How to Make Money from Songwriting
4 of the top revenue streams for songwriters and composers
Navigating your way through the music industry can be tough. If you want to make it as a songwriter it requires a lot of hard work and commitment, although often for not much compensation or recognition for the work you create, which can make you feel despondent at times.
I have found over the years it doesn’t help that there is so much misinformation out there about how to get started in the music industry and what to do once you’re there.
Many people who are in the industry writing songs are there because they love what they do, passion has to be the driving force to keep going.
Being passionate is the key to success.
Music is the base, but good music will only get you so far. You have to be business-minded too, so unless you are business savvy the music industry may not be like you thought it would be. Hence why it’s called the music-business.
It’s so important that songwriters develop a solid understanding of where exactly publishing revenue comes from.
Music publishing is the business of getting people to pay for the right to use your music.
Let’s have a look at the top revenue streams how songwriters can make money;
Performance Royalties
So whenever your song is played publicly, you are entitled to performance royalties.
These kinds of royalties are being generated all the time. A lot of artists and songwriters don’t realise this.
So whether you play your original song in front of a live ticketed audience or your recorded song is played in a bar, restaurant, radio or over a service like Spotify or Pandora it is considered a public performance and royalties are generated.
Be sure to register all your works correctly with your Performance Rights Organizations or PROs ( in the US that’s BMI, ASCAP, SESAC and UK it’s PRS) these collect songwriting performance royalties from the music users on behalf of the songwriters and rights-holders (publishers).
Synchronisation (Sync).
The sync licensing business has seen a huge amount of growth within the music industry in recent years. It’s very popular and can be very lucrative if you can breakthrough this area with your music. Some songwriters are now seeing bigger paycheques from getting their song placed in Film or TV shows than from record sales.
What is sync? How do I get my music placed?
So this means whenever your song gets a music placement within visual media including film, television, advertisements and video games you are compensated when the song is used. You can solicit these opportunities yourself or by joining a music library. There are never any guarantees you’ll get the placement as it’s very competitive but you have to be in it to win it, that’s what I say!
Sync can be seen as the TOP of earning money from your songs, but we must remember that each time your song is played on screen from film, TV or advertisements you’re, in most cases, entitled to receive performance royalties too. Double whammy!
Remember we touched on this point above. So, you need to make sure you have everything in place to fully maximise your revenue streams.
Publishing Deals.
If you are one of the lucky songwriters or composers who land themselves a publishing deal, in some cases, the publisher may give you a monthly advance against future royalties and help to expose your songs. You’d likely need to give up a percentage of your royalties, but it could be worth it down the line.
Submitting songs to a label or publisher is usually done through lawyers or music managers or by making a name for yourself through self-publishing/self-promotion.
There are some great independent publishers out there, just be sure to do your research.
Mechanical licensing.
Mechanical royalties are paid to songwriters and artists when music is sold (think CD or vinyl) but also when music is streamed (streaming mechanicals) “on-demand” (like Spotify).
Many artists across the world are hungry for well-written songs.
You generally see revenue when one of your original songs is licensed, and they pay you a fee to use the song, so depending on how well known the artist is the bigger the fee you’ll receive for the usage, but be aware many don’t allow you to retain ownership.
In the digital era, mechanical royalties do remain relevant in 2 key ways; with download mechanical royalties and streaming mechanical royalties.
If one of your songs is distributed via iTunes, Apple Music, Amazon or similar then you will generate royalties for every unit downloaded.
Songwriting mechanical royalties are set by government through what’s called a compulsory license, which right now is set to about 9 cents of every dollar earned via sale.
- Current copyright regulation wasn’t created at a time when services like Spotify or Apple Music existed, so they pay both performance royalties and mechanical royalties to songwriters and artists.
- Spotify pays about 10% of its revenue to songwriters (split between mechanical and performance royalties) and about 60% to the artists.
- Services like Spotify don’t have to negotiate with songwriters, because the government sets the rates — through the consent decree for PROs and a compulsory license for mechanical licenses.
- Mechanical royalties for songwriting are usually paid by labels or artists to a third party, (traditionally for the major publisher it’s been HFA (the Harry Fox Agency), who pay the publishers.
Conclusion
Some may say you need a little luck in this business, being in the right place at the right time, which is very true as it isn’t easy to be a professional songwriter and make a living from it.
As long as you stay passionate to create quality songs, have the determination to succeed along with having a good understanding of the business, these key areas will help get you to where you need to be.
There is good money to be made from bringing a songwriter so keep writing, recording, networking and releasing new music as the more work you have in your music catalogue the more chances of success you will have.
