There are many people chasing empty dreams in the music industry. They will endlessly pursue the societal glory of landing placements for major artists, meanwhile the reality of the songwriter grind is that most writers never get to work with Chris Brown or Drake.
The independent songwriter hustle is extremely taxing – mentally, emotionally, physically and financially. Don't believe what you see on Instagram.
You will need to sacrifice friends, family, romantic relationships, vacations, partying and most aspects of regular life if you're serious about turning your dreams into a reality.
Very Important Note: Just because you're "working" in the music business, does not actually mean you will get paid. If you can't grasp the concept of working for value exchanges, you should quit while you're ahead.
While there are other songwriter "hubs" in North America such as Los Angeles, Nashville, Atlanta, and Toronto – this essential guide comes from the perspective of a NYC grinder.
10 WAYS TO MAKE MONEY WRITING SONGS
- Earn Song Placements (Sync Licensing)
- Earn Performance Royalties
- Earn Mechanical Royalties
- Earn Digital Album/Song Sales
- Get Your Songs Placed With "Major" Artists
- Get a Publishing Deal (Label Advance)
- Get Paid For "Demoing" Songs
- Write Songs for Upcoming Artists
- Vocal Produce Upcoming Artists
- "Work For Hire" Gigs
These are the top 10 ways to make money as a songwriter.
For the purpose of this guide, we'll touch upon all of these methods, but in-particular we'll be going deep on the various types of songwriter royalties that exist as passive revenue sources.
HOW MUCH DO SONGWRITERS MAKE?
According to Glassdoor, professional songwriters can earn an annual salary of $65,000.
I'd caution against this data point for many reasons. Personally, I don't know any songwriters earning $65,000 annually.
It might be possible if you've got a corporate gig writing commercial jingles.
It's definitely possible if you've landed a couple of major placements or sync deals.
But I don't believe it's possible if you're in the early stages of the independent songwriter hustle.
Deeper into this guide, you're going to learn why it's damn near impossible to earn $65,000 a year from streaming revenue.
As a songwriter, the greatest earning potential exists in the sync licensing game. You'll learn more about that soon.
HOW I GOT STARTED WITH PROFESSIONAL SONGWRITING
I started by offering my songwriting services to singers for free. In return, I asked them to record demos of my own music.
I couldn't sing (at the time), and needed vocalists to record song references for me.
Eventually, I learned how to sing (well enough to record my own reference vocals), but I learned that's all you really need.
From there, I began offering my services as a songwriter to upcoming artists in exchange for free recording studio time.
Here's how it all works:
- Give upcoming artists free songwriting help.
- Go to their recording sessions and help them with their songs.
- In exchange, they would give me extra recording hours from their budget.
- Essentially, they would pay for me to have a few hours of extra studio time at the end of their sessions. Win-win.
In the early stages, I knew that optimizing my career around short-term money wasn't the right move, and that I'd be better off sharpening my skills and building connections.
Eventually, my "stock price" increased once I became a more proven, better songwriter.
HOW MUCH SHOULD YOU CHARGE AS AN UPCOMING SONGWRITER?
Short answer: it depends on your career level and experience.
But to give you an idea, here's what I started charging for my songwriting services:
- $250 for hooks
- $500 for full songs
- $50 for hourly writing support.
From there, I became more proven and began doing "work for hire" songwriting gigs, starting at $1,200 a song.
MUSIC PRODUCERS: THE PERFECT PARTNER FOR SONGWRITERS
Music producers are often seeking to partner up with singer-songwriters and lyricists in order to transform their beats into original songs. Otherwise, they're just selling beats online via websites like BeatStars, etc.
Now that's fine, however many producers want to go beyond just selling beats. They want to bring their music to life in the form of a finished product e.g. a fully completed record.
On the flip side of that equation, lyricists need instrumentals to write to. You see where I'm going with this?
You need to form strategic alliances with music producers early in your songwriting career. The opportunity to build your music catalog and play the long game is tremendous if you can foster strong relationships with talented music producers.
You should never forget that a song always has two main components:
- Lyrics (50%)
- Music (50%)
The producer composes the music and represents ½ of the song. Now what about the other half? That's you, the songwriter/lyricist, who provides lyrics and melodies which brings the record to life. Otherwise, it's just a beat.
Can't find producers to work with?
You better get on social media platforms like Instagram, YouTube, SoundCloud, etc. and start messaging producers. If you send 30 thoughtful and purposeful cold emails / DMs per day, I guarantee someone will be willing to work with you.
Wanna practice your songwriting skills on some free beats?
Alternatively, my homies at Legion Beats are offering FREE BEATS for songwriters, if you need somewhere to get started fast.
DO YOU NEED A PROFESSIONAL RECORDING STUDIO?
