What gives? It's tempting to chalk the difference up to disparities in record sales — some musicians have always gotten huge while their peers languished in obscurity. But even top artists are selling far fewer records than they used to.
Total North American sales of recorded music fell 36 percent between 2007 and 2011 alone, according to a recent report by PwC. And it's clear that digital music sales haven't yet made up for lost physical sales, and won't anytime soon.
"It wasn't that long ago that we were getting $3 million as an advance for the record. That's way over — those deals don't exist," entertainment lawyer Dina LaPolt told The Huffington Post.
Today, according to industry experts, the only way to make money in the music business is to turn an artist into a brand — then do everything in your power to maximize that brand's value.
The first step on this path still involves music. Songs make an artist famous in the first place, and allow the artist to define his or her brand. Touring can also be lucrative; spending on concerts in North American surpassed spending on recorded music in 2009, and stood at $9.5 billion in 2011, up almost 20 percent from four years before.
But tours are also expensive to produce, so they aren't necessarily as profitable for the artist as they initially appear. For that reason, artists have gotten increasingly creative with their business ventures.
"Ten years ago, if you had a hit song on the radio, and you had a great tour, then you'd sell a million records, two million records. That's not necessarily the case anymore. But today, if you have a hit song and you have a sold-out tour, then other ancillary opportunities are available to you: sponsorships, endorsements, TV, movie, animated features … all different types of things," LaPolt said.
"Recording an album really has become like a promotional tool."
So once an artist becomes popular through music, the four members of his or her management team (agent, manager, lawyer, business manager) work to turn fans' goodwill into revenue. They secure deals for music-merchandise manufacturers to sell keychains with their clients' faces on them, get their clients lucrative judging positions on reality TV shows and help broker clothing-design jobs with apparel companies.
Some artists have made more with these kinds of deals than they would have in the golden age of the CD. Taylor Swift, for example, collaborated with Elizabeth Arden to release a perfume that was predicted to generate $50 million in the year after its release.
Swift, of course, also sells millions of records — but music manager Allen Kovac said that it's possible even for moderately successful artists to start lucrative businesses.