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How Much Money Do Songwriters Make?
Introduction
First off, let us get the bad news out of the way!
Statistics published by the various rights organisations show that only a small minority of published songwriters (perhaps as few as 5% - in other words 1 out of 20), make enough money each year to be able to devote themselves full-time to songwriting. Now given that published songwriters constitute a minority of those actually writing songs at any one moment, it is obvious that there exists a vast number of people, who (given that their songs are available for purchase) rightly regard themselves as songwriters, but who do not earn a living wage from their talent.
That's the bad news. But the news is not always bad!
Take Terius Adamu Ya Gesteelde-Diamant for example, better known to you and I as the singer,songwriter and record producer The Dream. It is claimed (and not denied), that he earned more than $15 million for writing just one song - Rihanna's hit "Umbrella". And that is just to date!
OK - now let's take a lesser-known song like "Walking On Sunshine" which reached #7 in the UK back in 1985 for Katrina & The Waves. Thirty years later, it still earns a staggering $1 million dollars every year!
Finally, take a couple of real classics, you know the ones that most of us can have a go at singing, like "Happy Birthday To You" (written by The Hill Sisters), "White Christmas" (penned by Irving Berlin), "You’ve Lost That Loving Feeling" (Barry Mann, Cynthia Weil & Phil Spector) and "Yesterday" (John Lennon & Paul McCartney. Or if truth be told, just Paul on his own). Well according to BBC4's "The Richest Songs In The World" documentary, each of those songs has earned in excess of twenty-five million dollars to date.
As you might expect, if you do manage to produce a classic hit, the money will obviously be phenomenal. But even a relatively minor smash can make you a very rich person indeed.
So, any questions?
OK - forget the stars! Supposing a song I write sells just one million copies, how much money will I earn?
Determining the exact amount of money you would earn from selling one million copies of a song depends on various factors, including the terms of the contract you signed, the distribution channel for your song, the format of the sales (physical copies or digital downloads or both), and the revenue share you receive from each sale.
In other words, you don't actually know!
No, nor does anybody else. Without the extra factors above, it is not even remotely possible to estimate what a million-selling song will bring in for you. You might as well ask me how much a house is worth, without telling me where it is located, if it is detached or semi-detached, how big it is, what age is it, what's its condition like etc etc. In fact, without those additional details, not even "Location, Location, Location" could give you a valuation!
On the other hand, name me a specific hit song, and I will be able to tell you what it has earned, but if you are just talking about mythical songs - I can't, because every million-selling song does not earn the same amount of money for its songwriter. It all depends on a lot of other factors all of which have to be taken into account.
So what do you need to know in order to give me a figure?
Well obviously, the amount of money a hit song can make depends the song's popularity, in which territory did the bulk of its sales take place, what are the terms of the contract you signed, and how much revenue is being generated from the various sources (such as sales, streaming, licensing, and performance royalties), along with the distribution of those revenues among rights holders.
Here are some of the key factors that influence the earnings of a hit song:
Sales and Streaming Revenue
Hit songs generate revenue from sales of physical copies (e.g., CDs, vinyl) as well as digital downloads and streams on platforms like Spotify, Apple Music, YouTube Music, and others. The amount earned per sale or stream can vary depending on the platform and the artist's contract terms.
Licensing and Sync Opportunities
Successful songs may be licensed for use in commercials, films, TV shows, video games, and other media, generating additional revenue through synchronisation licensing fees. The amount earned from licensing agreements can vary widely depending on factors such as the prominence of the song in the project, the duration of the use, and the territory of distribution.
Performance Royalties
Hit songs generate performance royalties when they are played on radio, TV, in live concerts, and other public performances. These royalties are collected and distributed by performing rights organisations (PROs) such as ASCAP, BMI, SESAC, PRS etc. The amount earned from performance royalties depends on factors such as the frequency of airplay, audience size, and the territory of performance.
Merchandising and Endorsements
Successful artists may capitalise on the popularity of their hit songs by selling merchandise (e.g., T-shirts, posters, concert tickets) and securing endorsement deals with brands. Revenue generated from merchandise sales and endorsements can contribute to the overall earnings of a hit song.
