13 Ways to Make Money from Your Songs

By TuneCore Music Publishing Administration

If you write songs, and your songs are sold, downloaded, streamed or used in many other ways, they’re generating songwriter royalties for you.  Awesome, right?

Nowadays, the types of songwriter royalties earned fall into two buckets: Physical/Analog Songwriter Royalties (generated from old school music industry), and Digital Songwriter Royalties (generated from the modern digital music industry).  With all of the different ways your compositions can be used in both industry models, there’s a good chance your songs are generating money you’re not even aware of, which means you’re missing out on collecting your money, and that ain’t cool. So, to make sure that stops now, we’ve outlined 13 ways that your songs make you money.

But one note before we begin: each income stream and type of royalty explained below is generated from both the original recording of a song or “composition” (i.e. the Beatles’ version of “Yesterday”), and off of a cover of the song.

Physical/Analog Songwriter Royalties & Revenue

#1. Mechanical Royalties

If you’re serious about getting your music out there, you’re probably selling physical products like CDs, LPs or cassettes.  Every time a unit is sold or manufactured, you earn a mechanical royalty, generated from the reproduction of your song.  Record companies or other entities manufacturing products with your song—like The Gap, W Hotel, Putumayo—pay this royalty.  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 list price.

#2. ’Analog’ Public Performance Royalties

Every time there’s a “Public Performance” of your composition, you make money.  Public Performances happen all the time—you play a set at the local pub, your song gets radio play, you hear your track as background music in a restaurant or hair salon—and each time, the songwriter earns money.  So who pays up? AM/FM radio, network TV, bars, restaurants, airplanes, offices, movie theaters…you get the point.  Both in the U.S. and outside the U.S., the royalty rate is determined by a one-to-one negotiation between the Performing Rights Organization (PRO) and the entity where the performance occurred.

#3. Synchronization License Royalties (from the “Distribution” Copyright)

If a film or TV studio, production company or someone else wants to use your composition in a TV show, movie or commercial (hooray!), they need to pay for the synchronization license.  The license fee (both in and outside of the U.S.) is a one-to-one negotiation usually based on several things like the length of the use, how it’s being used (background or up front), the format and the popularity of the production.  Because of all these factors, the fee can range from a few hundred dollars to hundreds of thousands of dollars.

#4. Mechanical Synchronization Royalties

Let’s stay on the topic of Sync for a moment, as there’s also a mechanical royalty generated from the “Reproduction” copyright.  All that publishing lingo means that there’s a per unit royalty payment owed to the songwriter based on the number of units manufactured that include the song (like a greeting card, toy, video game, etc.).  Depending on the type of unit manufactured, 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. Print Royalties

As the name suggests, this royalty, generated from the Public Display copyright, has to do with printed materials—lyrics, sheet music, tablature, etc.  When music publishers like Hal Leonard or Alfred Music Publishing create sheet music, or a company prints t-shirts with lyrics on them, they are required to pay a print royalty.  There’s no government rate for this royalty—it’s a one-to-one negotiation.  If we’re talking sheet music, the royalty is usually 15% of retail price, and/or a one-time fee for pressing is negotiated.

Digital Songwriter Royalties & Revenue

#6. Digital Download Mechanical Royalties

If you write a song and distribute it to download music services like iTunes, Amazon, or Google, you’re owed a royalty for every unit of your music that’s downloaded.  This royalty type 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.

#7. Streaming Mechanical Royalties

Streaming is the name of the game these days, and if you distributed your music to digital stores, it’s likely that you chose a few interactive streaming services like Spotify, Deezer or TIDAL.  In case you’re not familiar with the term, “interactive” means that the user can choose songs, stop, go backwards, create playlists, etc. As was 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 (expected to grow!), and outside of the U.S. the royalty is typically 8% – 10% of the list price.

#8. Digital Non-Interactive “Streaming” Public Performance Royalties

We talked “interactive,” and now we’re talking “non-interactive.”  A non-interactive streaming service is one through which 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 therefore generates a songwriter royalty, paid by the streaming service, like Pandora, Slacker, iHeartRadio, Sirius XM Satellite Radio, cable companies, and thousands of other entities.  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).

#9. 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 individually by the PRO and the other entity, once again 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.

#10. Digital Synchronization License

Sync also applies to the digital world.  We all know it’s common for people to 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.

[Exciting news: TuneCore can now help artists make more money on YouTube, as our Music Publishing Administration service includes YouTube monetization.]

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.

#11. Digital Print

Google any song and you’ll immediately find dozens of sites with the song lyrics, sheet music, or tablature available for your use.  The use of the music on these sites is yet another form of public display, and the lyric sites, musician sites, and even sites with avatars wearing virtual t-shirts with song lyrics (yup, those count) all generate and pay this songwriter royalty.  Once again there’s no government rate set worldwide, and the rate is typically a fee for a specific period of time, and/or a percentage of the site’s gross revenue from paid subscriptions or advertising.

