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THE SIMPLE GUIDE TO ROYALTIES FOR MUSICIANS

The first step in any artist’s career (besides making the music) is to understand how to protect themselves and monetise their passion. Today we are going to learn about royalties and streaming services.

So how it is exactly that artists earn through streams?

I have to admit, it is not simple to explain and that is partly the reason why most people (and unsigned artists too) blindly rely on streaming platforms.

I’ll try to make it simple though so bare with me one tiny paragraph.

All you need to know for now is that art works very much like real estate. Works of art in fact are called “Intellectual Property” (IP for pals), and this property can be sold or rented.

Through the years we have seen many iterations of such transactions: your uncle bashing on the piano reading sheet music, indie kids queueing in front of Rough Trade on Record Store Day, or you entering in a noisy and dark nightclub, that turns out to be Abercrombie and Fitch. Good times.

In these three instances, intellectual property (music in this case) is rented or purchased.

Now if you remember vinyl, CDs, and cassettes didn’t have a monthly fee to pay, or a “freemium” advertisement-drenched version, and that is because the transaction between the owner of the works and the consumer was a one-off: people would buy a copy and use it for personal reproduction only.

Personal reproduction is the key here. When you were rewinding your VHS of Lady and the Tramp and before the castle logo you would read that notice stating “not for rental/only for private screening”, Walty-D was dead serious. That is because, inside the price of the VHS, CD, Cassette, Vinyl, etc. it was enclosed a fee that was stipulated to be fair for private use.

Rental VHS were much more expensive because the future owner would have earned through the use of the film. That is why radios pay a very expensive license to broadcast music and that is why streaming services do too.

All good then, right?

Well…

Let’s imagine I live in a house on a long boulevard that stretches North to South and has mansions all the way down. I decide that I want to rent my lower floor, so I call the agency and they tell me that they could easily rent the house for me, and everyone else on the boulevard is doing the same, and they are extremely satisfied. Great choice Mr. Bazz! The real estate agent tells me that renters usually pay £10 per month, per person ,and have access to all houses altogether and can switch whenever they want. It sounds fishy but let’s give it a try; I have several rooms downstairs.

At the end of the month the agency pays me 0,0028p.

This is not a math problem, it straight up makes no sense.

What’s really going on here? The agency, or streaming platform, collects £10 for each user, and at the end of the month it divides the grand total by the number of total streams of all artists. The result is the 0.0028p that artists get paid per stream. The underlying issue is that streaming platforms don’t track who listens to who, so what happens is that, if your nan had a subscription and only listened to your music because she loves you, thousands of other artists would take a share of nana’s £10. And it doesn’t work the other way round. So, basically, if Big Millionaire Artist has 5 million people listening to them, a share of their income wouldn’t come to you, independent, unsigned artist.

To make it clearer, the songs that earn the platform the most money in a month will get paid more than the others. So you’re either backed up with labels, managers, PRs, lawyers, and so on, or you have to make the ‘big pot’ work out. Your other options are to get angry, break into Daniel Ek’s house and tie him up until all streaming platforms give in, or look for other sources of income.

One could argue that since the advent of streaming platforms piracy has dropped drastically, and that music industry revenues are rising every year, but is your bank account growing bigger? Didn’t think so.

Of course royalties are not limited to streaming royalties, so here’s a breakdown of all the royalties you might be entitled to.

Mechanical: whenever your songs are put on physical or digital supports. Historically, this meant CDs, vinyls, and cassettes, but today it is not limited to physical supports and also includes streaming royalties.

Performance: when your song is played in public (for examples in shops, restaurants, or TV).

Synchronisation: when your song is played in movies, series, commercials, and so on.

Print: printed sheet music.

The takeaway for today is to differentiate your sources of income if you don’t want to end up fucked by the streaming music business. You should also join us, The Ivors Academy, and the Musician’s Union in the fight against copyright exploitation (aka streaming platforms).

And also get a membership with PRS and MCPS who will collect all your royalties forever! It’s only £100 and it will allow you to track your income. So many people aren’t aware of this that we felt compelled to tell you.

I hope this guide is thorough enough, there’s so much more to say about royalties.

Further readings:

https://www.indiemusicacademy.com/blog/music-royalties-explained

https://www.prsformusic.com/what-we-do

https://www.prsformusic.com/join/writer

Join the fight:

https://ivorsacademy.com/

https://musiciansunion.org.uk/

Invest in Music: The Business, the guide by Ann Harrison: https://www.amazon.co.uk/Music-Business-including-developments-streaming/dp/0753548208/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=&sr=