You’re probably tired of hearing your music referred to as only a “hobby” or at best, a “side-job”. And if you’re content with keeping your music simply as a hobby, then right on – keep on with it! But if you’re a producer, engineer, self-producing artist, and you’re curious if that now-hobby can actually be profitable, then read on.
Owning a home studio is, more now than ever before, a profitable business. All it takes is some creativity (and let’s be honest – if you’re in this industry, that’s a MUST) and a bit of direction on how to approach your music with the mindset of a “business owner”.
How Do Music Studios Make a Profit?
A business owner should always be considering what their revenue streams are and working to maximize those streams for profit. One of the plus sides of running a music studio business is the creative variety of revenue streams.
What are some of those streams which generate revenue? Here are 4 major ones to consider for your home studio.
1. Production and/or beat-making
If you run a home studio, chances are you’re producing music, either for yourself or for other artists. Production projects are most often the primary revenue stream for home studio owners.
Investment prices for production projects can have a huge range, which is both a good and bad thing for your business. The upside? There’s no limit to how high of a price you set for a project. If you feel the project is worth $1500 based on your investment of time and resources, you’re the boss! The downside? Producers who undervalue their work can “lower the market’s expectation” with regards to how much a production project is worth. Don’t compromise what your work is worth by focusing on the lower value projects out there – focus on providing the best possible results for your clients, and they‘ll come back for more.
Beat making or pre-made instrumental tracks fit under this production window too. How cool is it to take that library of beats you’ve made, upload them to a service like beatstars.com, and start making money off of them from artists anywhere in the world? Again, you can structure this price however you’d like. Non-exclusive (you retain some ownership and control of the music) beats often range from $10-$50, whereas exclusive rights to a beat can climb to closer to $300. Setting up a big library of beats that artists can choose from is a great way to generate revenue “in the background”.
2. Engineering (editing, mixing, mastering)
Artists who are serious about their music understand the importance of high quality mixing and mastering services. And they’re willing to pay a premium to help their music reach that industry standard professional sound. If you can provide that through your mixing and mastering, then this is a huge business asset for your studio.
It’s important to note – if you’re not confident in your mixing abilities, or are still new to engineering, then it’s better for your studio’s business and reputation to practice first before expecting those high-paying jobs. Nothing sucks more than landing a high-paying client, only to have them back out of the project because your mix just didn’t deliver for them.
Practice, practice, practice – but don’t practice for free! This can still be a revenue stream, even if you’re newer to it. My first mixing project was $50. Start with smaller projects, build up practice and a portfolio, and work towards building a reputation and refining your sound. High quality mixing can land you projects in the neighborhood of $300 per song.
Consider ways of packaging in multiple services to your engineering too to help your offer stand out for artists, like mastering (if you’re capable or have a connection with another engineer) or general post-production editing. Artists love a go-to, one-stop engineer who can take care of it all for them!
3. Tutorials, teaching, and/or consultation
I’m sure you’ve been in this scenario before: watching your 10th YouTube tutorial on “how to make your drums sound punchy”, or some other production or mixing tutorial. The truth is, people love to learn, especially when it’s for a topic that they’re passionate about.
The problem with YouTube free tutorials though is the process of weeding through the hundreds of random videos online to find one that works in your context. And that’s why people hire coaches or consultants – because hands on training is valuable.
If you’ve got a particular skill set in your studio work, whether it be mixing, tracking drums, playing guitar, producing pop music… then building a platform to teach this skill is an excellent revenue stream for your business. These could be as simple as in-person lessons, or as complex as full online courses.
4. Space rental
An extremely under-rated revenue stream that producers underestimate is simply renting their space out. Many bands or musicians actively look for spaces to rent, simply because they need a more dedicated music space for practice. I, as a drummer, was definitely in this boat, and was willing to pay a monthly service simply to have a place to practice.
If your studio space can facilitate bands or cater to specific musician practicing needs, then renting out your space can be a great revenue stream consideration to make. It’s important to note that insurance, for both the renter and your equipment, should be considered and explored in detail for this option.
And just like that, there’s 4 completely different revenue streams for your home studio. Let’s return to the question of profitability – sure there are lots of possible income streams, but will they add up enough to make your business profitable?
The beautiful thing for home studios owners is that there are very few and minimal overheads costs for your business. What does that mean? You (likely) don’t need to hire staff, pay a separate rent (besides your mortgage/house rent), or spend much else to run a home studio. Once you’re set up, you’re set to start making music and generating income. To paint a quick picture…
Let’s assume you run a home studio and have had it set up for a few months. You’re starting to connect with local bands, and have even started to do a few mixing projects for people at a small cost of $50/track. You’re a very talented pianist, and love to teach as well. Now let’s assume your rent at home is $1500/month. As an example scenario, to become profitable, you would need:
- 1 production project for a 4 song EP, $200/song
- 3 private piano students, teaching a weekly lesson at $40/hour
- Mix 4 songs at $50/song
- Rent your studio space out to a local band for weekly band practice, $50/ 3 hour weekly practice
Just like that – you’ve made $1680 this month – enough to cover rent with a bit left over. It’s a start, but it’s profitable. And the best part is – the more experience and connections you gain, the more it grows. The sky’s the limit!
