How Do Songwriters Make Money?

What do Songwriters Get paid for?

The business happens well after the magic of songwriting has faded. Once a song is written and recorded, it must be exposed to the music business industry, published, and hopefully used so that the songwriter can cash in on their efforts.

Most songwriters dream of having their songs cut by a major recording artist and played on the radio. When they accomplish this, it is usually with the help of a publisher who pitches the song for them. The publisher's job is to exploit every song they represent, so even if that song makes it to the top of the chart, the income doesn't stop there. Depending on popular a song becomes, the publisher might also pitch it to be the theme song for a TV series or commercial, or included in an exercise video. Remember the song played during the Ketchup commercial, "Anticipation?"

However getting a song cut on a major label is not the only way songwriters can earn money. Some songs never make it on a major label, but can end up as source cues or feature songs on television or in movies. Think about all those songs you hear in a movie; the chase scene, the love scene, the fight in the bar. Those songs are earning the songwriter money even if they are in the background and used for 10 seconds! Those songs are usually part of a Music Library who represents the songwriting specifically for that purpose.

The Six Ways Songwriters Can Earn Income on Their Music

The ASCAP website's career development "Keen on Music" section lists six possible sources of income for a songwriter:

Mechanical Royalties - this includes Digital download, a CD, cassette or similar song source. The going rate is 9.1 cents per unit. Doing the math and using that rate, if a song is part of a CD that reaches Gold status (1,000,000 copies), the songwriters of that song along with their publisher, will earn in the neighborhood of $91,000 which is usually split 50/50t! However, sometimes that number is different based on the deal cut.

Performance Royalties - Songs also earn money when they are played on the radio, television, Internet, in concert halls, restaurants, coffee shops, clubs, malls, or a gym. Payment for these uses are monitored by the PROs (Professional Right Organizations such as ASCAP, BMI and SESAC). They use a formula for each use and payment is calculated based on varying factors such as frequency of radio rotation, venue of use, time of day used, how many seconds of the songs is used, audience size, etc.

Synchronization Royalties - This is a fee that is paid to use a song in a visual medium such as television, film, or DVDs. This fee can run from several hundred dollars to thousands depending on the popularity of the song, type of use and the length of time used.

Print Royalties - These include the sale (including downloads) of printed materials containing music and/or lyrics and can include, sheet music, books and magazines, and even when lyrics are projected on a computer screen in front of a business or church group. Income is usually a percentage of the total sales of a songbook or print sales, ie, the publisher may share a portion of their income, that might average 12.5% of the total sales, between the total number of songwriters involved.

Grand Rights - Income that is derived through the use of the song in a theatrical production, which is usually a percentage of the box office receipts, divided between all income-entitled parties.

Foreign Royalties - This income is earned through use in any of the previous methods in a foreign country.

Digital Royalties - The newest way for songwriters to earn money is through digital transmission of music via iPods, satellite radio, website downloading, digital mobile phones and PDA's.

As a songwriter works his way through the six different ways his songs can be used, the payment "standard" becomes blurred and more complex. Every songwriter with published work will be a member of a PRO and rely on that organization to collect the royalty portion of their payments for them, with the balance usually collected and paid by their publisher. For more details on each income source, check out the ASCAP website.

The most important thing for every aspiring songwriting to remember is to concentrate on writing a great song, make a good demo of it, and expose it to the industry professionals who can turn it into cash in their pocket. Once they have the music business wheels turning, they will start to make sense of the elusive music biz, as they simultaneously reap the financial fruit from their songwriting efforts!

Resources:
ASCAP.com (American Society of Composers, Authors, and Publishers)