If you are submitting original songs for licensing / sync opportunities and major placements, then yes, a fully produced record with "radio ready" mixing and mastering is expected.
However, for recording the majority of your ideas and drafts, a home studio will be just fine. If you want to go super budget friendly, you can even record directly into your iPhone using GarageBand.
Imagine Jimi Hendrix playing a $200 guitar vs. a $2,000 guitar. His raw talent is so remarkable, that no one would be able to tell the difference.
Same goes for singer-songwriters and lyricists. Focus on perfecting your craft, and don't get caught up over-thinking you need a super extravagant set-up in order to be successful.
WHY DO SONGWRITERS HAVE TO PLAY THE LONG GAME?
The process of doing the same thing over and over again for an extended period of time (7+ years and counting) has allowed me to capture a solid base of clients who value my work and will happily pay for my services.
I believe you can repeat this process in any industry you want to thrive in: real estate, financial services, tech, marketing, etc.
However, please understand: most people are going to be very negative when you tell them you're pursuing a songwriting career.
They're probably not going to be supportive. This includes friends and family. They're going to roll their eyes, and tell you to "get a real job."
Don't listen to them. You need to be mentally tough and fight off the negativity, otherwise you'll fail.
If you work hard, remain consistent, and build your network through value exchanges over a sustained period of time, you will gain traction and start to elevate in your career.
Conversely, you need to be realistic: are you building a music career? Or an expensive, time-consuming hobby?
WHAT IF YOU CAN'T SING? CAN YOU STILL BECOME A GREAT SONGWRITER?
You don't need to be Beyonce in order to win a Grammy!
You don't even need to know music theory or chord progressions (although it helps).
You just need to understand song structure, how to relate to your audience, and trigger an emotional response with your music.
If you can't sing, don't let that discourage you. There are always workarounds. However, if you're a singer-songwriter combined into one, then you definitely have an advantage.
In order to be a great songwriter, you need the following:
- Vision!
- Knowledge of "what's trending" in your respective markets.
- Deep understanding of the audiences you're trying to reach.
- Network of contacts across creatives, publicity and law.
- Resiliency, consistency, and of course – a little bit of luck.
However, the music industry doesn't work like the corporate grind.
Let's use tech sales as an example:
- Imagine that every month, you bust your ass and hit your sales quota.
- Because you earned the most sales, you became the top performing sales rep.
- Therefore, you earned the highest commission check.
- Songwriting doesn't work like that. There is no ladder to climb. There is no linear path to success!
You better be prepared to hustle, otherwise this business is not for you. 💯
EXAMPLES OF SONGS I'VE WRITTEN:
- Lisenny – Bad to Buena
- Dos Inmigrantes – Guardala / Mirala
- Dos Inmigrantes – Italian Trap
- Juni Mambo King – Cookies
- Tina Torres – Sonrie
- Jack Thriller – All Night
- Phoenix Joans – Saucey
BUT WAIT, YOU DIDN'T WRITE FOR DRAKE?
Let's just call this out right now.
Why don't you see names like Drake, Jason DeRulo, Tory Lanez, Rihanna, Nikki Minaj and Natti Natasha on my list of accomplishments?
Because you can't just write for those artists! It's really f*cking hard to get into those circles.
Even if you're the best songwriter/lyricist in the world, and you have a catalog of hit records sitting on your hard drive – unless you have a way of getting those songs directly to the major artists, they're not going to be heard.
Sure, you can participate in the "chasements" rat race. Good luck!
Or, you can invest in developing emerging talent and create your own independent success from the ground up. This is my preferred route.
WELL THEN, HOW DO SONGWRITERS GET "PUT ON"?
Reality check: it won't happen. Sorry.
You're never gonna wake up one day and magically get "put on."
The major hit songwriter circle is a heavily guarded community which is damn-near impossible to crack. Millions have tried, few have succeeded.
Why? Because the gatekeepers at the top don't really want more songwriters infiltrating the inner circles. That would mean less money to go around for the top sharks.
Most hit songs already have way too many writers. It took 10+ songwriters to create Cardi B's "I Like It" (one of the biggest hit records ever).
So now that we've called out the elephant in the room, let's look at how we can create our own paths to music career success.
As songwriters, no matter what level we've reached in our career, we play a deeply intricate role in developing upcoming artists.
10 WAYS SONGWRITERS CAN HELP UPCOMING ARTISTS:
- Setting a comfortable creative atmosphere.
- Delivering song arrangements.
- Writing catchy hooks and lyrics.
- Developing killer top-lines.
- Helping artists find the right melodies, flow and delivery.
- Helping artists find the right beats and instrumentals to select.
- Providing encouragement and positively constructive feedback.
- Playing a part in the content promotion & distribution process.
- Making introductions to key connections and relationships.