Royalty Splits and Contracts
The earnings from a hit song are typically divided among various rights holders, including the songwriter(s), composer(s), performing artist(s), music publisher(s), and record label(s). The distribution of royalties depends on the terms of the artists' contracts, publishing agreements, and licensing arrangements.
Overall, the earnings potential of a hit song can be substantial, especially if it achieves widespread popularity and success across multiple revenue streams. However, it's important to note that the music industry is highly competitive, and not all songs achieve hit status or significant financial success. Additionally, the revenue generated by hit songs can fluctuate over time and may be influenced by factors such as changing consumer preferences, market trends, and technological developments.
OK, so now we know where the money is. But how does the songwriter get this money?
Songwriters receive money from their songs through various avenues:
Performance Royalties
When songs are performed live, on radio, TV, or in public venues, songwriters receive royalties through performing rights organisations (PROs) like ASCAP, BMI, SESAC or PRS. These organisations collect fees from venues and broadcasters and distribute them to songwriters.
Mechanical Royalties
Songwriters earn royalties when their songs are reproduced or distributed in physical or digital formats, such as CDs, vinyl, downloads, or streams. These royalties are typically collected and distributed by music publishers or mechanical rights organisations like the Harry Fox Agency.
Synchronisation Licensing
This involves granting permission for a song to be used in TV shows, films, commercials, video games, or other visual media. Songwriters receive fees for these licenses, negotiated either directly or through their publishers.
Print Music
If sheet music or songbooks are created for a songwriter's compositions, they receive royalties from the sales of these materials.
Performance Fees
Songwriters who also perform their songs as recording artists can earn money from live performances, concerts, and tours.
Streaming Royalties
With the rise of digital streaming platforms like Spotify, Apple Music, and YouTube, songwriters receive royalties based on the number of streams their songs accumulate. These royalties are typically collected and distributed by performance rights organisations or digital distributors.
Co-writing and Collaboration
Songwriters who collaborate with other artists or songwriters may share royalties based on their individual agreements.
Sampling
If other artists use portions of a songwriter's work in their own compositions, the songwriter may receive royalties or a licensing fee.
International Royalties
Through reciprocal agreements between PROs worldwide, songwriters can receive royalties from performances and sales in other countries
Sub-publishing
In international markets, sub-publishers help collect royalties for songwriters in specific regions or countries.
Advances and Royalty Advances
Some songwriters receive advances against future royalties from music publishers or record labels.
Overall, the income generated by a songwriter depends on the success and popularity of their songs, the platforms where they're used, and the terms of their agreements with publishers, record labels, or other collaborators.
OK, A lot of technical terms in there. What for example are Performance Royalties?
Performance royalties refer to the compensation paid to songwriters, composers, and publishers for the public performance of their music. These royalties are earned whenever their songs are performed or broadcasted in public settings such as on the radio, television, in live concerts, clubs, restaurants, bars, or other venues.
Here's how performance royalties are gathered and distributed:
Collecting Agencies
Performance royalties are collected and distributed by performing rights organisations (PROs) such as ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.), SESAC (Society of European Stage Authors and Composers), PRS (Performing Rights Society) and others. These organisations act as intermediaries between the songwriters and the entities that use their music publicly.
Tracking Performances
PROs track performances of songs through various means including monitoring radio and TV broadcasts, live performances, digital streaming services, and reports from venues. They use this data to determine the royalties owed to the songwriters.
Licensing Fees
PROs negotiate licensing agreements with radio stations, TV networks, venues, digital streaming platforms, and other entities that use music publicly. These agreements stipulate the fees these entities pay for the right to publicly perform the songs in the PROs' catalogues.
Distribution of Royalties
After collecting licensing fees, PROs distribute the collected royalties to their affiliated songwriters, composers, and publishers. The distribution is based on the frequency and popularity of the performances of each song.
International Royalties
PROs often have reciprocal agreements with similar organisations in other countries. This allows songwriters to receive performance royalties from their music's use in other countries, and vice versa.
