The High Cost of Music Distribution and Royalty Accounting: Which platform is right for me?
Looking for the best way to calculate split earnings between you and your collaborators when it comes to music royalties? Here’s a breakdown of the big hitters.
Most music distributors take a percentage of your earnings to calculate your splits. Why shell out more cash when you can be in the driver’s seat of your own splits?
There are a handful of tools out there that promise to help you calculate earnings for you and your music collaborators. We built Good Splits to do it in the simplest way possible.
Here’s a closer look at how Good Splits stacks up to distributor offerings, other split tools, and music managers:
Why are we showing you and linking to all our competitors? Well, because we built Good Splits to bring some transparency and trust to the music industry and because we simply couldn’t find this type of tool anywhere else on the market.
We wanted to create something that’s free to help struggling artists and creators be able to retain more of their earnings. If there’s another better way to do that, we’ll be the first to acknowledge it.
Business Managers:
Although touring artists running substantial payroll for a road crew might have a business manager, most developing and upcoming artists are often labeled “too small” for a full-time business manager. Even when you do obtain one, their fees can range from 3–5% of gross revenue (or more).
Royalty splits are their least favorite thing to do (and the honest ones will admit that). The double whammy here though is some will charge their percentage on the gross received (that is calculated) and then again on the amounts due to their clients from the gross. We don’t think that’s fair.
Good Splits (that’s us!)
The easiest and simplest of the royalty calculators.
Good Splits is great for independent contractors, musicians, smaller music management companies, or anyone who just wants to easily see what they owe. It’s free to sign up and we can take any sales report (or even one you built yourself) and alongside your splits, quickly tell you what you owe your collaborators. You can choose to pay a small fee to pay them directly from our tool (via bank transfers). Or you can just use our free tool to see what you owe, track who you’ve paid, and pay them via Venmo, Paypal or some other channel that you already have set up.
Stem:
Stem is an invite-only aggregator that distributes your music to DSPs, receives your earnings, and then splits the royalties received among shareholders. In exchange for doing this, they charge 10% on gross earnings received. Their fee is prorated across shareholders so if you own a song 50/50 with another shareholder, you both pay 5% to Stem to split your royalties.
While this may sound attractive at first glance, over the life of copyright this fee begins to add up. If your song grosses over $1 million, you will have paid Stem $100,000 for royalty splitting.
DistroKid is a music distributor that allows creators to upload and sell their music on streaming platforms. The fee structure at Distrokid is that you pay $20/year to have your music distributed to various DSPs. They offer royalty splitting but require each of your collaborators to also pay $20/year in order to receive their royalties. Having to pay more money to receive money that rightfully belongs to creators just doesn’t seem right to us.
ONErpm is another type of distributor that allows creators to distribute their music on streaming services but unlike Stem and Distrokid, ONErpm operates a service model (meaning should you want, you can have access to an account representative to assist with your releases). Users pay 15% on earnings received to distribute through the platform. ONErpm is one of the few service models that offer royalty splitting but a user would have to opt in and make sure each collaborator also opted in to receive their earnings. Plus, you have to apply to be on their platform.
Symphonic is an invite-only platform that offers a suite of self-serve services like digital music and video distribution, royalty collection, and marketing. Symphonic has a similar service model to ONErpm, meaning you can choose to have an account representative to assist in your releases. Symphonic does not offer royalty splitting, though. So each dollar received through Symphonic would have to be calculated and paid elsewhere. (Good Splits to the rescue!)
AWAL:
AWAL is another invite-only service model option for releasing your music to available DSPs. So once you make it past the submission and approval process, you can expect your music to make it to the usual places you find music online. AWAL does not offer royalty splitting as part of their 15% distribution fee so if you use AWAL, you can always let Good Splits take care of the splitting (we do it for free).
Tunecore is the original self-service distribution option that gets your music from your computer to streaming services. Anyone can join Tunecore but users pay yearly fees to keep songs and albums on DSPs. With the exception of Sound Recording revenue generated on YouTube (Tunecore takes 20% of these royalties), Tunecore passes 100% of earnings to users. There is no royalty splitting with Tunecore so the user is left to calculate and distribute those earnings to collaborators. (That’s where Good Splits can step in.)
Whether you are in a self-distributed model or a service-distributed model, you should think about how long your music will be with that service. Any fee paid over the life of copyright can add up. Just another reason we built Good Splits: to assist in helping make sure the most amount of earnings make it to collaborators as quickly as possible.
So, what’s the most economical way to a) distribute my music and to b) split my royalties?
Do what works for you and your team. If you don’t know where to start, we’d recommend using Tunecore for distribution since the cost varies per release, and Good Splits for your royalty accounting (of course).
Have more questions about paying out collaborators or producers? Shoot us a note: yo@goodsplits.app or chat with us on our site — we’re available during business hours on weekdays: goodsplits.app.
