12 REVENUE SOURCES for your music

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A list of common revenue sources for today’s recording artist

1. Streaming revenue from your sound recordings

What is it?

This is money you’re owed whenever your recordings — whether you’re the label, the artist, or both — are streamed on platforms like Spotify, Apple Music, or Deezer. This royalty is sometimes called the “streaming license fee.”

2. Download revenue

What is it?

If you’re an artist or a label, you’re probably owed money whenever you sell a download (on iTunes, Amazon, CD Baby, etc.).

[If you wrote/composed the music, you’re also owed publishing royalties, but we’ll get into that more in depth later.]

For now, we’re talking about the royalty you’re owed for the digital sale of a sound recording.

3. Social video monetization on YouTube, Facebook, Instagram, Oculus, and more

What is it?

You’re owed money for the usage of your music in video content that appears on popular platforms like YouTube, Facebook, and Instagram. Those platforms take a “sonic fingerprint” of your recording, and any time your music appears anywhere in their ecosystem, it’s monetized on your behalf.

4. YouTube Partner Program revenue

What is it?

YouTube gives eligible channels a way to earn ad revenue on their videos via the Partner Program.

How to collect?

First, do you qualify for the YouTube Partner Program? If you meet those channel requirements, sweet! YouTube will pay ya.

5. Physical sales

What are they?

Money earned by selling physical music media formats such as:

  • CD
  • vinyl
  • cassette
  • USB flash drive
  • and more

How to collect?

At shows: If you’re selling these at shows, you can put the cash in your pocket or run cards on a system such as the Square Reader or PayPal’s Chip & Swipe Reader. Ecommerce solutions such as Shopify also have tools that help you sell product, manage inventory, and collect customer data at live shows.

From record stores: Use a physical distributor to get your CDs and vinyl into thousands of record stores around the world.

For your own ecommerce efforts: Lastly, if you’re doing your own order fulfillment for physical sales (meaning you’re going to run to the post office whenever you sell something), you can use services like Bandcamp or Shopify to create an online store, and payments would be processed via something like PayPal or Stripe, then deposited to you via ACH.

6. Mechanical royalties

What are they?

Mechanical royalties are a kind of publishing royalty (money owed to publishers and songwriters for the usage of a composition, as opposed to a particular recording).

If you’re a songwriter, composer, or producer who creates original music, you’re owed a mechanical royalty for the “reproduction” of your composition. In the physical world, this meant mechanical reproduction in the form of CDs or vinyl. In the digital world, both downloads and streams are considered virtual mechanical reproductions. You’re owed money for all of it!

How to collect?

First, it should be stated that collecting mechanical royalties on your own is VERY difficult. It requires a lot of paperwork, striking up relationships with royalty collection societies around the world, and potentially even managing communications in dozens of languages.

Here’s how we’ll collect your mechanical royalties…

For global interactive streaming activity:  make sure your original music is registered with collection societies around the world and publishing royalties generated by interactive streaming activity. Interactive streaming is when the user chooses exactly what they want to hear; think Spotify, Apple Music, etc.

For downloads within the US: This is a tricky one to explain, but the short answer is — you probably don’t need to worry about it.

In most parts of the world, mechanical royalties from downloads are set aside by the download store and passed to a royalty collection society, who then holds those funds to be collected by publishers and publishing administrators. However, in the US, mechanical royalties for downloads gets paid to the distributor as part of a bulk payment for the download.

For international downloads: As mentioned above, mechanical royalties for international downloads are passed to collection societies.

7. Performance royalties

What are they?

Performance royalties are another form of publishing royalty, owed to publishers and songwriters when their compositions are played on the radio, performed in public, and more.

How to collect?

Work in conjunction with Performing Rights Organizations around the world (including ASCAP, BMI, SESAC, SOCAN, PRS, and many more) to make sure you’re earning ALL your performance royalties. Just don’t forget to file your set lists when you perform live, because you’re owed songwriter royalties for those shows too!

8. Non-interactive streaming royalties (a form of Neighboring Rights)

What are they?

