Key Takeaways:
- Today’s musicians are building careers through platforms like TikTok, YouTube, and Twitch — often without traditional label support.
- As you grow your online presence, you’re also running a business — with complex income streams, royalty tracking, and tax obligations to manage.
- Understanding digital revenue, licensing rights, and business structures is key to protecting both your music and your money.
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The music industry has transformed — and so has the way artists build careers. You no longer have to wait for a record label to discover you or hope a producer hears your demo. Today, you can connect directly with your audience, release your own music, and monetize on your terms.
This shift means you’re not just a music artist anymore — you’re a content creator, marketer, and, in many ways, a small business. Platforms like TikTok, YouTube, Instagram, and even Twitch have opened the doors to global exposure and new revenue streams. But with that opportunity comes complexity.
Let’s break down where musicians are building their followings today — and the financial and tax challenges you’ll face as your career grows.
How Today’s Musicians Are Breaking Through
The path to musical success today often runs through the digital platforms where fans are spending their time and discovering their next favorite artist. They include:
Social Media and Viral Discovery
If you’re looking to get noticed, social media is the new audition stage. Platforms like TikTok and Instagram are the top discovery tools for Gen Z and millennial listeners. According to Deloitte’s recent Digital Media Trends study, 82% of Gen Zs and 70% of millennials find new music through social or user-generated content (UGC) platforms.
That means your success may hinge less on label backing and more on the right soundbite hitting TikTok’s “For You” page. One track placed in the background of a viral dance video or gaming livestream can turn an unknown artist into a chart-topper overnight.
Streaming Service Algorithms
Spotify’s Discover Weekly, Apple Music’s New Music Mix, and YouTube’s recommendation engine have all become key players in how listeners find music. Artists with strong engagement — likes, shares, playlist additions — are rewarded with more visibility. These platforms blur the line between algorithm and audience, pushing up-and-coming talent to millions of potential fans.
The YouTube Ecosystem
YouTube remains a powerful platform for music discovery and community building. Whether you’re posting official music videos, lyric videos, Shorts, behind-the-scenes vlogs, or livestreams, YouTube allows you to create content that keeps fans engaged far beyond a single release. It’s also a growing source of revenue, thanks to ad share, fan donations, and paid memberships.
Gaming and Livestreaming
Music and gaming are increasingly intertwined. Whether your songs are licensed into games like Roblox or featured in a Twitch streamer’s background playlist, gamers are becoming some of your biggest supporters. And with platforms like Twitch and Discord, artists can engage with fans in real time — creating both community and content at once.
Challenges That Come With Building Your Brand Online
As you grow your audience and your income, your responsibilities grow too. Many artists don’t realize they’re essentially running a business until something goes wrong. Here are a few financial and tax-related complications to keep in mind:
Royalty Tracking and Monetization
Whether your music is streamed, licensed, tipped, or used in a viral clip, you may be owed royalties. But are you collecting all the royalties you’re due? Royalty tracking across different platforms can get messy fast — especially when you’re self-releasing or relying on third-party services. You’ll need to stay on top of reporting, rights management, and digital performance income.
Tax Compliance — Especially State and Local
With income coming from dozens of sources — some international — your tax obligations quickly become more complicated. Are you properly reporting income from digital sales, ad revenue, fan donations, or merchandise? Are you triggering tax liabilities in multiple states through virtual performances or merchandise sales? SALT (state and local tax) issues can sneak up on you, and the penalties are real.
Business Management
As your online presence grows, so does the need for business infrastructure. That might mean forming an LLC or S corp, hiring a business manager or accountant, or developing a plan to separate personal and professional finances. If you’re taking donations or getting paid through platforms like Patreon, Twitch, or YouTube Super Thanks, you’re operating a business — and need to treat it like one.
Licensing and Usage Rights
Is your music being used in videos or streams without permission? Are you licensing tracks correctly when collaborating with other creators or influencers? As the line between content and music blurs, licensing mistakes can lead to lost income or even legal trouble. You need to understand your rights — and how to protect them.
How We Can Help
Our Entertainment, Sports, and Media practice works with musicians and content creators to navigate the financial side of success. From royalty audits and tax strategy to business formation and digital licensing, we help you build a foundation to protect your art and your income. Reach out to our team today to start building the financial and strategic systems that support your long-term success.