How independent artists create a successful business around their music

Mapping out business models for every stage of an artist's career, from early days to fully blown up.

Anees is one of many artists who have reached sustainable success (3M Spotify monthly listeners) as a fully independent artist.

The traditional business model of the music industry as it stands right now… sucks for artists. It’s a big reason why many artists are going independent (like Anees) and winning big. But how are independent artists building lean and successful companies around their music?

If we treat artists’ and their careers as companies (which they are), here’s the economics detailing how an independent artist can build a sustainable business model across stages of funding.

Stages of an artist: pre-pre-seed to IPO

Pre-pre-seed: 5k Spotify monthly listeners (no profit)

Pre-seed: 50k Spotify monthly listeners (no profit)

Seed: 150k Spotify monthly listeners (no profit)

~Paywalled community of 100 core members that each pay $5/month

Series A: 1mill Spotify monthly listeners

• 1.5mill monthly streams a month - $6k/month (assuming artist takes 50%) —$36k

• 1 merch drop every year - $20 profit per piece — $8k

• 2 brand deals on all social media platforms - 3k per video, 5 videos per deal — $30k

• AdSense from community built on YouTube + Twitch: $50k

• touring - $1500 per show (15 shows) - $11k a year for two years

• Paywalled community - 750 core members that each pay $5/month - $45k

Profit - 179k/year pre taxes

Series B: 3mill Spotify monthly listeners

• 5mill monthly streams a month - $20k/month (assuming artist takes 50%) - $120k

• 1 merch drop every year — $20 profit per piece — $20k

• brand deals/CMO work on all social media platforms — $80k

• AdSense from community built on YouTube + Twitch: $100k

• touring: $2500 per show (30 shows) - $37.5k a year for two years

• Paywalled community - 2000 core members that each pay $5/month - $120k

Profit - 597.5k/year pre taxes (aka you and your manager are making decent money)

Series C: ~6mill listeners

Profit - 1M/year pre taxes

IPO: ~9-10 mill listeners

Profit - 2M/year pre taxes

Overall notes and summary

Under this model:

• Streaming maintains a consistent 20% of revenue across all rounds. If an artist owns 75% of their discography, this goes up to 25%.

• Community based revenue streams from YouTube, Twitch, and a custom paywalled community make up 50% of revenue streams.

• As short form content becomes monetizable (Youtube Shorts is piloting this feature this year), expect pay from song usage to add at least 20% to total revenue across all rounds.

• Brand deals are via YouTube and make anywhere from 12.5% to 20% of revenue. This number of course can vary based on how much an artist dedicates time to YouTube.

• This model is sustainable with a lean team: the artist (the CEO), the manager (COO), the lawyer, the content team (1-2 people), and a merchandise contractor.

  • Each one of these roles can (and should be) contracted to reduce worry of a payroll.

  • Success of independent artists has proven the marketing teams of record labels are unessential.

So how should artists divvy up their time? This model suggests that artists should spend their 9-5 workday making the best music possible and building community via long-form content around their music. Of course, there’s many ways to build a business, and only time will tell if this model will last before the next wave of content creation hits us.