Latin Music Week
Your Guide to 2019's Billboard Latin Music Week
Billboard Sounds Showcase Lineup Features Voz de Mando, Pipe Bueno & More
Here Are All the Artists Performing at the 2019 Billboard Latin Music Awards
Latin Music Week 2019: J Alvarez to Headline Billboard Sounds Showcase, Sponsored by Glad Empire & ASCAP
Madonna, Bruce Springsteen Lead Billboard's 2013 Top 40 Money Makers
It may be a digital age, but live is still the big cash driver for the top 40 earners on our annual list
The U.S. music business offers a matrix of trends to satisfy chart watchers and number crunchers. New CD sales continue to fall. Digital music sales are rising nearly 10 years after the launch of the iTunes Music Store. Streaming and subscription revenue are growing as music lovers choose easy access over-and, sometimes, in addition to-physical ownership.
These trends, however, matter very little to the most successful earners in the industry. When it comes to making the biggest score, the most money always comes from high-paying live performances.
Concerts make up 68.9% of revenue for the 40 artists on Billboard's Moneymakers list, which tallies artists' annual earnings. Remove Adele and Taylor Swift, both of whom didn't earn any U.S. touring income in 2012, and the average increases to 72.5%-a figure on par with the 72.6% in 2010 and the 68.3% that touring represented in 2011.
Perhaps Live Nation CEO Michael Rapino said it best during a conference last week, noting that music artists now make "90% of their money on the road. It's truly become the center of their financial world."
Madonna tops the 2012 list, in part because 93.5% of her total revenue came from concerts. Bruce Springsteen, a close second, earned 92% of his revenue from live shows. Roger Waters, a distant third, had the highest concert share on the list with 93.6%. The entire top 10 averaged 84.2% of their income from concerts, and the number would have been higher, if not for Justin Bieber's mere 60.1% share at No. 10 dragging down the average.
Billboard estimates the 2012 Moneymakers artists pocketed $373 million from concerts after paying agents, managers and expenses. That was up from $329 million in 2011 but down from $383 million in 2010. For all Moneymakers artists, touring income accounted for 72.8% of revenue in 2011 and 75.1% of revenue in 2012. Artists at the top of the list got an even greater share of revenue from touring. A top 10 artist made 84.2% of income from concerts in 2012 compared with 75.8% in 2011 and 81.7% in 2010.
Ironically, the most popular touring artists are usually well past their peaks on the album sales charts. In fact, touring revenue was negatively correlated with CD sales (-0.35 correlation), digital album sales (-0.43) and digital track sales (-0.38) in 2012. In other words, touring revenue doesn't move in the same direction as recorded-music sales for the 40 acts on the Moneymakers list. Artists with higher touring revenue have lower recorded-music sales and vice versa. Touring revenue is also negatively correlated with noninteractive streaming services like Pandora (-0.36) and streaming revenue in general (-0.4).
This probably doesn't come as much of a surprise. Major touring artists who command large revenue tend to be decades past their peak in recorded-music sales. In the case of the rock band Rush, for example, there wasn't a lot of music-streaming activity to go along with the group's strong touring and decÂent recorded-music revenue. Indeed, Rush earned 77.2% of its revenue from concerts and only 16.2% from recorded music-CDs, digital albums and/or digital tracks-but just 0.04% from streaming.
Touring wasn't vital for every act on the Moneymakers list. Two major artists, Swift -- who topped last year's rankings -- and Adele, made the list without any concert earnings for the year. Meanwhile, two others-Mumford & Sons and Maroon 5-pocketed less than $1 million in concert earnings for 2012. In percentage terms, touring accounted for just 12.6% of Mumford & Sons' total revenue and only about 2.6% of Maroon 5's total.
Artists who made less than $1 million on the road tended to make more from recorded music -- just as the negative correlation between concert revenue and music sales suggests should happen. Adele and Swift averaged $7.2 million in recorded-music sales while Mumford & Sons and Maroon 5 averaged about $3.2 million. The other 36 acts on the Moneymakers list, who each earned more than $1 million from touring in 2012, averaged just $2.3 million in recorded-music sales.
Older artists also find a negative correlation between concert earnings and streaming income, since many fans over 50 still attend live concerts but often don't know how to program computers or mobile phones so they can listen to their favorite tunes. As a result, older acts like Rush, Neil Diamond, Elton John and Rod Stewart earned relatively little from streaming services. Barbra Streisand and Andrea Bocelli actually earned less than $1,000 from all streaming services combined. (The 54-year-old Bocelli could fare slightly better in 2013 since his new album, Passione, was released Feb. 29.) The four younger artists who earned $1 million or less from touring collected an average of $198,000 in total streaming revenue. The other 36 artists averaged just $64,000.
Streaming revenue wasn't terribly important to any artist's overall income as measured by Billboard-not even those artists with little to no touring income. This isn't to say streaming didn't have an indirect impact on these artists' revenue. Without the promotional benefit of, say, YouTube, some albums would have hardly been as successful as they were last year. But in terms of pure, direct revenue, streaming provided a mere pittance for music's top earners.
Maroon 5 had the highest streaming share of 2012's Moneymakers list with 3.5%. Within that, the highest noninteractive streaming share was 0.5%, or one-seventh of the total. Drake had the second-highest streaming share with 3.3%, and One Direction had the third with 2.5%. It's not surprising that Maroon 5's "Payphone" and One Direction's "What Makes You Beautiful" were the No. 5 and No. 6 tracks, respectively, on Spotify in the United States in 2012. (Maroon 5 had two more songs in Spotify's top 100 of the year.)
Streaming simply hasn't yet caught on with the older generation. A handful of older artists got less than 0.1% of total revenue from streaming: Streisand, Diamond, Rush, Bocelli and Phish (the lattermost is known more for its touring than its recorded-music sales). Many others had streaming shares of less than 0.5% of revenue. In fact, all 40 acts on the Moneymakers list had an average streaming share of just 0.7%. (Nielsen tracks YouTube and Vevo but not Pandora, the latter representing a good chunk of any artist's noninteractive streaming revenue.)
Streaming revenue is really only small in percentage terms. The acts on the Moneymakers list averaged nearly $80,000 in streaming revenue in 2012-a relatively small figure compared with the tens of millions from touring, but decent considering it was nearly nonexistent just a few years ago. Clearly, it's the young, video-driven artists who take in the most from streaming. Drake, Bieber and Maroon 5 earned the highest amount in absolute dollars, while Phish and Bocelli earned the least.
Yet even in the coming years, as streaming services become a more important revenue source, possibly replacing digital downloads and CD sales, one thing is unlikely to change: Concerts will have the greatest influence of top earners' overall earnings.