The Secret To Long-Term Music Business Income
Perhaps the best product is one that has recurring monthly fees. This is known as residual income, and is the best income to make, because you make one sale but are paid month after month.
Would you rather make one sale for a one-time $65, or one sale for a monthly subscription at $10 per month? I would rather have the monthly subscription, because after the seventh month I will have made more than the $65 from the first sale, and the money will keep coming! It is possible that you can still be making money three years down the road from one sale.
Here is another example to show you the power of residual income: You work everyday for a company. Your paycheck is dependent upon your working. If you don't work on a given day and you are paid hourly, you will not be paid for that day. If your job is to make widgets on an assembly line, you must make those widgets to get paid.
But what if you were the one who patented the widget? Then you would receive income over and over again any time someone made or bought one of your widgets. You donít have to make the widget anymore, but you get paid every time someone buys a widget! This is residual income: it is income that you make over and over again from working one time. There are many great affiliate programs that you can market that can bring you residual income. You can also start your own subscription or membership website.
A related concept to residual income is leveraged income. Leveraged income is similar in that it can be residual. More importantly, leveraged income is money that you make from other people's efforts!
To use the same widgets example, if you make widgets on an assembly line for your job, you have to do that to get paid. But if you were the one who patented the widget or the technology to make the widget, you would continually receive income every time someone made or bought one of your widgets.
As this related to leveraged income, imagine that in addition to you working on the assembly line, you could train others to do the same work and make a percentage of each personís income that you trained?
For example, you work the assembly line and earn $1000 each month. What if you could earn 10f the income for each person you trained to do the same assembly-line work? You would do the work (training) one time and be paid over and over again (residual income that is leveraged via other people's work).
Suppose you trained ten new people each month, for three months. Your monthly income would begin to look like this:
1st month: You make $1000 and each of the ten people you train earn $1000. In addition, you earn 10f their monthly income (10f $1000 = $100 x 10 people = $1000 your $1000 = $2000 total).
2nd month: You still make your $1000, but now you have 20 people who each make $1000. Your income is thus: 10f $1000 = $100 x 20 people = $2000 your $1000 = $3000 total).
3rd month: You still make your $1000, but now you have 30 people who each make $1000. Your income is thus: 10f $1000 = $100 x 30 people = $3000 your $1000 = $4000 total).
But wait! In your third month, 10 of the thirty that you trained each trained 5 more people. Another part of your business agreement said that you would receive 5f the income of anyone that was trained by someone you trained. So, you have 50 more people each earning $1000, and you earn 5f that --> 5f $1000 = $50 x 50 people = $2500 your month 3 total of $4000 = $6500 total in month 3!
This is the beauty of leveraged and residual income! By your one act of training someone to do the work, you will get paid over and over again from their efforts, and again if they train someone else to do the work!
This specific example may not work for where you are, but look at how acts like Kiss use it. Pretty soon, this group won't have ANY original members...they'll just put unknown musicians in makeup and send them on tour.
But you, the average musician, can make a ton of money with a newsletter of subscription site. If you've been playing for any length of time, you've probably got tons of content, whether it be songs, pictures, or even blog entries, that members will pay for. And it wouldn't be hard to get $5/month from fans to access this.
$5/month might not sound like a lot, but it's $60/year and most bands are lucky to get $20/year from a fan. That's a 300ncrease income...and just think if you charge $10/month or more.
Some of the larger acts that I work with are doing membership sites and making a killing. Why aren't you?
About the author:
David Hooper is the founder of Kathode Ray Music, an artist development organization specializing in promotion and marketing of independent musicians and bands. Visit http://WWW.GETTING-A-RECORD-DEAL.COMfor more tips and hints for musicians, bands, and songwriters.
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