Download - All the revenue streams for musicians

All theRevenue Streams

Songwriters

Publishers

Sound recording copyright owner

Recording artist

Two copyrights in a song

notes and lyrics make up a musical composition

sound recording is a recorded performance

of a musical composition Background musiciansand singers

In most cases, composition royalties are separate and distinct from sound recording royalties.

Even if you are both the songwriter and the recording artist, you need to think about these roles separately.

Based on the contours of copyright law and business practice, this list includes all the possible ways that US-based musicians can make money off their compositions, sound recordings, performances, brand, or knowledge of their craft.

42 Revenue Streams Revenue Streams: Existing, Expanded, New

money.futureofmusic.org/40-revenue-streams/ money.futureofmusic.org/revenue-streams-existing-expanded-new/

Compositions/being a composer

1. Publishing advance

2. Mechanical royalties

3. Commissions

4. Public performance royalties

5. Streaming mechanical royalties

6. Composing original works for broadcast

7. Synch licenses

8. Sheet music licensing/sales

9. Lyric display

10. Ringtones

11. Songwriter awards programs

12. Publisher settlements

money.futureofmusic.org/40-revenue-streams/

C

1. Publishing advance

The rate: No standard rate

What it’s for: Advance on publishing earnings, as part of a publishing deal

Who pays it: Publishing company

Who gets the money: Songwriter/composer


C

2. Mechanical royalties

The rate: 9.1¢ per manufactured track

What it’s for: Reproductions of recordings of your songs/compositions – either physical or digital

Who pays it: Record labels, publishers or aggregators

Who gets the money: Songwriters/composers


C

3. Commissions


What it’s for: Payment for creating an original musical composition

Who pays it: Ensemble, presenter, orchestra, dance company or other entity



C

4. Public performance royalties

The rate: Varies according to performance/venue/licensee

What it’s for: Generated when your songs are played publicly on radio, TV, in clubs and restaurants

Who pays it: Broadcasters, venues, TV networks, restaurants, webcasters, streaming music services

Who gets the money: Collected by ASCAP, BMI and SESAC and split 50/50 between publisher and composer


C

5. Streaming mechanical royalty

The rate: 10.5% of revenue minus payments to PROs

What it’s for: Revenue generated when your compositions are streamed on on-demand services (Rhapsody, Spotify, Rdio)

Who pays it: Service pays publisher or mechanical licensing agent

Who gets the money: Composer and publisher


C

6. Composing original works for broadcast


What it’s for: Typically a commercial request to compose an original jingle, soundtrack, score, or other musical work

Who pays it: Film producer, TV or cable show, ad agency



C

7. Synch licenses


What it’s for: Typically licensing an existing work for use in a movie, documentary, TV, video games, internet or a commercial

Who pays it: Movie studio, ad agency, game company, etc.

Who gets the money: Songwriters/composers and publishers share publishing money. (Recording artists and labels get a separate fee for master use of sound recording)


C

8. Sheet music licenses or sales


What it’s for: Sale or licensed use of sheet music

Who pays it: Ensembles, schools, students, musicians. Sometimes your fans if you’re selling sheet music directly

Who gets the money: Composer, sometimes via publisher


C

9. Lyric display

The rate: A fee for term, or percent of gross revenue from site (subscriptions or advertising revenue).

What it’s for: Revenue generated by the licensed display of song lyrics.

Who pays it: Online lyric sites pay publishers.

Who gets the money: Composer, sometimes via publisher


C

10. Ringtones


What it’s for: Generated from licensing your songs/compositions for use as ringtones

Who pays it: Sprint, Verizon, AT&T, etc.