- Simply, being a fan.
DO YOU NEED "NATURAL TALENT" TO BECOME A GREAT SONGWRITER?
Making money from your songwriting skills is very much like basketball.
Think about Michael Jordan, LeBron and Kobe (RIP).
We typically see these incredible athletes in their most extraordinary form, but we rarely see the "behind the scenes" work.
Yes, they were born with God-Given abilities, but they didn't unlock the highest level of professional performance without working extremely hard.
Of course, they were born with certain traits and physiological advantages.
But most remarkable talents are not born with the same gifts as Jordan, LeBron and Kobe.
When it comes to songwriting, you should be brutally honest with yourself.
Will I ever be the Kobe Bryant of songwriting? Probably not.
Even the singer-songwriters with the strongest work-ethic in the world may fail, because they lack the God-Given ability to create undeniable music.
You also need some luck. The dominoes need to fall in your favor in order to become a successful songwriter in the music business. Anyone who tells you otherwise is lying.
THE JEREMY LIN EXAMPLE
For argument's sake, let's assume that your songwriting talent is the equivalent of a 6th man, or a role player. As a 6th man, you're on the bench, waiting for your opportunity to be called.
- Did the 6th man practice?
- Did the 6th man work hard?
- Did the 6th man earn his spot on the team?
- Did the 6th man get drafted to the NBA?
Yes, so he must be talented.
But talent isn't the only thing that got Jeremy Lin to the NBA.
It was the intersection of when preparation meets a viable opportunity. Often, this is a climatic moment in a person's career.
Second chances are rare. If you brick on the first shot, you may never get another chance.
Think about Jeremy Lin's breakout moment when he was on the Knicks:
Jeremy Lin had massive potential all along, but he had to wait for his big moment.
As a backup player, you need to be patient and wait for that opportunity to shine. Being stuck on the bench can be frustrating, but that's how the game works.
Your songwriting skills alone will not make you successful. Even if you are the best.
If you need to improve your songwriting skills, I'd highly suggest working as a co-writer and collaborating with other co-writers who are more advanced than you.
WHAT IF I WRITE 10 SONGS PER DAY? WILL THAT INCREASE MY CHANCES OF SUCCESS?
You can write 10 songs per day, or 1 song per day. Volume of output does not correlate to career success, sorry to tell you.
None of that will matter if the coach doesn't believe in you.
The secret to success in the music game is about unlocking doors and figuring out ways to be presented with the right opportunities, from the right people, at the right time!
Going back to Jeremy Lin. When he was on the bench, no one really cared about him.
After he hit that game winning 3-pointer against the Raptors, look at what happened to his career.
Same thing applies when it comes to your songwriting career. Once you land your first hit record, that's when significant "life-changing" income streams will be generated across various channels.
Examples of Revenue Streams for Songwriters
- Royalties
- Brand Partnerships
- Sponsorship Deals
- Advertising Revenue
- Merchandising
- etc
Ultimately, you need to understand that value brings you money, not talent.
To summarize – most of the people reading this guide are probably awesome songwriters, but lack the right opportunities.
Your job outside of being a great songwriter is learning how to find, create and position yourself for those big opportunities, just like Jeremy Lin.
DO SONGWRITERS NEED A MUSIC PUBLISHING DEAL?
The payout system or royalties paid to an independent songwriter versus a "signed" songwriter is going to be vastly different.
The long-term benefits for independent songwriters are obvious:
- More control.
- More ownership.
- More freedom.
- Higher payouts.
However, it will probably take longer to "make it" via the independent route. There's no right way or wrong way to go about your music career. Ultimately, you need to do what's best for you.
At the end of the day, you can be successful without getting signed to a music publishing company, but you'll need to work harder if you're on the independent grind.
THE ROLE OF MUSIC PUBLISHING COMPANIES FOR SONGWRITERS
The music publisher's job is to ensure that songwriters and composers GET PAID when their works are used for commercial purposes.
That being said, the role of the music publisher goes far beyond money. Publishing companies can also serve as recruiters for attracting top talent. Specifically, publishers will often seek recording artists that can produce chart-topping hits.
Synchronization royalties are collected when a publisher successfully lands a "placement" for an artist or songwriter it represents.
If you get signed, the music publishing company will become a critical component of your songwriting career.
As a writer, if you have total confidence in the team responsible for managing your copyrighted music, you're going to have peace of mind and create your best work.
There's a ton of administrative legwork involved in the publishing game: collecting royalties, distributing payments, fighting for your best percentages, etc.
Handling domestic and foreign royalties are also essential in a professional songwriter's career.
If you're a bi-lingual writer like me, this is critical. Here's an example of a bi-lingual song I wrote in Spanish / Italian.
