A few hundred fans is a LOT though. I think a lot of people outside music significantly underestimate how hard it is to get to “a few hundred fans” and how much time, budget, talent and sheer luck that takes.
In real terms acquiring 100 fans - who listen consistently and repeatedly - could easily cost tens of thousands of pounds.
Here are some numbers plucked not entirely from thin air:
If you’ve got a band of four people who write and record enough music to drop out a new track every six to eight weeks (often required to build momentum and sustained engagement) then you’re probably talking about at least 50-60 hours of their time per track between them - and that’s a pretty conservative estimate going from initial song concept through rehearsal to recording in 15 hours - so four or five sessions per song. In reality it’s probably a lot more unless
you are super focused, very talented and work well as a band.
If you take average UK wages then that’s a cost of around £920 per track. You’re looking at £10k just to write rehearse and record nine tracks - before any production, mixing, mastering,
additional session musicians or anything else. Throw in maybe another £500 for those costs, per track. We are close to £15k now.
Add marketing, promo, photography, video, design and everything else you need to maintain a significant presence to attract and maintain engagement from fans and you’re easily looking at a year one total cost of maybe £30,000.
Sure you can do all of this yourself - but if so you’re going to have to give up your day job. And marketing and promo of music is HARD with lots of gatekeepers and lots of stuff you can easily get wrong, so it’s going to mean you move slower than hiring in someone who knows what they are doing.
Add in a tour - and for a lot of musicians, playing live is the best way to add new fans - and you’re looking at doubling or tripling that. For most artists playing live is a cost until you’re playing headline shows in decent sized venues. If you’re headlining a 500 cap venue where tickets are £12 then there is £6000 on offer. Take off the VAT and there’s £5000. Venue takes 20-30%, promoter a similar amount, there’s maybe £2500 left to pay three bands. Headliner gets the lions share - so maybe £1k. But that’s for at least four people - and likely sound operator and a tour manager/driver all of whom need to travel, sleep and eat. At this stage you probably have an agent taking 15% and a manger taking 20% so there is now maybe £700 to get you and your two crew to the gig, into a hotel, fed and back on the road. You need to pay your sound and you need to pay your tour manager - and you need to hire and fuel one - or more - vehicles. Sound is going to be £150-£200 per day - more if you’ve got complex requirements - and your driver will be similar. So now you’ve got £300 per show for food, beds and fuel for 6 people. You get some cash from selling merch but you have to front those costs. A good night selling 30-40 t-shirts brings you another £500 clear after costs. So for an artist big enough to headline a 20 date tour over six weeks (3 shows a week) in 500 cap venues they are going to walk away from that tour losing £120 a day each for lost wages and then the other out of pocket costs. Could be a loss of £1000 a day unless you’re crashing on floors and eating supermarket meal deals. Your tour just cost you £40k+
18 months in you’ve spent £100k.
Now, sure, after writing that music, effectively promoting it, and building your audience touring you’d have more than 100 fans. You’d hope.
Let’s say you’ve got 25,000 monthly listeners on Apple Music who have theoretically shifted to user centric payouts. (I’m choosing Apple Music because they are premium-only so it’s easier to model).
Subscription is £9.99. Take off the VAT. Take off Apple’s 30%. There’s £5.82 left to split each month, £70 per year.
If you are 10% of your fans listening then you’re getting £7 a year.
Your 25,000 fans are bringing you £175k.
Your manager gets 20%.
To maintain this, your operating costs are something like £100k a year.