Who gets the money: Composer, sometimes via publisher, label or Harry Fox


C

11. Songwriter awards programs

The rate: $100 and up

What it’s for: Awarded to writer members of any genre whose performances are primarily in venues outside of broadcast media

Who pays it: Both ASCAP and BMI Foundation have programs

Who is eligible to apply: Composers/songwriters who earn less than $25,000 in annual domestic performance royalties money.futureofmusic.org/40-revenue-streams/

C

12. Publisher settlements

The rate: Varies by lawsuit

What it’s for: Payments from publishers to writers for litigation settlements

Who pays it: Entities that lost the lawsuit pay a fee to publishers, which should pass it along to writers and composers whose work was infringed

Who gets the money: Publishers and writers


C

Sound recordings/recording artist

13. Record label advance

14. Record label support

15. Retail sales

16. Digital sales

17. Sales at shows

18. Interactive service payments

19. Digital performance royalties

20. Master use synch license

21. AARC royalties

22. Neighboring rights royalties

23. Film and Secondary Market Fund royalties

24. Sound Recording Special Payments Fund royalties

25. AFTRA Contingent Scale payments

26. Label settlements


RA

13. Record label advance


What it’s for: Paid to artist as part of signing a record deal, usually an advance on future record sales

Who pays it: Record label

Who gets the money: Recording artist


RA

14. Record label support


What it’s for: Money from label for recording or tour support. Usually recoupable against album sales

Who pays it: Record label



RA

15. Retail sales

The rate: Varies based on record label deal. Usually 10-15% of wholesale price, but some labels pay 50%.

What it’s for: Revenue generated from selling physical music (CDs/vinyl) in retail stores or via mailorder

Who pays it: Retail stores pay distributor which pays label, CD Baby for mailorder, or direct from mailorder customers at your own website



RA

16. Digital sales

The rate: Varies. Artists on label may get 10-15% of wholesale price, but some labels pay 50%. Self-released artists get a bigger percentage.

What it’s for: Revenue generated from selling music digitally/online (iTunes, Amazon, Bandcamp, your own site)

Who pays it: Retailers pay labels and aggregators like CD Baby or TuneCore, or direct from customers at your own website


RA

17. Sales at shows

The rate: Varies.

What it’s for: Revenue generated from selling recorded music (CDs/vinyl/cassettes) at shows/live performances

Who pays it: Fans



RA

18. Interactive service payments

The rate: About half a penny per play

What it’s for: Revenue generated when your sound recordings are streamed on on-demand services (Rhapsody, Spotify, Rdio)

Who pays it: Service pays label, or digital aggregator like CD Baby/TuneCore



RA

19. Digital performance royalties

The rate: Varies by platform, but rates are published

What it’s for: Revenue generated when your sound recordings are played on internet radio, Sirius XM, Pandora

Who pays it: Webcasters pay SoundExchange, which then pays labels 50%, featured performers 45%, background musicians and singers 5%



RA

http://www.soundexchange.com/service-provider/rates/commercial-webcaster/

http://www.soundexchange.com/service-provider/rates/commercial-webcaster/

20. Master use synch license fees


What it’s for: Typically licensing an existing sound recording for use in a movie, documentary, TV, video games, internet or a commercial

Who pays it: Movie studio, ad agency, game company, etc.

Who gets the money: Recording artists and labels share a fee for licensed use of sound recording


RA

21. AARC royalties

The rate: It’s complicated

What it’s for: Collected for digital recording of your songs, foreign private copying levies, and foreign record rental royalties

Who pays it: Audio hardware and blank CD manufacturers pay AARC, which then pays performers and record labels

Who gets the money: Recording artists and labels


RA

22. Neighboring rights royalties

The rate: Varies from country to country

What it’s for: Collected for the foreign performance of your sound recordings

Who pays it: Foreign broadcasters pay this money to foreign collection societies

Who gets the money: Recording artists and labels. Note that collecting this money is very difficult because US does not have reciprocal rights


RA

23. Film Musicians Secondary Markets Fund


What it’s for: Paid to performers on recordings made for, or used in, film or TV

Who is eligible: Performers who have worked on recording done under AFM collective bargaining agreement

Who pays it: AFM collects these funds and distributes it to performers who have credits on recording


RA

24. AFM/Sound Recording Special Payments Fund


What it’s for: Paid to performers on recordings based on the sales of recorded music

Who is eligible: Performers who have worked on recording done under AFM collective bargaining agreement

Who pays it: Record labels pay portion of sales revenues to SPF, which then distributes it to performers who have credits on recordings