However, these are murky waters to navigate. A major benefit of getting signed to a publisher is that they'll manage most of this for you.
Keep in mind, you shouldn't get too caught up over advances and upfront money. This isn't a free pay-out by any means. It's more like a loan, which is recoupable against your royalties. It also means that if you don't produce revenue, you will go into debt.
It's about unlocking access to opportunities and working in partnership with your publisher to develop long-term plans for your songwriting career. Landing a publishing deal is often a once in a lifetime opportunity.
THE ROLE OF RECORD LABELS FOR SONGWRITERS
Freedom vs. Control. What's more important to you?
Please understand that even if you land a meeting with a record label, it's likely that nothing will happen.
Most record labels are looking for artists and writers who are already "buzzing" from a recent viral song that blew up on YouTube.
Remember, momentum equals leverage when you're dealing with labels. However, if you're riding purely on songwriting talent, you need to be focused on delivering hit records.
Labels often prioritize signing the most dynamic and sonically well-rounded songwriters who can create hypnotizing top line melodies and write that next smash hit.
Sure, you can build your own music catalog of records that have sentimental value to you personally, but be aware that if you sign to a label, they don't really care about your feelings. They care about your ability to make money for them.
Now, you may be a recording artist with a remarkable pen game. However, in many cases, the label may not be ready to prioritize the release of your music.
This means you should be co-writing with fellow producers, writers and artists within the label ecosystem to create amazing records. This not only boosts your street cred, but will put some coin in your pocket.
Earning credibility will unlock opportunities to write with other hit songwriters and producers. This is the ultimate prize.
If you don't flex your songwriting muscle, you might be perceived as a "one-trick-pony" or worse, someone with poor work ethic, which will hurt your reputation within the organization.
DO RECORD LABELS CONTROL SONGWRITERS?
"Many times, there is a stipulation in the artist's agreement stating that if the artist writes a song, the record label will only pay them at the minimum amount paid for mechanical royalties (the minimum statutory rate). The stipulation may also say that they will pay only a percentage of the minimum amount paid for mechanical royalties (75% of stat, 50% of stat, etc.) The stipulation is called a Controlled Composition Clause (also controlled comp) $0.091 is the statutory rate for mechanicals at 5 minutes and over five minutes, the minutes are rounded up to the next minute and the rate becomes $0.0175 per minute. If the agreement says that they will pay 75% of the minimum statutory rate, if the writer writes 100% of the song (all words and music), the record label will only pay them $0.06825 for the song. Now, sometimes the controlled comp will add a cap." – Mark S. Dunn via Quora
Confusing as shit, right? Yup!
Get a lawyer! Don't let "the homie" or someone you trust allow you to sign something you don't understand. Pay out of pocket to get an expert legal counsel.
DO NOT BE CHEAP! Pay for the consultation so you aren't ranting on Twitter about how labels are taking advantage of you, or "tricked" you into signing a crappy deal, because it will come back to bite you in the ass later on.
BREAKING DOWN PERFORMANCE RIGHTS ORGANIZATIONS (PROS):
Before I break down each PRO, you should acknowledge there are 3 giants who dominate the industry, and all of them pretty much do the same things.
Don't get me wrong, there are a few select differences with regard to the signups fees and benefits within each PRO once you are signed up as a member, along with how the payout structure works within each PRO.
At the end of the day, don't let this be a huge brain scrambler for you. Especially in the beginning of your songwriting career, just pick something and get to work.
Your grind, work ethic and ability to create opportunities are far more important than nit-picking over which PRO you want to join.
Also keep in mind that some of them are invite-only. For the purpose of this guide, we'll focus mainly on PROs located in North America.
Finally, if you are a songwriter or an owner of a recording copyright, make sure you have a relationship with ASCAP, BMI or SESAC along with SoundExchange.
ASCAP: WHAT IS IT? HOW DOES IT WORK?
American Society of Composers, Authors and Publishers – simply dubbed in the community as {ASCAP} is an American performance-rights organization {PRO} that essentially protects your copyrighted song once it's written and/or released to the public.
ASCAP offers amazing membership perks. ASCAP is well-known for hosting amazing music events, meetups and workshops. As an upcoming songwriter/lyricist, it would greatly behoove you to take advantage of these networking opportunities.
ASCAP also offers some exclusive benefit packages that include health and instrument insurance, a credit union, along with discounts to music equipment and accessories.
Knowing what PRO represents your favorite artist/musician is usually what drives new members to sign up.
Of course, you can't be affiliated with two PROs, so choose wisely. However, also keep in mind that in the early stages of your career, you shouldn't get too hung up on which PRO you want to join.
DO YOU NEED TO MANUALLY COPYRIGHT ALL YOUR SONGS?
You don't need to do the "poor man's copyright method" of mailing your music to the U.S. copyright offices in Washington.
