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How Billboard’s 2018 Money Makers Were Determined

An explanation of the methodology used to estimate music's top 50 earners -- plus industry trends uncovered in the process; why no Latin acts made the list; and country music's first three acts to…

The music industry is growing again, and so are the incomes of its top artists. Billboard’s annual Money Makers report — which ranks the earnings of the top 50 music acts based on their U.S. concert grosses and royalties generated from domestic sales, streaming and publishing in 2017 — reveals that the collective take home pay for these artists grew 12.9 percent to almost $961 million, up from $851 million for the previous year. Broken down by genre, there are 24 rock, nine pop, nine country and eight R&B/hip-hop acts on this list; 29 of them are considered heritage artists, which have been active for at least 20 years and/or released a minimum of 10 albums. (The Chainsmokers were the only electronic dance act to make the list because DJs rarely report their live earnings, which comprise most of their income.)


As has been the case since this list’s inception, touring revenue accounts for the lion’s share — almost 80 percent — of the top 50’s total income. It’s no surprise then that this year’s No. 1 and No. 2 respectively, U2 and Garth Brooks, mounted the top two most profitable U.S. tours in 2017. Nearly all of the 28 newcomers to the 2018 list, such as Lady Gaga, made the cut due to their live income, while only two artists who did not tour in 2017 qualified: Drake (No. 37), who raked in the most streaming royalties of 2017, $8.6 million, and Taylor Swift (No. 48), who sold the most albums, almost $5 million worth.

On-demand streaming royalties accounted for 8.2 percent of overall earnings; from sales, 7.4 percent; and from publishing, 4.5 percent. Physical and digital sales shrank 23.4 percent, but the good news is that the streaming royalties generated by these 50 acts totaled $78.9 million, more than double the prior year’s $26.4 million total. Publishing royalties also rose 36 percent to $43.6 million.


METHODOLOGY: Money Makers was compiled with Nielsen Music and Billboard Boxscore information, using 2017 U.S. data only. All revenue figures cited are Billboard estimates and may not equal the sum of the subcategories due to rounding. Unless otherwise noted, references to streaming totals consist of combined on-demand audio and video streams. References to recording-career totals are the sum of an act’s sales, streaming and publishing earnings. Revenue from featured-artist appearances, merchandising, synchronization and sponsorship is not included. Touring revenue, after the manager’s cut, equals 34 percent of an act’s Boxscore. The top 10 lists for sales royalties were calculated based on physical and digital albums and track sales; streaming royalties consist of on-demand audio and video streams, and estimated royalties from webcasting, SiriusXM and Music Choice.

The following royalty rates were used: album and track sales, 22 percent of retail revenue. If the artists own their masters, the rate used was 66 percent of wholesale. On-demand streaming royalties were calculated using blended audio and video rates of, respectively, $0.0054 and $0.0018 per stream, applied against a 33 percent superstar-artist royalty rate; 50 percent for heritage artists; and 79 percent for artist-owned masters. Further, the statutory subscription per-stream rate of $0.0022 was applied to programmed streams and per-play estimated rates of 74 cents for Music Choice and $30 for SiriusXM. Publishing royalties were estimated using statutory mechanical rates for album and track sales. The Copyright Royalty Board streaming formula produced an average rate of 13.1 percent of streaming revenue, an average of $2.50 per play for hit radio and 60 cents per play for heritage spins and per-play publishing rates of 40 cents for Music Choice, $8.33 for SiriusXM and $0.0003 for programmed streams. A 10 percent manager’s fee was deducted from the resultant artist and publisher royalty pools, and a further 4 percent producer’s fee was deducted from each artist’s royalty pool.

Why No Latin Artists Made This Year’s List

Owing in large part to Luis Fonsi and Daddy Yankee’s “Despacito” and J Balvin and Willy William’s “Mi Gente” — with some help from the songs’ respective guest stars, Justin Bieber and Beyoncé — Latin pop had a breakthrough crossover year in 2017, but that didn’t translate to a windfall for the artists who toppled those barriers.

Despite Latin music fans’ embrace of what is now the dominant mode of music consumption, on demand streaming, no Latin artist made the latest Money Makers list. Jennifer Lopez came the closest with $8.6 million in royalties, followed by Pitbull ($7.7 million), Enrique Iglesias ($7.39 million) and Marc Anthony ($7.38 million). Both J.Lo and ex-husband Anthony made last year’s list, respectively ranking at Nos. 31 and 40.

Although it may seem shocking that Fonsi and Yankee did not make the list — “Despacito” tied for the longest run at No. 1 on the Billboard Hot 100 (16 weeks) and is the most-viewed video on YouTube (5.3 billion) — that was not enough to make the cut. Billboard estimates that the song’s U.S. performance paid out about $3.7 million in royalties, which had to be split two ways on the recorded-music side and six ways on the publishing side. Even if one performer was entitled to all of its royalties, that song alone wouldn’t be enough to break that artist into the top 50, where The Chainsmokers held the last slot with $9.1 million in total 2017 earnings.

More importantly, streaming doesn’t come close to generating the income that live performance does, and neither Fonsi nor Yankee mounted major U.S. tours. Despite the genre’s crossover potential, many Latin acts still log the bulk of their live performances abroad, which means those numbers are not reflected in Money Makers’ U.S.-only accounting.

Those artists also aren’t headlining the arena shows or charging the kind of ticket prices that mainstream U.S. acts do. The urban Latin artists that have broken through over the last year tend to appeal to younger, less affluent audiences, and tickets for these shows are often priced lower as a result, which also affects box office receipts. And, observes Henry Cárdenas, CEO of concert promotion powerhouse CMN (which has organized tours for Ozuna, Bad Bunny and Maluma), “For many of these acts, this was their first outing, so they’re not playing as many arenas as established names.”


Three ‘Billionaires’ Spark Country Streaming Growth

Thanks to Luke Bryan, Florida Georgia Line and Sam Hunt, streaming finally seems to have caught fire with country music fans.

Although country acts have been a steady fixture on Billboard’s annual Money Makers ranking — over the past three years, they have accounted for almost 20 percent of those who have made the final cut — their frequent touring and success as arena/stadium acts have almost always been deciding factors in landing them on this list.

Yet despite their ability to draw tens of thousands of fans to their shows, country artists’ popularity as live acts did not initially translate to streaming success, even as physical sales and digital downloads declined. Country fans traditionally have been slow to adopt new technologies. “Every time there is a format change, country music has lagged three to five years behind the rest of the market,” says one Nashville-based commerce executive. The good news: “They are adopting streaming faster than we have seen on other format shifts,” he says.

In 2017, for the first time, three contemporary country acts each generated over 1 billion streams. At No. 15, Bryan is the second-highest-ranked country artist on the list, but the 1.06 billion streams he generated is almost twice that of No. 2 Garth Brooks’ total. At No. 16, Florida Georgia Line did even better, racking up 1.1 billion streams. And though Hunt, No. 45, had approximately half the box-office earnings of those acts, he is slightly ahead of Bryan for total 2017 streams with 1.07 billion.

That said, Universal Music Group Nashville chairman/ CEO Mike Dungan isn’t ready to declare country’s streaming shortfall solved. Adoption still depends on younger listeners, and he suspects there aren’t a lot of 40-year-olds streaming yet. Bryan and Hunt, who are UMGN artists, “appeal to a younger audience,” says Dungan. “Luke has always had that going for him.” In Hunt’s case, he adds that getting the “Body Like a Back Road” singer to take off on streaming platforms “was a concentrated effort from day one.”

— E.C.

This article originally appeared in the July 21 issue of Billboard.