fee to apply. For some conferences, even if you’re accepted to showcase, it still costs money to attend.
Covid tests: In the current day and age, there may be associated fees for rapid Covid tests if you are travelling internationally, so make sure you research where you’ll be playing and what the requirements are.
Publicity and promotion
Graphic design: Some bands are fortunate to have a member that is a skilled graphic designer. If not, you may have to hire a professional graphic designer to handle your album artwork, and any images you need for your website and social media profiles.
Photo shoots: We can’t stress enough how important it is to have high caliber photos, especially for your website and EPK. If you are releasing new music, plan to include some new band photos in your budget as well.
Posters, flyers, and postage: Will you need any printed promotional assets, like posters? If you have set up a crowdfunding campaign or fan subscriptions, factor in the cost of mailing any rewards.
Publicity: If you hire a publicist to help with the launch and promotion of a new release or tour, factor in that cost to your music marketing plan.
Website: Making a website for your music is essential, but shouldn’t break the bank. You can design a custom site to help sell music and merch, collect email addresses, run fan subscriptions, and more. If you decide to build a Bandzoogle website there are three price plans to choose from.
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Mailing list: Email blasts are still the most effective way to convert fans into paying customers. Most email services charge a monthly fee (which you can eliminate if you use your Bandzoogle website’s mailing list tool).
Videos: Making a music video for new releases is basically imperative these days. You should also consider smaller budget videos like lyric videos, live streams, and shorter videos to promote an upcoming performance or tour. Decide how many videos and how much you’ll spend, then add these costs into your budget.
Ads: Will you be buying any online ads or targeting music fans through paid social media posts to help promote your music, live shows, or latest video?
Having tangible projections will help you to realistically achieve your goals. Budget for the “worst,” but plan for the “best.” It’s better to over budget and come in under, than fail to allocate the proper resources and come up short.
3. Project your income
Now the fun part—projecting your income! Do your best to estimate how much income you’ll be bringing in over the course of the next year to balance out your expenses. This will show you what you’ll need to either source from outside, stake yourself or cut back on in the budget.
There are lots of ways for musicians to make money, some of which may work for you. Be realistic about your time and ability when trying to estimate what kind of income you’ll bring in.
CD sales: If you’re going to be playing live shows, having CDs on hand is still a good idea. They make great takeaway souvenirs that can easily be signed by band members.
Vinyl sales: If you’ll be playing live shows, selling vinyl at the merch table can help generate income. You can also sell Vinyl through your website.
Digital sales: You should be selling digital music online with your website to make the most money, but also through online retailers. Keep in mind for your budget that online retailers take a percentage of sales in exchange for listing your music.
Streaming revenue: Although per-stream payouts from streaming services can be rather small, they can add up over time. If you’re unsigned, chances are you’ll be seeing more of this revenue than others. Use past numbers to predict trends and estimate your earnings for the year; and feel free to set new targets.
Publishing royalties: Your PRO (performing rights organization) will collect royalties on your music, including public performance royalties (radio, TV, live venues), mechanical royalties (sales through retailers, streaming, etc.), and sync royalties (commercials, film, TV). Whenever you play your music live, submit a copy of the setlist to your PRO and receive royalties for your own performances.
Digital royalties: Whenever your music is played on services like SiriusXM radio or Pandora, those webcasters must pay royalties. You should sign up for a free SoundExchange account to make sure you’re getting those royalties.
Licensing: If you get your song placed in a film, commercial, or TV show, they must pay you a licensing fee. These fees depend largely on the budget for the project, type of use, and demand for your song. This income can be difficult to predict without offers on the table, so don’t count on it until you have the cash in hand.
YouTube: On YouTube, whenever your music is used in videos that are running ads, YouTube pays a portion of that advertising money to the rights holders of the song. This includes videos on your YouTube channel, as well as videos that are not on your channel but are using your music in the background. A digital distributor can help you monetize your music when your songs are used in videos.
Money made from live shows can vary greatly. Performing live is still the best way for an artist to earn income, sell merch, and connect with fans - so while it may be a bit of an estimate, factor in live show income to your budget.
Ticket sales and guarantees: Whether at home or on tour, if a venue or promoter is profiting from your performance, you should be too. If the show is being run by an outside promoter, your agreement will usually be handled by the production company. If the venue itself booked you, you’ll need to discuss the splits with your point person there. Many talent buyers offer splits over a certain number of tickets sold for local shows, while venues that book touring bands are often open to offering guarantees, leveraged against the projected sales and popularity of your band in that market.
Merch: Physical merchandise accounts for the largest portion of most artists' revenue. T-shirts, hats, posters, and miscellaneous goodies like stickers and buttons are a must. For more tips about merch, read: The Ultimate Guide to Selling Band Merch Online.
Show day meals or buyouts: Don’t forget to factor in daytime meals you may receive from the venue or promoter as possible recoupment against your expenses. Buyouts range from $10-$30 per band or crew member and are often provided by the venue if catering is not. You need to clarify this in your advance.
VIP experiences: Many bands and artists offer some type of VIP experience for fans that pay extra for a more exclusive treatment. These types of experiences can cost $50-$1,000+ in addition to the ticket price of your show. Some examples might be having drinks or dinner before the show with the band, an intimate and private acoustic performance, or a meet-and-greet including a photo op and bundle of personalized merch.
Crowdfunding: A crowdfunding campaign can help generate enough money to offset the cost of producing your album or merchandise. Just make sure to factor in any additional costs that the campaign itself may create, and estimate your target goal as accurately as possible.
Fan subscriptions: If you’re an artist with an established fanbase, offering fan subscriptions on a monthly basis is a great way to generate steady income. It also compels you to create consistent, quality content, so determine how much you’ll spend, and how many subscribers you would like to attain.
Teaching: Many musicians now use Zoom to teach lessons to students all around the world. This can be a great way of not only generating extra revenue, but deepening your engagement with fans. If your music appeals to other musicians, holding clinics while on tour can also help generate some additional income.
4. Track your budget
Finally, you’ll want to track your budget as the year progresses. Create a spreadsheet that lists all of your expenses and income projections. You can use a Google Spreadsheet or Doc, Apple Numbers or Pages, OpenOffice, or Microsoft Excel to do this.
Make sure to create two columns, one for projections, and one for the actual results. This way you can adjust accordingly throughout the year, and there’s an extra bonus too; you can use the same spreadsheet while preparing your incomes and expenses for your taxes!
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