RA

25. SAG-AFTRA contingent scale


What it’s for: Payments paid to non-royalty artists when a recording hits certain sales plateaus

Who is eligible: Non-royalty artists appearing on recordings that reach certain sales levels in the US

Who pays it: Record labels pay portion of sales revenues to SAG-AFTRA, which then distributes it to non-royalty artists who have credits on recordings


RA

26. Label settlements

The rate: Varies by lawsuit

What it’s for: Payments from labels to recording artists for litigation settlements (MP3.com, Limewire)

Who pays it: Entities that lost the lawsuit pay a fee to record labels, which should pass it along to recording artists whose work was infringed

Who gets the money: Recording artists and labels


RA

Live performance/being a performer

27. Salary as part of an orchestra, ensemble or band

28. Live performance fee/guarantee


P

Session or sideman work29. Session work/freelancer in studio

30. Session work/freelancer on tour

31. AFM/AFTRA Fund

P

27. Salary as member of orchestra, band or ensemble

The rate: No standard rate, but consistent paycheck

What it’s for: Income earned as a salaried member of an orchestra, band or ensemble

Who pays it: Orchestra, band or ensemble

Who gets the money: Performer


P

28. Show or performance fees

The rate: No standard rate, but either a guaranteed fee and/or a percent of ticket sales

What it’s for: Revenue generated from playing in a live setting (for non-salaried players).

Who pays it: Concert promoter, presenter or venue

Who gets the money: Performer


P

29. Session musician/studio fees

The rate: AFM scale, or rate set by freelancer and producer

What it’s for: Payments to studio musicians/freelancers/sideman for work in recording studio

Who pays it: Studio, producer, featured artist or record label, depending on situation

Who gets the money: Session player


P

30. Session musician/live fees

The rate: AFM scale, or rate set by freelancer and producer

What it’s for: Payments to studio musicians/freelancers/sideman for work in a live setting/on tour

Who pays it: Featured artist, presenter, promoter or record label, depending on situation

Who gets the money: Session player


P

31. AFM/SAG-AFTRA payments


What it’s for: AFM/SAG-AFTRA Intellectual Property Rights Distribution Fund distributes recording and performance royalties to non-featured artists

Who pays it: Primarily, this is the 5% that SoundExchange collects from digital broacasters that is then paid to non-featured performers.

Who gets the money: Non-featured performers


P

Knowledge of the craft

32. Teacher

33. Producer

34. Honoraria/speaker fees


KC

32. Music teacher

The rate: Varies/set by teacher

What it’s for: Payment for teaching your musical craft

Who pays it: Students, schools, conservatories, foundations

Who gets the money: Music teacher or performer


KC

33. Producer

The rate: Varies. Could be a flat fee or “points” on a project

What it’s for: Payment for producing another artist’s work in the studio or in a live setting. Sometimes producers also get writing credits for work in studio

Who pays it: Labels, featured artists, studios, presenters, foundations, depending on situation

Who gets the money: Musician or producer


KC

34. Honoraria or speaker fees

The rate: Set by musician and host organization

What it’s for: Payment for conducting a lecture, workshop or master class

Who pays it: School, conservatory, presenting organization

Who gets the money: Musician


KC

Your brand

35. Merchandise sales

36. Fan club subscriptions

37. YouTube partner program

38. Ad revenue

39. Persona licensing

40. Product endorsements

41. Acting

42. Fan funding

43. Sponsorship

44. Grants


KCB

35. Merchandise sales

The rate: Varies by item

What it’s for: Revenue generated from selling branded merchandise (t-shirts, hoodies, posters, etc.)

Who pays it: Fans, sometimes retailers

Who gets the money: Musician or performer


B

36. Fan club

The rate: No standard rate, but usually an annual fee

What it’s for: Money directly from fans who are subscribing to your fan club

Who pays it: Fans and supporters

Who gets the money: Musician or performer


B

37. YouTube partner program

The rate: Not disclosed

What it’s for: Shared advertising revenue generated by plays on YouTube. Can also include plays of user-generated content that uses your music, as identified by YouTube’s Content ID program

Who pays it: Advertisers pay YouTube, which passes along money to rightsholders

Who gets the money: Rightsholders: record labels, artists money.futureofmusic.org/40-revenue-streams/

B

38. Ad revenue

The rate: Varies

What it’s for: Miscellaneous income generated by your website properties (click-thrus, commissions on Amazon sales, etc.)

