Songwriting is not generally looked at as a lucrative venture. The majority of people writing songs are not doing it to make money.
But songs are worth money. People care about music and music has value.
So, how do you get paid as a songwriter? As more and more people listen to your music or music you’ve written, you will begin to generate income. Whether it’s royalty or a fee for service, you can make money on your musical creations.
This guide will lead you through the principal sources of income for songwriters.
Songwriter Can Get Paid Royalties
Your songs generate royalties. Every time they are played, performed, or otherwise used, your songs will generate a royalty that you can then collect.
Pretty cool, right?
In fact, today you have more ways to generate royalties than ever before – digital songwriter royalties account for a huge percentage of the royalties being paid out.
Of course, that doesn’t mean you’ll make a killing. The best royalties are generated through “old-school” ways of consuming music – having music on satellite or terrestrial radio, having your music played publicly, or having your music in a TV show. These are still some of the best ways to make money with your songs.
Either way, there is money out there for songwriters. But you must write songs that get released. After that, the more people are listening, the more you’ll get paid.
Here are the principal types of royalties that songwriters collect.
Mechanical royalties are generated every time a physical unit containing your songs is sold or manufactured.
Labels will pay this royalty, as will companies that are manufacturing products that use your song. This is often a major source of income for songwriters.
Mechanical royalties remain relevant in the digital era in two key ways: digital download royalties and streaming mechanical royalties.
If your song is distributed to music services like iTunes, Google Play, Amazon Music, or similar, you will generate a royalty for every unit of music that is downloaded.
Mechanical royalties generated by downloads and physical sales are about the same: $0.091 per reproduction of download, in the U.S. and 8 to 10% of the sale price outside the U.S.
Streaming, on the other hand, is different.
In 2019, streaming is where it’s at. If you’re releasing music, you are almost definitely going to release your songs on Spotify and Apple Music (and TIDAL, Deezer, and the myriad of other services popping up).
Streaming earns a mechanical royalty, because the song is still getting reproduced in a way that allows interactive consumption.
What on earth does that mean?
Well, a song is interactive if you can pause it, skip forward, or go back and listen again. You can listen to it whenever you want, wherever you have the means to do so.
This is what separates this kind of royalty from performance royalties, which we will cover next.
Various streamlining services pay out royalties at different rates. Spotify is around $0.005/stream.
Every time there is a public performance of your work, you are entitled to a live performance royalty.
This sort of royalty is generated all the time, and many artists don’t realize it. Every time you play original songs to a ticketed audience, that generates a royalty. Every time your recorded music is played in a bar, restaurant, airplane, or on AM/FM radio, a royalty in generated.
The royalty rate is determined based on a negotiation between your Performing Rights Organization (ASCAP, BMI, SOCAN, etc.) and the place where the performance occurred.
There are set rates for performances at venues/festivals, set rates for plays on terrestrial radio, satellite radio and more.
Make sure that you are registering your set lists with your PRO to collect your live performance royalty and make sure you have every original song registered as well, so that you collect royalties for plays.
Non-interactive streaming also counts as a public performance royalty.
These services are ones where you cannot pick the specific song you are listening to, create a playlist with the song, skip forwards or backwards, etc.
These kinds of streams are categorized as a public performance and generate the according royalty. Services like Pandora, Slacker, iHeartRadio and SiriusXM all pay these royalties.
Usually, the royalty per stream is a percentage of the company’s revenue.
Strangely, a performance royalty is also generated if your song is used in a ringtone that is played outside of the U.S. Inside the U.S., ringtones generate mechanical royalties.
Print royalties are the least common these days, but used to be more significant.
This royalty is generated from copyright on printed materials.
This means sheet music, lyric books, guitar tabs, horn arrangements, choir arrangements – that sort of thing.
Companies like Alfred Music Publishing or Hal Leonard create and sell sheet music for popular artists and are required to pay this royalty.
If a company creates a shirt of item with your lyrics on it, that would also be subject to a royalty.
This royalty rate is a one to one negotiation between whoever owns the rights to the music and the company that is paying the royalty. Sheet music royalties are often paid out at 15% of the retail price.
In the digital sphere, print royalties are generated from websites or services that are selling the sheet music, tabs or lyrics to your songs.
Fee For Service
Royalties are a sort of passive income that is generated and collected over time as long as your songs are being played and used.
If you start raking in respectable royalty checks, that can benefit you for a long time.
Generally, songs remain in rotation for years, and even if they don’t, it can take royalty collection companies a while to catch up with all the plays a song has received.
Sometimes, this collection can go on for years, and you’ll thus have a passive income stream for years.
It’s a great way to make money, but it’s unreliable. You never know how many spins you’re going to get or how much of it your PRO is collecting.
That is why most songwriters also get paid for specific work.
Songwriting Revenue Streams: Sync Fees
If someone wants to use your music in a TV show, movie, or commercial, they need to pay for a synchronization license.
This is a fee that is negotiated on a case by case basis, depending on several factors. How the song is being used, how long it’s being used, how recognizable the song is, how famous the artist is, the budget of the show and the popularity or visibility of the show.
Because of all these factors, these fees can be anywhere from hundreds of dollars to hundreds of thousands of dollars.
Either way, the licensing fee has to be paid for the song to be used.
Now, once your song is licensed to be used like this, it’s still able to generate mechanical royalties from the reproduction of the song. Remember that the song is reproduced every time it’s played or used in a product (like a video game, toy, greeting card or otherwise).
Not only will you collect a licensing fee, but you’ll also collect a mechanical royalty.
This also applies to digital sync fees. If your song is licensed to be used in a YouTube video, you will receive the flat fee as well as the digital royalty.
Writing To Briefs Is Another Form Of Monetization For Songwriters
Songwriters are often asked to “write to a brief”.
This can mean a few things.
Principally, you’ll write to a movie scene or something (a movie might need an original song that is dramatic and has motherhood themes) and then you can pitch the song to be featured in the movie.
Usually, you’ll only get paid for this if the song gets used.
On the other hand, you might get asked to write a jingle or some music for a company’s hold line on the phone.
This is probably going to be a fee-for-service arrangement, where they pay you a set amount to write and record the song and then have it licensed for their use.
You’ll then collect a royalty whenever it is generated by their use, as well as the fee you negotiated for the writing and recording of the song.
Songwriters Can Get Paid Advances
If you are lucky enough to have a co-publishing deal with a publishing company, they may pay you advances.
This is probably a monthly stipend, so songwriters can have time to write music, instead of having to work a job all the time.
Here’s the deal though: this money is generally a loan. You won’t see a dime of your royalties until your advances are paid back.
But hey, you’re getting paid to write songs, and that is a wonderful thing!
How Do Songwriters Get Paid Conclusion; There Is Money To Be Made!
Being a professional songwriter is not easy, and most must supplement their income with other activity.
But never let anyone tell you that it’s impossible or that there is no money to be made. Once every three months, my royalties come in. It’s not much, but it’s usually enough to pay my rent that month.
Write songs and release them. The more you work, the more success you will have!