That was once a thing, but that was back in the dinosaur ages.
Today, a copyright for your music is auto-generated whenever a tangible product is born.
Whether it be an audio recording, session files, or export of a finished MP3 – it's technically copyrighted from the moment it becomes a live product.
This means physically recording a new song in a recording studio, or writing your own music on a single sheet of music with pen & paper – this warrants a copyright.
Here's a great post from Gabe at Legion Beats:
And Yes, Samples MUST be cleared by the owner of the original copyright!
My advice would be to prioritize creating 100% original music!
If you do not clear the copyright, it's very possible that YouTube and other digital distributors will remove your content.
Let's also not forget what happened to Robin Thicke and Pharrell – they were ordered to pay $5 Million Dollars in damages to the Marvin Gaye family for ripping off "Got to Give it Up."
BMI: WHAT IS IT? HOW DOES IT WORK?
Broadcast Music, Inc. {BMI} is another one of the major American performing rights organizations {PROs} along with ASCAP and SESAC.
BMI, along with ASCAP and many others are caught in the middle of a major legal battle between songwriters and the streaming companies. The PROs often get caught in the crossfire of performance and mechanical licensing issues. Until songwriters are given their fair share, I don't see these conflicts ending anytime soon.
I've always admired BMI's commitment to the Latino community along with other cool events they've hosted such as "How I Wrote That Song."
BMI award shows are another great source of inspiration for indie songwriters.
BMI, just like the other PROs, collect licensing fees from songs you allow to be leased from your songwriting catalog.
BMI will collect fees from businesses that use music on behalf of the songwriters, composers, and music publishers. Essentially, they will protect with the copyright you've created.
Once you've signed up as a member and register your songs, BMI will pay out royalties as a sum of money on a quarterly basis to those members whose works have been performed (used) for commercial purposes.
Ultimately though, when it comes to BMI vs. ASCAP, this is the best video I have seen on the subject.
SESAC: WHAT IS IT? HOW DOES IT WORK?
Society of European Stage Authors and Composers is known exclusively as SESAC.
SESAC is interesting because unlike the other PROs, it has a high degree of exclusivity due to its invite only policy.
Therefore, the only way to get into SESAC is by knowing a current member or representative who would be willing to vouch for your membership.
If the phrase "quality vs. quantity" ever mattered, SESAC is the place. While SESAC is the smallest of the U.S. performing rights organizations, size is its competitive advantage.
SESAC prides itself on developing strong individual relationships with both songwriters and publishers. Although ASCAP and BMI operate on a non-for-profit basis, SESAC & Pro Music Rights keep some income as profit.
While ASCAP, BMI, & Pro Music Rights distribute all income from performance royalties to their composer and publisher affiliates (less an administrative fee), SESAC retains an undisclosed amount of performance royalties. Most songwriters will never know what that fee is, because most songwriters will never become members of SESAC.
PRO-MUSIC RIGHTS: WHAT IS IT? HOW DOES IT WORK?
Pro-Music Rights (PMR) essentially follows a similar path as ASCAP, BMI and SESAC when it comes to synchronization opportunities, with the basic concept of owning rights to your music which can be licensed for commercial use across Radio, TV, Streaming Platforms and more.
It helps songwriters earn a living by licensing public performances of their songs, collecting fees on behalf of the writers and distributing the appropriate royalties.
The backstory on Pro-Music Rights (PMR) is a fascinating one. They are a newcomer to the game, and essentially they are taking a "new guy on the block" approach by building strong connections with heavyweight songwriters and recruiting them as new members.
Meaning, most of their members have abandoned their previous PRO to team up with the new guy.
They own about 8% of the U.S. market share and represent some of the most notable acts in music, such as A$AP Rocky, Wiz Khalifa, Young Jeezy, Pharrell, Nipsey Hussle (RIP) and many other impressive names.
PMR hasn't been around nearly as long as the other PROs, but they came in making tons of noise within the music publishing world along with the capital to back it up.
They've got extensive knowledge of syncs & licensing placements for their current members and new opportunities for future members.
PMR is working diligently to ensure their position and acceptance in the PRO world, and they've got a beast of a legal team in their corner.
In fact, they've filed an antitrust lawsuit against the "entire music industry" on the basis of their publishing departments claiming the other major PROs are using mafia style tactics to thwart them from being able to use the licensing rights on about 2 million works (songs) from artists like Wiz khalifa, A$AP Rocky, Fall Out Boy and many others.
"We have to be aggressive against the music industry, just as Global Rights Music is forced to do against the Radio License Committee" – PMR Founder and CEO, Jake P. Noch.
GLOBAL MUSIC RIGHTS: WHAT IS IT? HOW DOES IT WORK?
