**Guest post written by David Priebe of Green Room Music Source, a full time agent/artist manager and also part time instructor of music business at the Institute of Production & Recording in Minneapolis.

"It official- it’s now impossible to make money in the music industry."

There are scads and scads of articles and commentary that sound a lot like that statement. What you hear much less about are the people who completely disagree with that sentiment. I’m in that camp, and I’m going to tell you why.

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When I was in high school contemplating a career in music, I would frequent the local music store and pawn shops that had guitars and dork out over the gear. Every once and a while I’d bump into this coked-out sound guy who’d lurk around the same places. He’d come out of nowhere and warn me not to get into the music business like a haggard sailor always making foreboding statements about the devilish sea. That was 1995. Being young and ambitious, I paid him no mind.

Through the years, I’ve run into many other people who have shared similar sentiments with me. Some of them veterans of the industry who got out, but most are people who tried and failed or had rather brief stays in the music business. Sometimes people who left long ago look at the way things are and wonder how people still make money. I’ve been working here and there in music since I left high school, but it wasn’t my primary source of income until after the digital revolution- so I don’t have a huge basis for comparison, but I do know I’m seeing a measure of success right now. I’ll tell you what I attribute that to- Really, it’s simple. It’s all business. Here are a few simple guidelines you can follow to stay out of trouble: Plan, expect change, and make smart decisions. (and I know how lack luster and basic that sounds, but it’s simple things like that that are behind the failure of most business regardless of industry.)

Before you look at how to make money, let’s look at the state of the industry. Is there demand and consumption of music? Yes. In fact, there’s more consumption of music now than there ever has been thanks to the ‘treacherous’ internet. But, is there still money being made? Yes. In fact, in 2012 global revenue was 16.6 billion dollars. While that’s down slightly overall, there were rises in some places in the industry such as synch revenue and even digital sales. So if the market is still demanding music and there is still a lot of money being made, then it would stand to reason that there must be a way for you to go out there and claim a piece of that pie, right?

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Shrinking revenue isn’t something encouraging to most people, especially not when you presume that means that it will continue to shrink until it reaches zero and musicians spend thousands of their own dollars to entertain as slave labor- but that’s simply not realistic. People enjoy music, and they still are willing to pay to enjoy it. However, their ideas of how to value certain products have changed to a degree.

So let’s start back at the beginning; you want to have a career in the music industry, what are you going to do to make money? …specifically that is. You want to be an artist? What’s your business plan (and a business plan doesn’t always need to be a 50 page formal document) for how you’re going to get where you want to go? If you’re internal response to those sentences is “who, what?” or “this is boring” you’re probably not going to do that well. Too many artists wait until they’ve been playing for years unsuccessfully before they start worrying about the fact that they’re not making any money, or gaining ground on their career. Then they start panicking, or conclude the industry is fixed against everyone and there was no way to win in the first place. Well… if that’s the case, it would be smart to do a little digging and figure that out before wasting all your time. Fortunately it’s not true. Bring this back to basics again for a second…

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Anyone with any kind of background in business will tell you that things changing is the fundamental constant in the business world. People who don’t expect it, predict it, anticipate and prepare for it have no control, whatsoever, over their business’s future. Music isn’t the exception, and it’s not even the poster child, it’s just an industry like any other. It’s, of course, smart to repeat successful ideas and hope for similar results, but I think it’s incredibly dangerous for rely on the repeating of ideas to bring continued success. In fact, the saying, ‘If you’re not moving forwards, you’re moving backwards,’ is more than rhetoric. The growth and expansion of a business should always be the primary goal, but it’s also the thing that keeps them from failing. This is how major labels shrank and why there are more and more successful indie labels. The former banked on owning the blueprints for how the business operated. They were so greedy that when things changed, rather than finding new avenues to replace revenue, they fought to preserve the old ones. But you can’t tame the market (at least not completely.) Indie labels have been successful because they embraced the changes, understood them, and, most importantly, built businesses that were limber and could change again quickly if needed.

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Finally, the most obvious and least recognized fundamentally good idea in music: make good decisions. People, especially musicians, can quickly get blinded by their obsession to succeed and make horrible decisions. Big and small. Once you’ve made a plan you should have short-term and long-term goals for your band, business, or career. Every single decision – every one – should be a part of reaching one of those goals. If it’s not, don’t do it. Likewise, every business takes risks, but you need to make sure you limit your expose to things that can be harmful to your goals. Look at something with a critical eye and ask how likely it is that the risk will pay off, and how big will that payoff be? If it doesn’t work out, how much will that failure damage the business?

And, if you’re thinking that all of this general information is great, but doesn’t tell you exactly how to still make money in music then you’re missing the point. If you legitimately can’t figure out a way to make money in music than you shouldn’t invest in a career here. Too many musicians think that making the music is their only job. Hopefully you’ll get to a place where that is your only job, but until then you’ll need to be a jack of several trades, including the trade of being a businessman/woman. If you don’t have any business acumen and you have no one else to rely on- then go get some. Intern with someone who does have a good grasp on those things, or go to school, or hire someone to consult with you…

The music industry has always been incredibly hard to break into at all levels. It’s a “glamour” industry. That’s one thing that isn’t likely to change. What I mean by that is there are a disproportionate number of people who want a roll in the industry just for the sake of being able to reap the rewards people expect from a business like this- fame, glory, power, bragging rights… sex, drugs, and rock and roll… And people are willing to put up with just about anything to get what they want. (But, while being persistent is great, it’s not the same thing as being smart.) This isn’t anything new at all, and it doesn’t mean the industry is in a state of collapse.

Here’s the thought I’d like to leave you with. I hear more and more about people not bothering to print CDs or even try to sell them. People are spending money to record great music and then giving it all away online as “promotion.” This is the worst idea I’ve ever come across. If you want to give away some music, do as you will- things like Spotify and Rhapsody are close enough for me. But even if you do, still leave an avenue for people to pay you if they want to. That’s the one thing that the sales numbers don’t tell you. Lady Gaga’s sales numbers from Walmart going down likely has zero relevancy for your career. There’s not much reason that your band can’t sell the same number (or more) as last year or the year before- because you’ll sell them at live shows, and the people who buy them are doing so specifically because they want to support your music. If you play shows all the time and no one ever buys anything… the state of the industry isn’t your biggest problem.

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