Back in the day, all you needed to land your music exposure and make money was your local radio DJ. Today there are many ways to increase your music-related income. Don't depend upon only one outlet for your music.
Below are nine ways to broaden your income through music.
You will also learn how to use the specifics of the music copyright law to distribute your music in the right way.
Before you distribute your music – join a performance rights (PRO). The United States copyright law protects original works of authorship including literary, dramatic, musical, artistic, and other intellectual works. The first music copyright protects the sound recording, the recorded performance (the Master), and the second protects the underlying musical composition (the actual work being performed). The third protection the US law gives to copyright holders covers their public performances.
When someone plays your music publicly, they must license the use of that music or they would be committing copyright infringement.
Licensees include radio and television stations, nightclubs, concert halls, sports venues, and restaurants.
Getting paid for your copyrights can take on many forms.
As a musician, you want to make sure you are getting your Royalties and Revenuesin accordance with the music copyright law:
1. Mechanical royalties
Every time one of your physical products sell like CD's, Albums, Scan Disc, etc. you earn a Mechanical Royalty, generated from the reproduction of your song. If the reproduction is in the U.S., the royalty rate is $0.091 per reproduction for songs under five minutes. A formula rate kicks in set by the U.S. Government for songs over five minutes. Outside of the U.S., the royalty rate is typically 8-10% of the listprice.
2. 'Analog' public performance royalties
Another type of situation where you collect a Royalty is from a 'Public Performance' of your composition such as when you play a set at the local club. It also covers your track if it's background music in restaurants, hair salon, bars, restaurants, airplanes, offices, movie theaters, etc. Worldwide, the royalty rate is determined by a one-to-one negotiation between the PRO and the entity where the performance occurred.
3. Synchronization license royalties
Another important way to generate income is through the Synchronization License Rights (Sync) which is different from the distribution copyright. For example, if a film, TV studio, or production company want to use your composition in a TV show, movie or commercial they would need to pay for the Sync Rights. The license fee worldwide is a one-to-one negotiation based on several factors like the length of the use, how it’s being used (background or up front), the format and the popularity of the production. With so many different items factoring in, the fee can run from a few hundred dollars to hundreds of thousands of dollars.
4. Mechanical synchronization royalties
There is also a Mechanical Royalty generated along with the Reproduction copyright. This means from a publishing standpoint, there’s a per unit royalty payment owed to the songwriter based on the number of units manufactured that include the song (like ringtone, greeting card, toy, video game, etc.). Entities like Hallmark, toy companies, or video game companies generate and pay this royalty, and the value worldwide is usually based on initial manufactured units.
5. Digital download mechanical royalties
One of the popular ways to make money is through online distribution like iTunes, Spotify, Google Play, etc. You are owed a royalty for every unit of your music that’s downloaded. This royalty comes from the 'Reproduction' and 'Distribution' copyrights and the royalty payment mirrors physical reproductions: $0.091 per reproduction in the U.S., and generally 8% – 10% of the list price outside the U.S. This can vary on other online platforms.
6. Streaming mechanical royalties
Streaming is common through digital stores like Spotify or Deezer. The term 'interactive' means that the user can choose songs, stop, go backward, create playlists, etc. As is the case with digital downloads, a songwriter is owed a royalty (from the 'Reproduction' copyright) for every stream of his or her song on an interactive streaming service. In the U.S. there’s a government-mandated rate of around $0.005 per stream, and outside of the U.S., the royalty is 8-10% of the list price.
7. Digital non-interactive 'Streaming' public performance royalties
A non-interactive streaming service is one where you can’t pick songs, create playlists, or otherwise 'interact' with the music, kind of like AM/FM radio. A non-interactive stream is a 'Public Performance' and generates a songwriter royalty, paid by the streaming service, like Pandora, Slacker, iHeartRadio, Sirius XM Satellite Radio, cable companies, and many others. Worldwide, the royalty rate is determined by a one-to-one negotiation between the PRO and the other entity (generally based on a % of the entity’s Gross Revenue).
8. Interactive 'Streaming' public performance royalties
When someone streams your song on an interactive streaming service like YouTube, Spotify or Deezer, it also counts as a 'Public Performance', which means you’re owed, additional songwriter royalties. There’s no set government rate in or outside the U.S. — it’s determined by the PRO's formulas and the other entity. It's usually based on a % of the entity’s gross revenue. A few formulas and calculations from the PRO later, and you’ve got a royalty.
9. Digital synchronization license
Sync also applies to the digital world. Often people create YouTube or Vimeo videos that use someone else’s music in the background. In slightly more technical terms, what’s happening here is that the song is being synchronized with a moving image, and when this happens, a per use license payment is required. As far as the royalty rate goes, there is no government rate, just a one-to-one negotiation that sets the per use royalty rate. It’s typically a percentage of Net Revenue as generated by advertising dollars. With so many options, besides getting registered in a PRO, you would benefit from a publishing administrator to help collect your worldwide music royalties. Then you will have time to focus onother activities such as touring and selling merchandise.
As you can see there are a lot of nuances which need to be considered while distributing your music. Therefore,knowing all the aspects of music copyright is a very important concept for musicians to learn.