There is a less talked about organization called Global-Music Rights {GMR}, however they are invite-only and focus on a very small, high grossing tier of elite songwriters.
They are more like an activist group for songwriters rights, and are emerging fast and furiously. Most new songwriters will not become affiliated with them, but it's still good to be aware of who they are and what they do.
{GMR} prides themselves on being the first U.S. established PRO in 75 years since earlier, better known predecessors – BMI & ASCAP.
It was founded in 2013 with self proclaimed quotes like:
"We are the alternative to the traditional performance rights model," says founder Irving Azoff, a music industry veteran.
GMR typically focuses on the international licensing needs, and they've crafted an impressive network of relationships that deal with foreign PROs.
As you become more advanced in your career as a songwriter, you will need to understand that the fees, royalty payouts, copyrights, copyright laws and licensing deals operate much differently overseas than those in the USA, so having transparency from your administrators is huge in acquiring the right knowledge.
GMR states that administering fair payouts for their small, but high profile clientele is an absolute top priority.
WHAT ARE MECHANICAL ROYALTIES? HOW DO THEY WORK?
Digital Mechanical Royalties are generated by digital distribution of your songs. These royalties are paid to songwriters by streaming services like Spotify, Apple Music, iHeartRadio, etc.
Essentially, these are royalties paid for every single stream that's generated any income. Royalties from single / album sales are counted as well, but let's be real – who buys music nowadays? Sadly, no one.
Songwriters must understand that it takes tens thousands of streams in order to generate significant income, because of the absurdly low payouts per stream.
Back in the day, this came from CDs being pressed!
Every time a record label pressed a CD with your song on it, a mechanical royalty was paid out to the publisher or copyright administrator of the song.
Capturing your value and talent as a songwriter is reliant upon knowing how each digital distributor works, and how they pay you.
We'll start by focusing on the most important platforms which dominate the U.S. market share.
WHICH PLATFORMS DOMINATE THE STREAMING MARKET?
Spotify, Apple Music, Amazon and YouTube are the most important streaming platforms of this new digital era.
Spotify has captured the biggest slice of the pie at 35% of total market share.
If your songs start to earn streams and sales, you'll get a quarterly check or direct deposit, no different than any corporate job.
You should also be aware that Apple Music, Spotify, Tidal, etc. are not paying out the same percentages per song played or streamed.
Breakdown of Streaming Payout Rates by Platform
WHAT ARE PERFORMANCE ROYALTIES? HOW DO THEY WORK?
Your PRO tracks the sales of live performance royalties, meaning whenever your music is performed publicly. Fees will accrue as your music gets played in shopping malls, live venues, clubs, bars, restaurants, supermarkets, fitness centers, outdoor arenas, block parties, etc.
Businesses need to acquire a license of the copyright for commercial usage of your song on radio, talkshows, TV, live events, etc. – even karaoke! If they don't, they could be sued for playing unlicensed music.
And as you might have guessed, performance revenues have been hit hard due to COVID-19.
Performance royalties are paid quarterly just like mechanical fees, but it depends on the timeline of the release and how much momentum the song carries.
For example, say one of your songs went viral in July 2020, and the demand for your song carried through until September 2020.
But then, after September your song wasn't popular anymore. This would absolutely impact your revenue from performance royalties, and it would reflect accordingly in your quarterly check.
To summarize – if your song ain't poppin, you ain't gettin paid.
WHAT IS SYNC LICENSING: HOW DOES IT WORK?
Film producers, music supervisors, content creators and top brands are always searching for theme songs to feature on their new shows, new commercials or big budget Hollywood movies.
All of the big licensing clients work with top-tier sync companies like Jingle Punks, Audiojungle, Pond5, Epidemic, and many others who license songs, jingles and more – both exclusively or leased.
In this type of agreement, a specific license is sold, which is called a sync license.
This is the synchronization (usage) of the song for various types of commercial uses. It could be a multiple usage agreement, or a one time usage agreement.
Experience, domain expertise and top-notch negotiation tactics are absolutely critical here.
For example, a songwriter could potentially generate $1,000 per month from just one sync licensing deal, meanwhile you'd need millions of streams on Spotify to earn a few thousand dollars in revenue.
Always remember, this often comes down to relationships, timing and great quality of music.
One of my favorite quotes when handling business transactions is:
"When someone wants it, it's negotiable."
WHAT ARE PRINT ROYALTIES: HOW DO THEY WORK?
With print royalties, songwriters can earn royalties for printed sheet music sales which contain their lyrical works.
Typically, these royalties are paid directly to the publisher. Keep in mind this could be physical and/or digital sheet music.
Let's kick this section off with a quote from the legendary Dr. Dre:
"If you can write a great song, you can write a book. If you can write a great book, you can write a great movie script."
