How EDM Artists Actually Make Their Money

Posted at January 11th, 2016 | by Sidhantha Jain | in

Not a single day passes by when we curse our monotonous jobs and envy dance music pioneers for their talent, crazy lifestyle, also the huge paychecks they cash in. Now, we already know EDM is going bigger than any musical genre on the planet in terms of popularity and sales combined together.

While piracy has killed some of the actual earnings of both promoters and artists, EDM is still a super profitable business and we list out some of the major ways through which our favorite DJs/Producers make the top dollar.

Music Sales

As said earlier, earning money by selling music isn’t as lucrative as it used to be in the days of CDs, Cassettes and Vinyl’s. Even though these platforms still exist, but digital downloads have taken over. Earnings hugely depend on the terms of contract, reach of the artist and more importantly ownership of the label; releases on their own brand fetch more chips than the other way round. Online retailers such as iTunes and Beatport charge a specific percentage of commission. With hybrid platforms like Spotify, Apple Music, Gaana.com, Saavn etc. gaining prominence, artists are switching from traditional ways of delivering material to their fans.

Producing As Featured Artists

It’s no secret, EDM producers have been regularly working with some of the most popular singers like Lady Gaga, Snoop Dogg, Coldplay and more. The spectrum of Zedd, Calvin Harris, David Guetta and Avicii are hot favorites in the pop world, racking in millions and multiplying the amount manifolds if it’s a single and more if it turns out to be hit! Not to forget, it takes their name into the commercial reach and gain massive following.

DJ Gigs

Performers release an album, tour the world scoring six-figure deals. Sounds simple ehh? However, it’s not so. First, coming up with fresh music isn’t that easy and even if you manufacture some infectious beats, it’s not confirmed that you’ll be playing at Tomorrowland or Ultra right away.  Commanding the income stated above is easy when you’re a big-name, in high demand and willing to fly every other night from one continent to another. Per show income depends on your credibility, social media presence and somewhat on your DJ Mag rankings (sadly).

As per a post by youredm.com on 22nd January 2015 it costs this much to book famous DJs:

  • Calvin Harris: $350,000 – $550,000
  • David Guetta: $350,000
  • Tiësto: $350,000
  • Hardwell: $100,000 +
  • Martin Garrix: $100,000
  • Afrojack: $50,000 – $100,000
  • Armin van Buuren: $50,000 – $100,000
  • Oliver Heldens: $10,000 – $30,000

Royalties

Top stars get publishing royalties when they’re signed up to performing rights organizations which include radio airings, TV features, and live performances. Mechanical royalties are paid to songwriters and artists when music is licensed but also when music is streamed “on-demand” services like Beats Radio. The rates are set by government through what’s called a compulsory license. With a master recording copyright, a record label seeks to collect royalties from the use of a specific recording of a song. Master royalties are typically paid in addition to synchronization or public performance royalties, as royalties paid to the publisher only grant the rights to the use of a song, not a specific recording of a song.

Radio stations do not typically pay master royalties, as radio play has traditionally been viewed as free advertisement for a recording. However, radio play may or may not have a positive impact on sales.

Fashion Merchandise

Music fans are crazy and they pay exorbitant moneys to get their hands on their favorite artist merchandise. At a concert, the major source of revenue is from selling tickets, but it’s also one of the finest places to market some collectible stuff. Almost all top DJs have their own fashion lines selling everything from jackets, snapbacks to stickers! We all would agree with the fact that this stuff is overpriced. But hey, the money you save by downloading the album illegally, needs to be recouped some way or the other! Proceeds from physical merch vary with the number of live shows and the marketing efforts. Digital memorabilia also sell but suffer from the same problem as the sale of music.

Club Residencies

Every now and then, we come across news stating artists like Calvin Harris charging up to $400,000 per gig at his Vegas residency!   Residency simply is the definition of employment status for a DJ, where you perform at a specific venue on contractual basis. Guest DJs are brought in for a particular duration and paid per gig or pre-determined conditions. If you’re a resident DJ like Tiesto, Armin or Deadmau5 you’re earning millions of dollars off a single deal, doing nothing but what you love! *jealous*

Endorsements

Just like Bollywood actors, EDM celebrities have monstrous following. Luminaries like Tiesto, Daft Punk, Steve Aoki etc. have been endorsed by A-Class brands to promote their products, like Calvin Harris is the face of Emporio Armani and Diplo has been a former Blackberry Boy, receiving more than just generous amounts of cash.

Record Label Boss

It doesn’t matter how awesome your project is, it’s all in vain if you can’t reach out to your fans! That’s where a record label comes into play. There work isn’t only limited to releasing music but spreading the word, cover art, music videos, everything’s a package deal. Turnover is small initially, but when you’ve got an insane track like “Lean On,” tallying thousands of views daily on your YouTube channel, you’ve hit the jackpot! *Ka-ching*

Starting a successful label similar to Hardwell, Diplo or Nicky Romero isn’t a cake walk, howbeit, artists like Martin Garrix aren’t left with a choice when their efforts are taken down and they don’t have independent rights.

Licensing/Publishing

If you score a deal, featuring your tune in a TV commercial, on movie soundtracks or video games there’s a huge possibility that’ll stack in more than just tremendous amounts of monetary benefits. Game makers follow aggressive marketing, taking EDM tracks to nerds and to a wider scope, an artist would normally be able to. And, if a song placed in a film, TV show or an advertisement, chances are you’ll end up receiving colossal licensing fees!

YouTube

In today’s world, videos and presence on YouTube is as important as your music. Even if PSY’s “Gangnam Style” didn’t sell on iTunes, he made monumental sums of money through views on his wacky dance music video. As you already know, YouTube pays a fixed chunk advertising revenue it obtains from running ads on videos and with its premium offering available to watchers, they provide with better rewards. Beyond that, covers/remixes of famous songs lead to extreme exposure and a potential deal with a major record label! Major Lazer’s “Be Together” rose to fame when trap expert Vanic released its remix, getting featured on multiple records, newsletters and channels! Now, Major Lazer might have reached to a tad more of population, but Vanic ended up claiming nothing less than a newcomer would expect. The money varies directly with the number of subscribers, ads deal, sponsorships and views (obviously).

Sidhantha Jain

I love EDM, it loves me back. It pays for my food bills.

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