Performance royalties are an important source of income for songwriters and composers, particularly as their music is broadcasted and performed more widely. These royalties help compensate creators for the use of their intellectual property and enable them to continue their creative endeavors.
The major worldwide performing rights organisations (PROs) include:
ASCAP (American Society of Composers, Authors, and Publishers) - United States
BMI (Broadcast Music, Inc.) - United States
SESAC (Society of European Stage Authors and Composers) - United States (now part of The MLC for mechanical licensing)
PRS for Music (Performing Right Society for Music) - United Kingdom
SACEM (Société des auteurs, compositeurs et éditeurs de musique) - France
GEMA (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte) - Germany
SOCAN (Society of Composers, Authors, and Music Publishers of Canada) - Canada
APRA AMCOS (Australasian Performing Right Association and Australasian Mechanical Copyright Owners Society) - Australia and New Zealand
JASRAC (Japanese Society for Rights of Authors, Composers, and Publishers) - Japan
KOMCA (Korea Music Copyright Association) - South Korea
IMRO (Irish Music Rights Organisation) - Ireland
What then are Mechanical Royalties?
Mechanical royalties refer to the compensation paid to songwriters, composers, and music publishers for the reproduction and distribution of their music in physical or digital formats. These royalties are earned when their songs are reproduced on CDs, vinyl records, cassette tapes, digital downloads, streaming services, or any other format where copies of the music are made.
Here's how mechanical royalties work:
Reproduction and Distribution
Whenever a song is reproduced or distributed in a tangible or digital format, a mechanical royalty is generated. This includes the creation of CDs, vinyl records, digital downloads, streams, and any other medium where copies of the music are made available to consumers.
Statutory Rate
In many countries, including the United States, there are statutory rates set by government agencies or legislation that dictate the minimum amount of mechanical royalties that must be paid per copy of a song. These rates may vary depending on the format of the reproduction (e.g., physical vs. digital) and the territory where the reproduction occurs.
Collection and Distribution
Mechanical royalties are typically collected and distributed by music publishers or mechanical rights organisations such as the Harry Fox Agency in the United States. These organisations negotiate licensing agreements with record labels, digital music services, and other entities that reproduce and distribute music. They then collect the royalties owed and distribute them to the appropriate songwriters, composers, and publishers.
Reporting and Tracking
Publishers and mechanical rights organisations use various methods to track the reproduction and distribution of music, including sales reports from record labels and digital music services, as well as data from music streaming platforms. This information is used to calculate the mechanical royalties owed to each rights holder based on the usage of their music.
International Royalties
Like performance royalties, mechanical royalties can also be earned internationally through reciprocal agreements between rights organisations in different countries. This allows songwriters and publishers to receive royalties from the distribution of their music in foreign territories.
The major worldwide mechanical rights organisations include:
HFA (Harry Fox Agency) - United States
MCPS (Mechanical-Copyright Protection Society) - United Kingdom
MLC (Mechanical Licensing Collective)) - United States (handles mechanical licensing under the Music Modernisation Act)
JASRAC (Japanese Society for Rights of Authors, Composers, and Publishers) - Japan
GEMA (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte) - Germany
SABAM (Société d'Auteurs Belge - Belgische Auteurs Maatschappij) - Belgium
APRA AMCOS (Australasian Performing Right Association and Australasian Mechanical Copyright Owners Society) - Australia and New Zealand
Mechanical royalties are an essential source of income for songwriters, composers, and music publishers, providing compensation for the use of their musical compositions in various formats and ensuring that they receive fair remuneration for their creative work.
Explain the term synchronisation Licensing
synchronisation licensing, often shortened to sync licensing, refers to the process of granting permission to use a musical composition in synchronisation with visual media. This could include movies, TV shows, advertisements, video games, online videos, and any other visual content where music is synchronised with the accompanying visuals.
Here's how synchronisation licensing works:
Permission
Before using a song in a visual project, the producer or creator must obtain permission from the owner of the musical composition. This typically involves contacting the music publisher, who represents the songwriter's interests, and negotiating the terms of the license.
