The Many Ways You Can Earn Music Royalties
There are two basic types of music royalties that I’ll be talking about in this post: composition royalties and sound recording royalties.
Think about it this way: composition/songwriter royalties are one half of the pie, and sound recording royalties are the other half.
So let’s breakdown the details both sides of that pie…
When you write a song, you have 100% of the songwriter (composition) rights, meaning you get 100% of the songwriter royalties. There are a few different ways you can earn composition royalties.
This is when your music is downloaded, streamed, or pressed to a CD/vinyl. You can collect mechanical royalties by signing up with SongTrust, CD Baby, or Tunecore and opting into their admin publishing deals.
You collect these any time you or someone else plays your song live, if your song is on the radio, streamed online, included in a YouTube video, or played on TV. You can collect these by signing up with a Performance Rights Organization (PRO), like BMI or ASCAP.
Sync licensing fees
When your song gets placed in a commercial (TV or online), a film, or any other visual media, you get a royalty. Not only will you get an upfront fee for the use of the song, but anytime that video is streamed, you’re also owed a royalty. If you work with a music library or licensing company, they usually become the publisher for use in visual media (either exclusively or non-exclusively) and may collect royalties for you every time your song is streamed in a video they’ve gotten the song placed in.
Sheet music/print royalties
When your song is sold in a songbook, downloaded, or displayed online, you’re owed a royalty. Whenever companies like Musicnotes or J.W. Pepper agree to sell your sheet music online or in print, they are responsible for paying you royalties (which is usually 15% of the retail price).
Sound Recording Royalties
If songwriter rights are one half of the pie, sound recording rights (aka the rights to the master recording) are the other half.
If you are your own publisher (i.e. you are your own “label”), you have full control over the sound recordings of your original songs. So when you record a song, you own the recording 100%, and you are owed 100% of any royalties generated by the recording specifically.
Here are the different ways your sound recording generates royalties for you…
When your music is downloaded, streamed, or pressed to a CD/vinyl, the distribution company is responsible for collecting your royalties from the streaming platforms or stores that are selling your CDs/vinyls. So, for example, your song is streamed on Spotify, Spotify pays your distribution company (like CD Baby or Tunecore), and your distribution company pays you (they may or may not take a cut first).
Sound recording performance royalties (aka neighboring rights royalties)
This is when your recorded song is streamed in public (via the radio, Pandora, Spotify, etc.), played on TV, or included in a YouTube video. You can collect these royalties via SoundExchange (the only company that does this in the United States). The royalty payout is split up kind of weirdly:
- 50% goes to the rights owner (you), so if you have a publishing admin deal with someplace like CD Baby, they will collect this for you.
- 45% goes to the “featured artist” (also you), and to collect this, you must register your songs with SoundExchange.
- The remaining 5% goes into a general fund for the “non-featured artists,” like session musicians. If you’re a session musician, you can sign up with SoundExchange and collect. If you’re an artist who played all the instruments on a song, you may have to sign up as a session musician to get that 5%.
Master use license fee
This is the sound recording version of a sync license fee. If you get your song synchronized with any type of visual media (TV, film, YouTube video), you’re owed a royalty. Like a sync license fee, the percentage you get is based on the contract you sign with a music library or licensing company or directly with an indie filmmaker or YouTube creator.
This is when someone wants to sample your song or part of your song. This requires you to agree to allow that person to sample your song, and you would set the fee owed to you by the person sampling the song. You can also set up an agreement that the person must pay you a certain percentage of the streaming/download royalties. (This is all assuming your music isn’t already on a free sample library).
Ready To Start Earning Music Royalties?
I hope this post clears up any questions you had about earning music royalties. It’s definitely a confusing topic, but I think this info will get you started on the path to earning the royalties you deserve.