Who pays it: Advertisers, services that offer commissions

Who gets the money: Musicians


B

39. Persona licensing

The rate: Varies

What it’s for: Payments from a brand that is licensing your name or likeness (video games, comic books, etc)

Who pays it: Advertisers, video games, lifestyle brand companies



B

40. Product endorsement

The rate: No standard. Sometimes payment is free product instead of cash

What it’s for: Payments from a brand for you endorsing or using their product

Who pays it: Music instrument manufacturers, beverage companies, other companies



B

41. Acting


What it’s for: Payments for appearances in TV, commercials, movies

Who pays it: Movie and TV producers



B

42. Fan funding


What it’s for: Money raised directly from fans to support or pre-sell an upcoming recording project or tour (Kickstarter, IndieGogo, Pledge Music)

Who pays it: Fans and supporters



B

43. Sponsorship


What it’s for: Corporate support for a tour, or for your band/ensemble

Who pays it: Companies/corporations



B

44. Grants


What it’s for: Foundation or public arts grants to support your work/project

Who pays it: Foundations, arts councils, endowments, state or federal agencies

Who gets the money: Performers, composers, ensembles, collaborations


B

Songwriter/producer/

arranger fees

50%

Mechanical royalties

5%

Sheet music licensing

5%

Synch licensing fees

10%

PRO royalties

25%

Ringtone licensing

5%

Years active: 1994-present

Roles: Songwriter, producer, arranger

Percent of time: 100%

Percent of income: 95%

Genres: R&B, hip hop and pop

2010 Activity: wrote about 450 songs to pitch to artists, participated in 50 writing sessions, worked with 25 different recording artists

Producer and songwriter: gross income 2010-11

money.futureofmusic.org/case-studies/

Publisher support25%

Merchandise sales10%

Live performance fees25%

Record royalties10%

Record label support 30%


Roles: Recording artist, composer, performer, producer



Genres: indie rock, pop

2010-11 Activity: One recording, 50-100 live performances

Recording artist: gross income 2010-11


Teaching

10%

CD sales on the road

6%

Live performance fees

62%

Record label advance

7%

PRO royalties

5%

Composer commission

7%

Session musician

2%

Years active: clients range from fewer than 10 years, 10-20 years, 30-40 years

Roles: Recording artist, composer/ arranger, performer, band leader, producer, side musician, educator



Genres: jazz

Typical 2010 Activity: One recording, 40 live performances

Jazz manager: gross income 2010-11



Roles: Performer, session musician, producer, bandleader, songwriter, journalist, label owner



Genres: country, bluegrass, rock, jazz

2010-11 Activity: 1 album as leader, produced 2 albums, 30-40 recording sessions, 40 live performances

Nashville session player: gross income 2010-11

Record sales

11%

Session player: studio

30%

AFM/AFTRA Fund

4%

AFM Secondary Markets Fund

4%

SR Special Payments Fund

6%

Producer

22%

Live performances

17%

Digital performance

royalties 3%

Mechanicals and

PRO royalties 3%


Live performance fees:

City Opera salary

46%

AFM/AFTRA Fund

1%

AFM Secondary

Markets Fund

7%

Freelance performance fees

14%

Live performance fees:

City Ballet sub

28%

Session player: studio

fees for film music

3%

Teaching

1%


Roles: Performer, session musician, teacher



Genres: classical

2010 Activity: 5-10 recording sessions, 150-200 live performances

Classical performer: gross income 2010-11


Sideman: live, in studio, on TV

71%

Administrator/Curator 25%

TV Residuals 1%

Live performance (Leader)

