How Musicians and Composers Make Money
Written by Ramon McNally on January 1, 2013
The Future of Music Coalition just released the results of a research project they conducted where over 5,000 US-based musicians were surveyed about how they earned money. Below is the list with their findings.
Songwriter and Composer Revenue
1. Publisher advance. Bulk payment to songwriter/composer as part of a publishing deal.
2. Mechanical Royalties. Royalties generated through the licensed reproduction of recordings of your songs — either physical or digital.
3. Commissions. Typically a request from an ensemble, presenter, orchestra or other entity for a composer to create an original work for them.
4 Public Performance (PRO) Royalties. Revenue generated when your songs are played on radio, TV, in clubs and restaurants. Paid to songwriter/composer/publisher by ASCAP/BMI/SESAC
5. Composing Original Works for Broadcast. Typically a commercial request to compose an original jingle, soundtrack, score, or other musical work for a film, TV or cable show, or an ad agency.
6. Synch Licenses. Typically involves licensing an existing work for use in a movie, documentary, TV, video games, internet, or a commercial. Paid to songwriters/composers either via publisher or record label, or via a direct licensing deal with the licensee (movie studio, ad agency, etc) if you are self-published.
7. Sheet Music Sales. Revenue generated by the sale of songs/compositions as sheet music. Paid to songwriter/composer by publisher, or directly from purchasers if you are selling it on your website or at performances.
8. Ringtones Revenue. Generated from licensing your songs/compositions for use as ringtones. Paid to songwriter/composer via your publisher, your label or Harry Fox.
9. ASCAPLUS Awards Program. Awarded by ASCAP to writer members of any genre whose performances are primarily in venues outside of broadcast media.
10. Publisher Settlement. Payment from publishers to writers for litigation settlements.
Performer and Recording Artist Revenue
11. Salary as Member of Orchestra or Ensemble. Income earned as a salaried member of an orchestra or ensemble.
12. Shows/Performance Fees. Revenue generated from playing in a live setting (for non-salaried players).
13. Record Label Advance. Paid to artist as part of signing a deal.
14. Record Label Support. Money from label for recording or tour support.
15. Retail Sales. Revenue generated from selling physical music in retail stores or via mail order. Paid to artist/performer by your label, or digital aggregator like CD Baby.
16. Digital Sales. Revenue generated from selling music digitally/online. Paid to artist/performer by your label, or digital aggregator like CD Baby or Tunecore.
17. Sales at Shows. Revenue generated from selling recordings of music at shows/live performances. Paid to artist/performer directly by fans.
18. Interactive Service Payments. Revenue generated when your music is streamed on on-demand services (Rhapsody, Spotify, Rdio). Paid to artist/performer by your label, or digital aggregator like CD Baby or Tunecore.
19. Digital Performance Royalties. Revenue generated when your sound recordings are played on internet radio, Sirius XM, Pandora. Paid to performers by SoundExchange.
20. AARC Royalties. Collected for digital recording of your songs, foreign private copying levies, and foreign record rental royalties, distributed to US artists by AARC.
21. Neighboring Rights Royalties. Collected for the foreign performance of your recordings.
22. AFM/Secondary Markets Fund. Paid to performers on recordings used in TV and other secondary uses.
23. AFM/Sound Recording Special Payments. Paid to performers for the sales of recorded music.
24. AFTRA Contingent Scale. Payments paid to performers when a recording hits certain sales plateaus.
25. Label Settlements. Payments from labels to recording artists for litigation settlements (MP3.com, Limewire).
Session Musician Revenue
26. Session Musician/Sideman Fees for Studio Work. Revenue paid to you for playing in a studio. Paid by label, producer or artist, depending on situation.
27. Session Musician/Sideman Fees for Live Work. Revenue paid to you for playing in a live setting. Paid by label, producer or artist, depending on situation.
28. AFM/AFTRA Payments. Payments from the AFM/AFTRA Intellectual Property Rights Distribution Fund, which distributes recording and performance royalties to non-featured artists.
Teaching and Producing
29. Music Teacher. Revenue generated from teaching your musical craft.
30. Producer. Money from producing another artists’ work in the studio or in a live setting.
31. Honoraria or Speakers Fees
32. Merchandise Sales. Revenue generated from selling branded merchandise (t-shirts, hoodies, posters, etc.). Paid to artist/performer by fans.
33. Fan Club. Money directly from fans who are subscribing to your fan club.
34. YouTube Partner Program. Shared advertising revenue, paid to partners by YouTube.
35. Ad Revenue. Or other miscellaneous income from your website properties (click-throughs, commissions on Amazon sales, etc.).
36. Persona Licensing. Payments from a brand that is licensing your name or likeness (video games, comic books, etc.).
37. Product Endorsements. Payments from a brand for you endorsing or using their product.
38. Acting. In television, movies, commercials.
Fan, Corporate, and Foundation Funding
39. Fan Funding. Money directly from fans to support an upcoming recording project or tour (Kickstarter, Pledge Music).
40. Sponsorship. Corporate support for a tour, or for your band/ensemble.
41. Grants. From foundations, state or federal agencies.
42. Arts Administrator. Money paid to you specifically for managing the administrative aspects of a group that you are a member of.
The information from this post was originally published on the Future of Music’s micro-site related to their “Artist Revenue Streams” research project. The Future of Music Coalition is a national nonprofit organization that works to ensure a diverse musical culture where artists flourish, are compensated fairly for their work, and where fans can find the music they want.