In 2011, Taylor Swift made $57 million, Rihanna made $53 million and Kenny Chesney made $44 million, Forbes magazine estimates.
That's more than almost anyone else in the entertainment industry.
Meanwhile, the Future of Music Coalition found that musicians made an average of about $34,000 off their music in America, before deducting expenses from touring and recording, while the music media tolled the same old bell of doom about the state of the music industry.
What gives? It's tempting to chalk the difference up to disparities in record sales -- some musicians have always gotten huge while their peers languished in obscurity. But even top artists are selling far fewer records than they used to. Total North American sales of recorded music fell 36 percent between 2007 and 2011 alone, according to a recent report by PwC. And it's clear that digital music sales haven't yet made up for lost physical sales, and won't anytime soon.
"It wasn't that long ago that we were getting $3 million as an advance for the record. That's way over -- those deals don't exist," entertainment lawyer Dina LaPolt told The Huffington Post.
Today, according to industry experts, the only way to make money in the music business is to turn an artist into a brand -- then do everything in your power to maximize that brand's value.
The first step on this path still involves music. Songs make an artist famous in the first place, and allow the artist to define his or her brand. Touring can also be lucrative; spending on concerts in North American surpassed spending on recorded music in 2009, and stood at $9.5 billion in 2011, up almost 20 percent from four years before. But tours are also expensive to produce, so they aren't necessarily as profitable for the artist as they initially appear. For that reason, artists have gotten increasingly creative with their business ventures.
"Ten years ago, if you had a hit song on the radio, and you had a great tour, then you'd sell a million records, two million records. That's not necessarily the case anymore. But today, if you have a hit song and you have a sold-out tour, then other ancillary opportunities are available to you: sponsorships, endorsements, TV, movie, animated features … all different types of things," LaPolt said. "Recording an album really has become like a promotional tool."
So once an artist becomes popular through music, the four members of his or her management team (agent, manager, lawyer, business manager) work to turn fans' goodwill into revenue. They secure deals for music-merchandise manufacturers to sell keychains with their clients' faces on them, get their clients lucrative judging positions on reality TV shows and help broker clothing-design jobs with apparel companies.
Some artists have made more with these kinds of deals than they would have in the golden age of the CD. Taylor Swift, for example, collaborated with Elizabeth Arden to release a perfume that was predicted to generate $50 million in the year after its release. Swift, of course, also sells millions of records -- but music manager Allen Kovac said that it's possible even for moderately successful artists to start lucrative businesses.
Kovac cited his client Nikki Sixx, who has parlayed his position as the bassist of Motley Crue into a clothing line, several book deals and a talk radio show. Sixx is also in talks to start a talk show on cable.
"He's making more money now as an individual than he did in Motley Crue," Kovac said.
The best deals, in addition to being lucrative, also make an artists' brand more appealing for future endeavors. LaPolt cited her client Steven Tyler's job as a judge on 'American Idol'. The role netted Tyler a fat check -- around $10 million, if rumors are to be believed. But the show also introduced Tyler to a new generation and became a showcase for Tyler's personal style, which helped him land deals with fashion companies, said LaPolt.
"We did a deal with Tommy Hilfiger's rock-and-roll line, Andrew Charles, last year. And that was successful because we had a debut of his own menswear and womenswear. Now we're putting together a deal with a very prominent fashion executive and business owner, and Tyler is doing his own line," she said.
On the other hand, most musicians don't have the brand recognition of Steven Tyler or Nikki Sixx, so they couldn't land those deals even with the best attorneys and managers in the industry.
Jean Cook, the program director at the Future of Music Coalition, said that just 2 percent of musicians' total income in America comes from "brand-related revenue."
"Anybody who's able to leverage their brand and get income from it is probably doing fairly well," she said. "But most people are not in a position to leverage their brand."
That's not to say that lesser-known artists are going hungry. Some have responded to dwindling recorded-music royalties by taking on non-music jobs, said Cook. Teaching income has increased even for unknown artists, across all genres. According to Cook's data, side-jobs end up boosting the average total income for a musician to $49,000, pre-expenses -- still less than a tenth of a percent as much as Taylor Swift.
"Musicians are poor," Cook said. "There's no getting around that. Freelance musicians have to tie together a lot of different things to make a living, and don't have a lot of support from their teams. There are successful musicians -- but the vast majority of people aren't that."
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