Negotiation
The terms of a synchronisation license can vary depending on factors such as the duration of the song's use, the type of project (e.g., commercial vs. non-commercial), the territory where the project will be distributed, and the prominence of the song within the project. Negotiations may also include considerations such as whether the license is exclusive (meaning the song cannot be used in other projects) or non-exclusive.
Fees
The owner of the musical composition charges a fee, known as a synchronisation fee or sync fee, for the right to use the song in synchronisation with the visual content. This fee can vary widely depending on factors such as the popularity of the song, the size of the audience, and the budget of the project.
Clearance
Once the terms are agreed upon and the synchronisation fee is paid, the licensee receives a synchronisation license granting them the right to use the song in their project. It's essential to ensure that all necessary permissions and clearances are obtained to avoid copyright infringement claims.
Royalties
In addition to the synchronisation fee, the owner of the musical composition may also receive ongoing royalties based on the performance of the visual project. These royalties are typically collected and distributed by performing rights organisations (PROs) such as ASCAP, BMI, or SESAC, which monitor the usage of the song in broadcasts, performances, and digital streams.
Sync licensing can be a lucrative revenue stream for songwriters, composers, and music publishers, providing opportunities for their music to reach new audiences and enhancing the emotional impact of visual media through the power of music.
What exactly conctitues Print Music?
Print music refers to musical compositions that have been notated and published in written form for performers to read and interpret. This written form can take various formats, including sheet music, songbooks, scores, and individual instrumental or vocal parts.
Here's a breakdown of print music:
Sheet Music
Sheet music typically consists of a musical score that includes the musical notation for all the instrumental or vocal parts of a composition. It provides detailed instructions on how the music should be performed, including notes, rhythms, dynamics, tempo markings, and other musical expressions. Sheet music is commonly used by musicians, conductors, and music educators for learning, practicing, and performing music.
Songbooks
Songbooks contain collections of musical compositions, often grouped by genre, artist, composer, or theme. They may include popular songs, classical pieces, folk tunes, jazz standards, or any other repertoire. Songbooks typically feature simplified arrangements of the music, making them accessible to a wide range of musicians, from beginners to advanced players.
Scores
A score is a complete written representation of a musical composition, including all the instrumental or vocal parts arranged on multiple staves. Scores are commonly used in classical music and orchestral repertoire, where multiple instruments or voices are involved. They provide a comprehensive overview of the entire composition, allowing performers to see how their part fits into the larger musical structure.
Individual Parts
In addition to full scores, print music often includes individual instrumental or vocal parts for each performer in an ensemble. These parts are tailored to the specific requirements of each instrument or voice and may include cues, markings, and instructions to guide the performer's interpretation of the music. Individual parts allow each musician in an ensemble to focus on their role within the overall performance.
Print music serves as a vital resource for musicians, providing them with a tangible means of accessing and interpreting musical compositions. It facilitates learning, rehearsal, and performance, allowing musicians to engage with a diverse range of musical styles and genres. Additionally, print music enables composers and arrangers to share their creative work with performers and audiences worldwide, preserving and disseminating the rich cultural heritage of music.
What are Performance Fees?
Performance fees refer to the compensation paid to performers for their live performances, concerts, or appearances. These fees are typically negotiated between the performer (or their representative) and the event organiser, venue, promoter, or booking agent.
Here's a breakdown of performance fees:
Negotiation
Performance fees are negotiated as part of the agreement between the performer and the party organising the event. The fee can vary widely depending on factors such as the popularity and fame of the performer, the size and prestige of the venue, the duration and nature of the performance, and the location of the event.
Fixed Fee or Percentage
Performance fees can be structured in different ways. Some performers may charge a fixed fee for their performance, while others may negotiate a percentage of ticket sales, merchandise sales, or other revenue generated by the event.
Advance Payment
In some cases, performers may require an advance payment or deposit as part of the agreement to secure their performance. This advance is typically deducted from the total performance fee owed to the performer.
