LOS ANGELES (TheStreet) -- A good musician makes people want to buy his or her music. A savvy musician makes money whether you buy that music or not.
Grammy nominees such as Jay-Z and Lady Gaga aren't so much artists as closet industries, with Jay-Z bringing in $63 million last year (still $87 million less than his wife Beyonce Knowles earned in the same stretch) and Gaga earning $62 million. While much of that can come from touring, as Gaga's take did when her 106-date tour brought in $95 million, the rest increasingly needs to be culled from sources outside the traditional music industry and people who aren't traditional music fans.
Vampire Weekend does OK as a band selling music and touring, but its song Holiday truly popped when Honda used it to sell Civics during the past holiday season.
Music sales have fallen from $14.6 billion in 1999 to $6.3 billion a decade later. Meanwhile, Nielsen says total album sales fell 13% last year, while digital music growth slowed from 27% in 2008 and 8% in 2009 to just 1% last year.
Warner Music Group alone saw a 14% decline in revenue last quarter, with a 9.5% drop in U.S. music sales and a 16.6% faceplant in international sales.
, meanwhile, announced the end of its
series (and the song-licensing gravy train that came with it) while poor sales of
Rock Band 3
and layoffs at
-owned Harmonix this week may be a funeral dirge for guitar-based music's video game revenue.
Meanwhile, with music videos as relevant to MTV as the Whig Party is to U.S. politics, the best hope an artist has of hearing his or her music played on that network is if it's licensed to a show such as
-- which is exactly how many artists are being heard.
"It's sort of like the new radio, in a way," says Peter Shane, vice president of creative services for Spirit Music Group, a music company that places songs in commercials, television shows and movies. "When the right piece of music is attached to the right footage and it resonates with an audience, it leads to a whole different level of exposure that's impossible to get from just hearing something on the radio while hitting all demographics."
Which is exactly what happened to New Zealand band and Spirit client The Naked and Famous, who released their debut album in September but only saw downloads and fan interest pick up in the U.S. when their single
was featured in the season premiere of the CW's
, then again in January during the tension-filled ending of an episode of NBC's
that series creator Josh Schwartz called "the best 10 minutes in the show's history," then again in an episode of the CW's
this month. As a result,
is still among
iTunes' Top 150 sellers nearly six months after its release.
"It's a great place to get exposure, and people watch TV and consume media differently now," Shane says. "They do it with their smart device with them and as soon as they see something that resonates with them, like a piece of music attached to an image, they can immediately find that music and download it, stream it or listen to it."
Such was the case with Vampire Weekend's
, which popped when
used it to sell Civics during last year's holiday season, and the Black Keys'
The Girl Is On My Mind
, which rose to prominence as a pitch for
-- both noted by Stephen Colbert when he refereed a
between the two bands last month. Indie band The Mooney Suzuki, meanwhile, got an unexpected boost from their song
10 years after it was released when Spirit inserted it into a global branding campaign for
. The same trick works for established acts such as T. Rex, whose album cut
resurfaced almost 34 years after lead singer Marc Bolan's death when Spirit placed it in the graphic-novel-based action comedy
Scott Pilgrim vs. The World
and it became an iTunes best seller -- and Lou Reed, whose
Walk On The Wild Side
gets yet another incarnation as an
ad during Sunday's Grammy telecast.
"It can be very lucrative, but it all depends on the terms," Shane says. "It's a way for catalogs to generate a significant amount of revenue and great for independent acts just starting out and great for estates that want to make sure the legacy gets out there."
Shane wouldn't comment on what Spirit's artists make in licensing revenue, but television, movie and commercial licensing can account for 20% to 25% of an artist's total revenue on the low end and nearly 40% in larger deals. That can be supplemented by video game licensing revenue that, while losing traction with some titles, is still a force in such popular games as Ubisoft's
series -- the latest installment for Nintendo's Wii ranked among NPD Group's Top 10 titles of last year -- and Harmonix's
. According to the American Society of Composers, Authors and Publishers, artists can earn royalties of 8 to 15 cents per game sold or song played, but more likely will get a one-time buyout fee of $2,000 to $20,000 to have their song featured in a game.
Of course, cutting out the middle man and snagging endorsements yourself never hurts. The Black Eyed Peas, last seen punishing a Super Bowl halftime audience with their reimagining of beloved songs from the 1980s, earned $48 million last year with help from deals with Apple, Bacardi,
-- which just named singer Will.i.am its director of creative innovation. Endorsing a personal fragrance helps, too, as Beyonce, Mariah Carey, Faith Hill, Britney Spears and Diddy have all taken a share of the $2.5 billion the NPD Group says has been generated by "prestige fragrances" within the past year and the more than $4 billion in sales racked up globally by celebrity fragrance maker Coty alone.
If you somehow manage to become famous enough through your music to have a story anyone wants to hear, the just-slightly-better-off-than-music publishing market also offers some options. Jay-Z's deal with Random House imprint Spiegel & Grau, for example, has put his autobiography
New York Times
best-seller list for the past 11 weeks. Rolling Stones guitarist Keith Richards'
, meanwhile, has been on the same list for 14 weeks, and a slew of other artists including Roseanne Cash, Ricky Martin, Motley Crue's Vince Neil and, yes, Justin Bieber also issued tomes about their lives last year. No, it's not music, and it's not necessarily a cool thing to do, but with few exceptions -- including Guns 'n' Roses guitarist Slash and Kings of Leon drummer Nathan Followill, who told producers of Fox's show/cover-song jukebox
to take it walking when asked for rights to their songs -- artists are seeing less of a music industry to buy into, never mind sell out of.
"Most of the stigma is gone because the art is cool," Shane says of a generation that learned who Paula Cole was from
, put Phantom Planet on its iPod after watching
and totally had an Ingrid Michaelson song playing at its wedding after hearing it on
. "There's some really amazing stuff out there right now -- and it's not seen by this generation as a bad thing, because it's just part of their culture and how they discover things."
-- Written by Jason Notte in Boston.
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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.