1% Mechanical royalties

1%

Sound Recordings Special Payments Fund

1%


Roles: Performer, producer, session musician/freelancer, composer



Genres: contemporary classical, jazz, indie, americana

2012 Activity: 6 recordings, 75 shows with 12 different groups

Freelance violinist: gross income 2012


Recording sales royalties

52%

Digital performance

royalties 48%

Years active: 1990-1997

Roles: Performer, recording artist, songwriter

Percent of time (now): 5%


Genres: indie rock

2012 Activity: collected royalties on 4 albums

Retired indie rocker: gross income 2012


Live Performance

30.5%

Salary 29.8%

CD Sales on the Road

12.1%

Publishing Royalties

9.4% PRO

Royalties 6.2%

Publishing Advance

5.6%

Record Sales 3.5%

Session Musician

1.5%

Producer 0.7%

TV Royalties

0.4%

Indie rock composer/performer: gross income


Roles: Performer, composer, session/sideman work



Genres: rock, world, avant, folk rock


Chamber music ensemble: gross income 2002-10

Years active: 1997- present

Roles: Performer, session/sideman work



Genres: classical, new music, contemporary jazz


Live Performance

77.8%

Grants and Awards 7.5%

Record Label Advance

5.0%

Commission 2.6% Sideman

1.8% Record Sales 1.7%

PRO Royalties 0.8%

Other 2.8%

Jazz bandleader: gross income 2001-11


Roles: Composer, performer, bandleader, session/sideman work, teacher



Genres: jazz, classical, hip hop


Salaried orchestra player: gross income 2001-11


Roles: Performer, session/sideman work



Genres: classical

Salary: orchestra

64.8%

Freelance: live 27.3%

Knowledge of Craft 3.1%

Freelance: studio 1.9% Prize Money

1.8%

Recording Income 0.8%

Radio Royalties

0.3%


Sideman: Performance

32.4%

Live Performance 15.0%

Administrator 14.9%

Grant 11.6%

Teaching 10.5% Sideman:

Performance + Organizer

8.0%

Sideman: Recording

4.3%

PRO Royalties 2.1%

Recording 0.9%

CD Sales on the Road

0.4%

Jazz sideman: gross income 2004-10


Roles: Performer, composer, bandleader, session/sideman work, administrator, consultant, teacher



Genres: jazz, contemporary classical, world music


Revenue streams have become atomized.

More important than ever that creators understand how the money flows back to them as songwriters and recording artists.

Mechanical royaltiesStreaming mechanicalsMechanicals for cloud storage, lockersCommissionsComposing original works for broadcastSheet musicLyric displayRetail salesSales at showsDigital downloadsCloud storage paymentsDigital performance royaltiesInteractive service paymentsYouTube partner programSynchsPerformancesSession workMerchandisePersona licensingFan fundingSponsorshipsGrants

ResourcesArtist Revenue Streams

Research

money.futureofmusic.org

42 Revenue StreamsRevenue Streams: Existing,

Expanded, New

money.futureofmusic.org/40-revenue-streams/ money.futureofmusic.org/revenue-streams-existing-expanded-new/

Resources

HOW THE MONEY FLOWS BACK TO

songwriters, artists,publishers & labels

songwriter

broadcast radio terrestrial broadcast of any AM or FM station

PROs ASCAP, BMI, SESACCsongwriter

publisherperformance of composition

performance of sound recording

How are musicians and songwriters compensated when their music is played on the radio, sold on digital platforms,

webcast, or streamed on interactive services?

For digital stores and on-demand streams, how the money flows depends on what entity negotiated the license.

For record labels that are represented by a digital aggregator/distributor:

For artists who own their sound recording copyrights and use services like CD Baby or TuneCore:

In the US, terrestrial broadcasters do not pay performers or sound recording copyright owners

For record labels that have a direct deal with services:

digital saleiTunes • Amazon

Google Play • eMusic

SR record label artist/band*

mechanical reproduction of composition

sale of sound recording

publisher songwriter

10-50%

9.1¢/track

* Rate of payment from label to artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

0.5% Sound Recording Special Payments Fund #

# Labels contribute a small percent of sound recording sales income. If recording was made under the AFM’s recording agreement, payments are disbursed to musicians who were paid scale wages during the recording session.