Rider
Performers may also include specific requirements or provisions in their contracts, known as riders, which outline additional terms and conditions for the performance. This may include details such as technical requirements, hospitality arrangements, transportation, accommodations, and other logistical considerations.
Payment Terms
Payment terms for performance fees can vary depending on the agreement between the parties involved. In some cases, the fee may be paid in full upfront, while in other cases, it may be paid in installments or upon completion of the performance.
Royalties
It's important to note that performance fees are separate from royalties earned by songwriters, composers, and music publishers for the public performance of their music. Performers receive performance fees for their live performances, while rights holders receive royalties for the use of their musical compositions in these performances.
Performance fees are a crucial source of income for performers, providing compensation for their time, talent, and effort in entertaining audiences through live music performances. The negotiation and agreement of fair performance fees are essential to ensuring that performers are adequately compensated for their contributions to the music industry.
What exactly are Streaming Royalties?
Streaming royalties refer to the compensation paid to rights holders for the use of their music on streaming platforms such as Spotify, Apple Music, Amazon Music, YouTube Music, and others. These royalties are earned based on the number of times a song is streamed by users on these platforms.
Here's how streaming royalties work:
Per-Stream Royalties
Streaming platforms typically pay rights holders a certain amount of money for each stream of a song. This per-stream royalty rate can vary depending on factors such as the subscription tier of the user (e.g., premium vs. free), the country or region where the stream occurs, and the terms negotiated between the streaming platform and the rights holders.
Streaming Revenue
Streaming platforms generate revenue through subscription fees paid by users, as well as advertising revenue from free-tier users. A portion of this revenue is allocated to pay royalties to rights holders for the use of their music.
Distribution of Royalties
Streaming royalties are collected and distributed by the streaming platform to rights holders, including recording artists, songwriters, composers, music publishers, and record labels. The distribution of royalties may vary depending on the terms of the agreements between the rights holders and their respective collecting agencies or distributors.
Pro-Rata Payouts
Streaming platforms typically pool the revenue generated from subscription fees and advertising and distribute it among rights holders based on the proportionate share of streams their music receives. This means that artists and rights holders with more streams receive a larger share of the royalties.
Performance Metrics
Streaming platforms provide analytics and performance metrics to rights holders, allowing them to track the number of streams, audience demographics, listener engagement, and other relevant data. This information can help rights holders understand how their music is being consumed and optimise their marketing and promotional efforts accordingly.
International Royalties
Streaming royalties can also be earned internationally, as streaming platforms operate globally. Rights holders may receive royalties for streams of their music in other countries through reciprocal agreements between collecting societies and licensing agencies worldwide.
Streaming royalties have become an increasingly significant source of income for artists, songwriters, and music industry professionals in the digital age. However, the distribution and transparency of streaming royalties have been subjects of debate and scrutiny within the music industry, with some stakeholders advocating for fairer compensation models and greater transparency in royalty reporting.
In closing...
As you can see from this brief article, songwriters have many sources of potential income once their song is recorded and ready to go on the open market, and all these sources pay out money in varying amounts throughout the lifespan of the song.
The important thing is to be aware of all the potential sources, and to ensure that you are properly registered to collect all the income to which you are entitled.
Copyright Songwriter Magazine, International Songwriters Association & Jim Liddane: All Rights Reserved
If you have wandered onto this page by accident, then you may very well be wondering what "The Knowledge" button above is all about.
"The Knowledge" is a free multi-part course which takes you from thinking up the basic idea for your song, through using AI or Artificial Intelligence to help improve your writing skills, to penning the title, the lyric and the melody. It then covers plagiarism (what to do if you're told your song sounds like another one!) and copyrighting your song, so that you can take action if your work is stolen.
Finally, it deals with selling your song, promoting your demo, music publishers, putting your songs on the web, and in movies, or on television, getting the money in, raising cash to fund your career via crowd-funding, before setting up your own music publishing company so that you get to keep all of the money! And that blue button at the bottom of each lesson simply takes you to the next lesson.
If however you would like to go back to Lesson 1 and start the course (it will take about 90 minutes to complete), then just press HERE
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