Dr. Dre gave this advice to Ice Cube, and it obviously paid off for him.
Here is a quick scope of what a payout structure looks like from a published book.
These come in a few distinct flavors:
- Hard Copies
- Paperback Copies
- eBooks
- Audiobooks
Amazon, the largest internet bookstore on earth, has provided an excellent breakdown on how the royalty structures work.
When someone buys your book on Amazon, and a new copy is manufactured to fulfill that order, you would receive a royalty for each order. The breakdown starts with your online price and that's how your print royalty is determined.
For example, with Amazon it begins at 60% (royalty rate) of your fixed price.
(Royalty Rate x List Price) – Printing Costs = Your Royalty.
APPLE MUSIC: HOW DOES IT WORK? HOW DO YOU GET PAID?
Most online streaming calculators for Apple Music estimated it at 0.00783 per stream, but keep in mind that it becomes more complex when dealing with foreign royalties.
Apple Music is more of a marketing tool than a money making tool. You should treat it like a social media platform and optimize around fan engagement and growing your followers.
Music creators are held hostage by where fans want to consume the content. We, as songwriters, do not get to control this narrative. The fans do.
When you release music on Apple Music (and other streaming platforms) it offers a direct route to new fans. It works no differently than social media. Your goal in the early stages of your career is to build followers and amass a loyal fan base.
Exposure is the name of the game. This is a prerequisite to your songwriting success.
Apple Music has a whopping 56 million subscribers who are streaming your music which is included in the monthly subscription fee. However, if they purchase the song from the iTunes Store for roughly $1.29, you will receive a percentage.
We already covered this, but no one buys music anymore. Sorry.
Bottom Line: Use Apple Music to build momentum for your songwriting career. Think about how you can build playlists, get featured on playlists, and distribute your music to a broader audience given it's a worldwide music sharing platform.
SPOTIFY: HOW DOES IT WORK? HOW DO YOU GET PAID?
Here's the reality: songwriters are earning pennies & cents on the dollar. In fact, you need around 1,500 streams just to make one dollar. Ouch. Just to be clear, Spotify is not the only offender. All streaming platforms are guilty, but this is just one example.
Many songwriters might not know (or care) but Spotify is a Swedish company, founded in 2006 in Stockholm, Sweden by Daniel Ek and Martin Lorentzon.
Spotify is a digital music, podcast, and video streaming service that gives listeners access to millions of songs and other content from artists all over the world.
Spotify basically comes in a few distinct flavors:
- Playing free music (with only 6 skips an hour).
- Spotify Premium – No ads or interruptions in exchange for a monthly subscription fee.
However, the way songwriters get paid is complex.
The Guardian – "Spotify does not disclose how much it pays artists per stream, but analysts have calculated it at about $0.00318, meaning that a rights holder also meaning your publisher who's partnered up with your PRO would receive $3.18 per 1000 streams."
Business Insider – "Most streaming services like Spotify pay artists and songwriters using a system called Pro Rata, in which all the money generated from listeners each month is totaled up, then divided proportionally by listening time in order to determine how much each artist/writer on the service should be paid."
Pitchfork.com – "Subscription dollars go into a big pool so the most streamed artist or the popular kids will get the most, unless the listener is buying the album. The streaming pay is very different, it's a little like the electoral college, where a quick and dirty method of tallying represents a more complicated reality."
Deezer.com – "We are working with labels for a "user-centric" model for paying out royalties: compensating artists/writers based on their share of each subscriber's listening time"
AMAZON MUSIC: HOW DOES IT WORK? HOW DO YOU GET PAID?
In January 2007, Amazon Music became the first digital music store to sell music without digital rights, (this was pre-streaming service platforms) and with no music laws. The industry had no idea what was coming just 10 years later.
Amazon Music works just like all the other digital distribution platforms in that they have partnered with all of the major labels: EMI, UMG, Warner, Sony BMG, as well as many indie labels.
When subscribers sign up for an Amazon Prime membership, Amazon Music is included at no extra charge. For Prime members, they have access to over 2 million songs by downloading the Amazon Music app.
Unlike the other services, Amazon Music has a much smaller catalog at just 2 million songs, however their catalog seems to be more about quality than quantity.
Partners like CD Baby and TuneCore work with Amazon Music to distribute your songs to the world. So just like with the other digital distributors, they sell and stream your music for the set price of your single / album and take a cut of the proceeds.
According to visualcapitalist.com they did a streaming calculation for Amazon Music to see what amount of streams you'd need to get a dollar – their number is $0.00402 per stream, not including the sale of an album or single thats the streaming number only.
PANDORA: HOW DOES IT WORK? HOW DO YOU GET PAID?
Pandora is one of the biggest internet radio platforms out there, which is powered by the Music Genome Project – operated by Sirius XM Satellite Radio.
