Why Elton John makes $100 Million a year and you don't

Elton John reportedly took home $100M in 2015.

Elton John reportedly took home $100M in 2015.


Having heard him concert, I can personally attest to Elton John's quality as a musician and performer. Yet there are few musicians of any kind, even really good ones, who take home the kind of bacon he does. So what is it about Sir Elton that helps him pull in significantly more money in one year than the vast majority of musicians could ever hope to see in their lifetime?

Music As We Know It

The recording and playback of music is an incredibly recent development in terms of human evolution. Rich archeological evidence indicates that language, and by association music, may have been as much as two million years in the making. But that doesn't mean we've been crocodile rocking to omnipresent music all that time.

In fact, throughout the vast majority of those two million years, one factor remained constant — until just 200 years ago, music was both created and performed by people, in the presence of other people. No recording. No playback. Some music was written down in various forms of notation for later performance — the earliest known examples are inscribed on clay tablets dating from about 2000 BCE — but only for live performance by people.

In other words, to hear a given performer, one had to be in close proximity to them. If they were giving a concert, one actually had to be there to hear them play. Indeed, concerts were the only way of hearing an artist perform. No radio. No CDs. No streaming.

The Industrial Revolution

The early 19th century was a turning point in that it marked the appearance of technology that could play music automatically. Music boxes, for instance, appeared around the turn of the century, followed a couple of decades later by barrel organs.

The industrial revolution ushered in the steam-powered fairground organ in the second half of the century, and the last three decades of the 19th century witnessed the introduction of sound recording and playback and associated technologies such as the microphone, telephone (which included the first loudspeaker), and, around the turn of the twentieth century, the pianola, or player piano.

Thus, during this relatively brief period, music transitioned from a purely live phenomenon to something that could be captured and replayed at will. This brought the everyday experience of music considerably closer to the way you and I conceptualise it today. Now, of course, music is an omnipresent, digital, downloadable and streamable media. What's more, in large part due to many of the developments above, live music has become a separate industry.


In addition to our relatively newfound ability to record and play music back, the number of ways in which music is used has exploded, prompting the emergence of a whole host of additional music-related industries. Music is not just created, performed, and listened to anymore, but, since it can now be recorded, it can now also be associated — synchronised — with other media.

From TV to movies to computer games and surely soon VR, music forms an increasingly significant part of the experience. In particular, movie soundtracks have evolved from an organist playing live in the theatre to epic compositions that can be enjoyed in isolation from the moving image.


And recording and playback also means that music forms an increasingly pivotal role in a range of commercial endeavours. From corporate branding to marketing and advertising, the use of music to create the right image or to motivate consumers and clients to align themselves with a particular product or brand is becoming ever more deeply entrenched.

And there's big money to be made by the big players. $50M for Beyoncé from Pepsi, and $20M for Jay Z’s Roc Nation courtesy of Samsung to promote their Galaxy range of phones. And then there's the reported $100M in marketing for U2 from Apple for the opportunity to give their Songs of Innocence album away for free to all iPhone users.

None of this could have happened without technological advances in recording, playback and distribution of music.

Simply put, technological developments have dramatically changed the way we engage with — and use — music. Digital, and in particular streaming technologies now render tens of millions of tracks instantly accessible, and the potential for us to control our sonic environment is greater than ever before.

So what does all this have to do with the eye-watering size of Sir Elton's annual paycheque?

Survival Of The Fittest

The ability to record music and play it back at will has greatly increased the likelihood of the absolute fittest surviving, and those of only slightly lower quality falling by the wayside. Music, like many other sectors of the entertainment industry, has become what economist Sherwin Rosen terms a "superstar economy".

The difference in quality doesn't even have to be real. Perceived differences in quality, and thus value, can also lift an individual from among a sea of other similarly-talented individuals to superstar status. After all, why spend the time, effort and money going to hear a merely 'very good' artist perform if you can sit at home and listen to Elton John all day long?

And it's this winner-takes-all dynamic that is largely responsible for the fact that, even in the 'new' live industry, the top 1% of artists make more than five times as much from concerts than the bottom 95% combined.

Don't get me wrong. I'm not knocking these superstars and the status they achieve through a combination of talent, market forces, and a dash of good fortune.

It's just that there are plenty of other aspiring performers out there who, simply by the nature of the beast, will never achieve the level of success enjoyed by one Reginald Kenneth Dwight.

You can read more about the science behind the world's greatest performers and their songs in The Experience Factor.

From Adele to Zeppelin, The Experience Factor explains the science behind the success of 100 of the world's most successful songs.

From Adele to Zeppelin, The Experience Factor explains the science behind the success of 100 of the world's most successful songs.

Geoff LuckComment