musicians

SR aggregator

artist/band*

mechanical reproduction of composition


publisher songwriter

IODA/The Orchardrecord label

9.1¢/track

@50%

85%

SR only relevant if performer recorded + released songs written by others


publisher songwriteraggregator artist/bandCD Baby or TuneCore

91-100%

AFM & SAG-AFTRA Fund

webcast or digital performance

Pandora • Sirius XM • NPR streamingany webcast stations

PROs ASCAP, BMI, SESAC*C

SR SoundExchange

songwriter

publisher

record label

performer(s)

50%

45%

5%

performance of composition

digital performance of sound recording background singers and musicians

* At the end of 2012, Universal Music Publishing Group and Sony/ATV-EMI pulled their digital rights from ASCAP and BMI, seeking to get a higher rate by negotiating directly with webcasters.

UMPG and Sony ATV-EMI* UMPG and Sony ATV-EMIsongwritersC

songwriter

songwriteron-demand

streamSpotify • Rdio • Rhapsody

SR record label artist/band*

streaming mechanical royalty

licensed use of sound recording 10-50%

10.5%

minus payment to PROs

PROs ASCAP, BMI, SESACCpublisher


publishers

UMPG and Sony ATV-EMI*C * At the end of 2012, Universal Music Publishing Group and Sony/ATV-EMI pulled their digital rights from ASCAP and BMI, seeking to get a higher rate by negotiating directly with services.

UMPG and Sony ATV-EMIsongwriters

licensed use of sound recording

PROs ASCAP, BMI, SESACsongwriter


SR aggregator

artist/bandIODA/The Orchard

record label 50%+

85%

on-demandstream

Spotify • Rdio • Rhapsody streaming mechanical royalty

songwriterpublisher*

C

streaming mechanical royalty

licensed use of sound recording

PROs ASCAP, BMI, SESACC

songwriter


SR aggregator artist/bandCD Baby or TuneCore

on-demandstream

Spotify • Rdio • Rhapsody

* Services pay streaming mechanical royalties to big publishers directly, or to a mechanical licensing agent like Harry Fox, Songtrust or Music Reports, which then pay their publisher members/clients. Because it is very burdensome for self-published songwriters to collect these royalties, both CD Baby and TuneCore have set up services to help self-published songwriter clients to collect them.


* Services pay streaming mechanical royalties to big publishers directly, or to a mechanical licensing agent like Harry Fox, Songtrust or Music Reports, which then pay their publisher members/clients. Songwriters need to be proactive in seeking out this revenue.

mechanical licensing agent or publisher*

publisher*

Information compiled by the nonprofit Future of Music Coalition, with gracious assistance from many experts and friends.

Poster edition: September 2013www.futureofmusic.org | money.futureofmusic.org

© Future of Music Coalition 2013

Artist Revenue Streamsmoney.futureofmusic.org


mechanical licensing agent or publisher*



big labels

indie labels

self-released

10.5%


9.1¢/track

10.5%


91-100%

For radio and radio-like services, blanket licenses determine who gets paid, and how much.





Music and How the Money Flows infographic

futureofmusic.org/moneyflow

New Business ModelsDigital Distribution

and how to participate

futureofmusic.org/nbm futureofmusic.org/dd

For composers and publishers

www.ascap.com www.bmi.com

www.sesac.com www.harryfox.com

http://www.ascap.com

http://www.ascap.com

http://www.bmi.com

http://www.bmi.com

http://www.sesac.com

http://www.sesac.com

http://www.harryfox.com

http://www.harryfox.com

www.soundexchange.com

For performers and sound recording copyright owners

http://www.soundexchange.com

http://www.soundexchange.com

For performers

www.raroyalties.org www.fmsmf.org

http://www.raroyalties.org

http://www.raroyalties.org

http://www.fmsmf.org


For performers

www.sound-recording.orgwww.aarcroyalties.com



http://www.aarcroyalties.com

http://www.aarcroyalties.com

Kristin Thomson@[email protected]

Future of Music Coalition@future_of_musicwww.futureofmusic.orgmoney.futureofmusic.org

mailto:[email protected]

mailto:[email protected]

http://www.futureofmusic.org

http://www.futureofmusic.org