It's hard to miss Pandora because it was one of the early streaming pioneers, and most new cars in the 2010 decade were pre-built with Satellite Radio installed as an added perk.
Subscribers range from $9.99 premium or $14.99 or a family service. Of course, you can always listen for free in exchange for suffering through annoying ads.
Getting paid from Pandora has a lot to do with your understanding of how internet radio royalties work.
Essentially, ads get inserted into the playlist. About half of Pandora's revenues are paid out in licensing fees. Radio royalties are considered a public performance so music played over the radio or through internet services would be a performance royalty. BMI has vague documentation on the subject.
However, Sirius XM's documentation seems to provide more clarity on what the percentages actually look like.
YOUTUBE MUSIC: HOW DOES IT WORK? HOW DO YOU GET PAID?
YouTube is the leading giant in visual content. It's no secret. Let's also not forget that YouTube is owned by Google, which means it lends unfair preference to ranking YouTube videos in Search Engines above competitors.
Even though YouTube has competitors out there like Wistia, Vimeo, Twitch and a few others – YouTube maintained itself way ahead of the pack with its user friendly qualities along with plenty of loyalty from its millions of content creators across the world.
YouTube is home to the greatest, funniest and shockingly most wealthy content creators on earth. Some of the highest grossing YouTubers are easily netting tens of millions per year.
As a content creator, you need to enable your channel to be monetized. YouTube income can be generated via AdSense, sponsorships and collaborations with popular brands and affiliates.
Affiliate partners can monetize referral traffic via links across your YouTube content which promotes their products and services.
As a songwriter, you can get your music placed on highly viewed content, which would generate royalties for your published works. Advertisers will typically pay 0.01 cents -0.03 cents per ad view, so based on that, a video can make around $3-$5 per 1,000 views.
Forbes estimates that a top YouTuber can earn $5 for every 1,000 video views, which is pretty decent.
These factors will impact how much revenue you can earn from YouTube:
- Total number of video views.
- Total number of clicks an ad gets.
Songwriters can also be accepted into the YouTube Partner Program, but you must meet the following set of criteria:
- Have at least 1,000 subscribers.
- Earned 4,000 public watch hours in the past 12 months.
- Have an approved AdSense account.
CAN OTHER SINGERS POST "COVERS" OF MY SONGS ON YOUTUBE?
Technically, every cover is illegal, unless the YouTuber obtains a mechanical license to perform and distribute the cover. But let's be real, who does that?
You, as the lyricist, who is also the copyright owner will need to make a decision. Do you really care that other singers are making covers of your songs?
If you're an emerging writer, you're better off just letting it slide. You'll get tons of free exposure for your works by allowing other singers to post covers.
If you're a superstar level songwriter, and you don't want YouTubers earning ad revenue off of remixing your copyrighted works, then you can report unlicensed use of your work and request that YouTube removes the content.
VIDEO GAME ROYALTIES: HOW DOES IT WORK? HOW DO YOU GET PAID?
In order to license your music to video games, you will need proof of the following:
- Musical Composition: The musical arrangement. Composed of the melody and lyrics associated with the master recording.
- Master Recording: Original studio recording. If you're signed to a record label, they will own the master.
Of course, licensing deals with video games don't just happen out of thin air.
Especially as an independent songwriter, you will need to build and leverage a significant network in order to unlock such opportunities, in addition to having a product that meets the needs of the music supervisors who are managing the video game projects.
Networking in this field would mean the following:
- Using LinkedIn (or other social media platforms) to contact music supervisors.
- Using LinkedIn (or other social media platforms) to contact video game developers.
- Attending video game conferences.
- Attending online gaming meetings.
- Participating in XBOX / Playstation online forums.
In terms of earning potential from video game royalties, there is a fascinating Quora thread on the subject, but ultimately it comes down to negotiating royalty percentages (typically 15% range) and advances which could range from $50K into the millions, depending on the tier of video game.
My advice would be to negotiate based on units sold: for example, $1,000 per every 25,000 units distributed.
TV SHOW ROYALTIES: HOW DOES IT WORK? HOW DO YOU GET PAID?
Syncs, syncs, syncs, and more syncs! TV show royalties increases professional recognition among your peers, and also generates diverse forms of revenue based on the type of TV show your song was placed in.
In the world of Hulu, Netflix, Showtime, HBO, Starz, etc – the possibilities are endless. It's all about knowing how to work the sync licensing game, and networking to gain access to the opportunities.
NEXT STEPS
Your success as a songwriter depends entirely on you. The knowledge is available and the opportunities are out there – you just have to find them. Get to work and go make something happen.
"Always remember, a hit is still a hit, even if it doesn't go viral. Stay focused!" – Geo
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