In the USA, these are royalties generated from non-interactive streaming on internet and satellite radio services. Non-interactive streams are passive plays that happen when a user is NOT choosing exactly what they want to hear — like on Pandora Radio. Unlike publishing royalties, which are owed to publishers and songwriters for the usage of a composition, these royalties are paid for the usage of a sound recording. They’re owed to the featured artist(s), the session players, and the label that helped create the recording.

Internationally, these royalties for the reproduction of a sound recording are more broad, including not just non-interactive streaming, but also TV and terrestrial radio royalties. In the USA, radio play over the airwaves only generates money for songwriters and publishers, NOT artists and labels.

How to collect?

The featured artist portion: You should register directly with SoundExchange, and they will pay you the artist share of these royalties.

The session-player portion: If you played on a certain track that sees non-interactive streaming activity, you’re owed something too, and you can collect by affiliating with an organization such as the American Federation of Musicians (AFM), the Screen Actors Guild, or the American Federation of Television and Radio Artists (SAG-AFTRA).

9. Fees for session, production, arranging, or remixing work

What are they?

As a musician, you probably do OTHER work outside of your own music-making. You play on a friend’s record. You help arrange or produce a track for someone in your scene. You remix a song by an artist halfway around the world. Sometimes you’ll work for free or as a favor for a friend, and sometimes — most times — you should get paid for these efforts.

How to collect?

This area is a little more nebulous, as terms are usually negotiable (for instance, should a producer get songwriting credit or just get points?).

One thing is certain: Get your agreement in writing before you collaborate. Determine if this is a work-for-hire situation where you’re contributing your talents for an upfront fee ONLY, or if you deserve some ownership stake or ongoing royalty split.

10. Live performance income

What is it?

The money you make from playing live! Could be the door charge. Could be ticket sales. Could be a guarantee. Minus house expenses, “catering” (cheap beer and chips), and “promotion” (your name in tiny font at the bottom of a monthly calendar in the local rag). ; )

How to collect?

With live revenue, there’s no one answer. You could get paid by the talent buyer before the gig, by the bartender or bouncer at the end of the night, by a promoter stuffing a bloody envelope with crumpled bills weeks afterwards, or with an instant transfer of funds from a ticketing platform.

However the money is due, good luck!

And remember to file your setlists with your Performing Rights Organization if you’re playing original material, as that opens up additional royalties beyond what the venue or promoter initially pays you.

11. Sync licensing revenue

What is it?

“Synchronization” is the act of pairing audio with moving images — video, film, TV, commercials, video games, corporate presentations, etc.

Whenever a song is used in this manner, the songwriter(s), publisher(s), and label must all be paid! Not only that, those rights holders get to set the terms for the sync usage, set the monetary amount of the license, and always have the ability to say “No, go to hell.”

How to collect?

You can handle your own sync licensing, negotiating with music supervisors yourself, or you can use a sync licensing service

Just remember, 50% of the sync fee is owed to the label and the other 50% goes to the publisher(s)/songwriter(s). Hopefully you’re all three! If so, you’ll also be set up to collect performance royalties for things like ongoing TV usages

12. Merch sales

What is it?

This is when you make money by selling OTHER products besides your recorded music: posters, t-shirts, hats, mugs, sheet music,…

How to collect?

Similar to the CD and vinyl sales mentioned above, you might have an online store you’ve set up yourself, employed an existing ecommerce solution like Shopify, or you just sell these things at gigs. If you’re putting dollars right in your pocket, be sure to keep track of the payments, monitor your inventory, and be ready to stock up again when supply gets low.

James Morris Written by:

Minnesota Local and Global War Against Terror era Army vet, James "Manny" Morris Developed the concept of an artistic entrepreneur network in the heart of Minnesota's hottest district for art and community collaboration. Teaches small business concept and provides consulting to fellow Minnesotans in the Arts industry and associated trades. Loves Music, Art, Fashion, and most importantly his family. Not know for being a foodie but also loves the Twin Cities' diverse cuisine that accommodates a wide range of ethnic foods from the BBQ of Texas to the Pho Bowls of Asian tastes.