Show Me the Money!
I’m often asked by fans what is the best way to purchase or listen to music in order to ensure that the songwriters behind it are being paid fairly. After all, if you love a particular songwriter or artist, it’s the best way to make sure they’ll be able to continue doing what they do so you get to hear more of it!
The music royalty system is complicated, so it’s not surprising that many people have no idea that there are “good ways” and “bad ways” to consume music when it comes to where the dollars go. So I'd like to post an outline of what I know about this subject; just something to keep in mind when you’re making choices about how to listen. Here are the rankings, from best to worst, of different ways to consume music when it comes to supporting the creators behind it:
1. OFFSTAGE SALES FOR PERFORMING SONGWRITERS:
How Much We Earn: $5 to $20 per CD
Buying a CD from a performing songwriter in person at a show is hands-down the best way to make sure most of your dollars will end up in their pocket. If the songwriter is a performing artist also signed to a label, they generally purchase their own CDs from the label for a few bucks each and mark them up for resale. Indie songwriters will have paid for the CD out of pocket in the first place, so they’ll put your dollars back towards the debt they incurred in the recording and printing process. (An indie songwriter CD generally costs $10,000 to $20,000 to make, which includes studio time, musicians, mixing, mastering, photography, graphic design and CD printing costs.)
How Much We Earn: depends on chart ranking
Terrestrial and satellite radio royalties are the bread and butter of non-performing professional songwriters. There’s no easy answer to what a hit song earns, because it’s based on a per-capita weighted split of collected radio tariffs each year, but I’ve seen Top 20 country radio hits earn around $30,000-$60,000, Top 10 hits earn around $100,000-$200,000 and Number 1 songs earn as much as $500,000 in total songwriter share (which is split among all the writers and publishers involved in the song). For Canadians reading this, since Canada’s population is 10% of the USA’s, radio hits pay about 10% of that. And of course earning this money as a songwriter requires having your song selected as a radio single, which only happens to a couple of songs per album released, and even for the luckiest of us this usually only happens a couple times in our entire career! But listening to the radio, whether it’s your local station, satellite radio, or terrestrial radio stations that stream online (such as iHeart Radio), supports the songwriters behind the music you hear.
3. IN-STORE CD or ONLINE PURCHASED DOWNLOAD (eg. iTunes, Amazon):
How Much We Earn: 9.1 cents per copy sold
Buying a CD in a store or online in the USA generates 9.1 cents per song as the songwriters’ share. This number is then split between the songwriters and their publishers, so a song written by two professional songwriters with publishing deals would generate each writer 2.27 cents per copy sold. (Having a song on a platinum record – 1 million copies sold – would therefore generate $91,000 in songwriter revenue to be split among writers and publishers…however, records almost never sell that many copies anymore. And in Canada, record sales are generally 10% of what they are in the USA due to the difference in population.)
4. STREAMING SERVICES:
How Much We Earn: about .00008 of a penny to .05 of a penny per stream
Streaming services are known for their pathetically poor songwriter royalty rates. Each pays a percentage – an unbelievably LOW percentage – of their revenue, and outdated legislation in the USA forbids songwriters’ Performing Rights Organizations to change this rate. This is something songwriters are fighting like crazy to change, and it'll HAVE to change or else we'll be extinct as a profession in the next few years. With a revenue percentage, there’s no way to do the math for a specific answer on what a stream pays. But in general, it’s in the vicinity of 0.00008 of a cent to 0.05 of a cent per stream. So a MILLION streams of a song would earn the songwriter somewhere between $1 and $500 (probably closer to $1, in my experience).
But let's face it, streaming is here to stay, and it's convenient. One way to make yourself feel better about doing it is to buy a copy of the songs you find yourself streaming regularly; I have a policy of buying any song that I stream more than twice, so I know the songwriter will be paid fairly for the fact that I'm enjoying their creation. In addition, make sure you're streaming through one of the "good guys". Here’s how some of the most popular streaming services measure up from a songwriter perspective, according to a performing rights representative I talked to recently. They all pay within the range above, but some more than others:
Good guys: Apple Music, Spotify
Bad guys: Rhapsody, Pandora (the most uncooperative when it comes to songwriter rights)
5. FREE DOWNLOADS:
How Much We Earn: nothing!
OK, so as attractive as those free downloads look – you know, the ones you find in a Google search advertising “free MP3s” or “file sharing” or “torrent” files – please think before you click on them. Those not only pay songwriters zip, but they’re also illegal. So basically, they're bad for everybody involved (except the criminals who are using them to benefit from advertising dollars).
I hope this info is helpful to music lovers out there! Please feel free to comment or share. And if you’d like to be in on further behind-the-scenes posts like this, I’d like to invite you to join my newsletter here.