#12. Mechanical Royalty for a Ringtone/Ringback Tone

Ever purchase a ringtone? Or distribute your own to the iTunes store on your phone?  Whenever a ringtone or ringback tone is purchased for a mobile device, a royalty is owed (it’s generated from the “Reproduction” and “Distribution” copyrights).  Music services and telecoms like AT&T, Verizon, T-Mobile, Cricket, Vodafone and more are required to pay mechanical royalties to the tune of $0.24 per ringtone (in the U.S.) and a percentage of gross revenue (outside the U.S.).

#13. Public Performance Royalty for a Ringtone/Ringback Tone

In addition to the royalty generated in the purchase of a ringtone/ringback tone, a songwriter royalty is owed from the public performance that occurs when someone plays the tone outside of the U.S. Once again, the telecoms and music service need to pay up, and the rate is determined by a one-to-one negotiation.

Exhausted from reading this but ready to get the money you’re owed from the use of your compositions? That’s the right attitude! When you get a publishing deal with a publishing administrator, the publishing administrator will license and collect for you worldwide all of the royalties that should be coming to you, the songwriter, and nobody else.  It’s a good idea to get in the know now, because as the music industry landscape keeps evolving, there’s no doubt you’ll soon have more royalties to collect.

  • James Boogie Smith

    I need to start drawing in some new fans can anyone help??? “Young Boogie”

  • Juan viljoen

    Hello, I’m a songwriter but can’t make my songs public its there any way someone can help me @juanviljoen7 songwritersa@gmail.com

  • Good to know.

  • Ella Bell

    Incredible article, I personally found help with VX Media, they were really helpful and gave me over 1500 top and key industry contacts , 2000 sites for me to promote my music an online exposure pack and even promotion on their network which worked great. Check them out here: http://vxmed.net 🙂

  • @HollySteele1111

    http://www.musicxray.com/profiles/2924?afid=6d710a203bc3012fbedf1231381bf5de Music placement opportunities screening artists and bands for hit songs, unique vocalist and various projects

    • I heard that MusicXRay was not too great….Very little actually gets picked up. I don’t know from experience, but submitting a song online for $30 in the hopes of a $7k payout does kind of seem like a pipe dream. Am I wrong?

  • @jessiechambers

    http://jessiechambers.com/music-licensing-opportunities-5-easy-steps-to-getting-your-music-licensed/ – 5 Easy Steps to get your music used in TV, Commercials etc…

  • Oh my Almighty!! Incredible Post.. I could not imagine that a songwriter could have such great opportunities. Also, entering in a songwriter contest can be a wonderful opportunity to win fame and huge money amount. Choice is yours!!!

  • Harisankar KR
  • Eric Vera

    I have some questions, out of topic. I hope somebody can help me out with them.

    1.
    What happens when you release an album and the title of it is band’s
    name? I didn’t knew and I don’t share the same music genre, but, my
    album’s title is their band’s name. That’s it. Will that be a problem?
    Can I get sued?

    2. I’ve been asked by my fans,
    friends and family about my next record, and I want to tell them the
    name of it. But, I wont be releasing it until mid 2017 maybe even early
    2018. So, can I make it public before it’s released? The thing is, I
    also don’t want to release it and finding out that someone else already
    picked that name for a record or something. So, What can or should I do?

    I was thinking about uploading a YouTube video and letting
    everyone know about what my next record is gonna be, so, is it cool or
    should I wait? Usually I go and register my music first and then make it
    public, but this time I want to tell everybody, it’s just that I don’t
    know if I should. I hope somebody can help me with this 2 questions.

    Anyway, thanks for reading.

    • tunecore

      Hey Eric —

      Short answer for these questions is that at the end of the day, artists will unintentionally overlap titles without posing much of a legal risk to their brand. As long as you’re not infringing on copyright (logos, songwriting, composition, etc) and it’s just a similar album name you should be fine!

      As for promoting your next release, perhaps teasing the new album is good enough! Find clever and creative ways to talk about the release without mentioning the title. Maybe as you ramp up to the release date you could run a campaign that slowly reveals the title! Just an idea – have fun with it.

      YouTube is an awesome platform to connect with your base and let them know about upcoming music. You should consider it as a way to communicate with them about anything – no new songs? Post a video about what you’ve been up to or record a cover song! On tour? Let everyone know how it’s going with a personal video. The possibilities are endless.

      Good luck!

      • Eric Vera

        Cool, thanks for the ideas and for replying, I didn’t thought of it like that.
        I’ll start working on stuff for this record.
        Thanks again. (:

  • Chris Deckard

    Hello, I am currently writing/recording a rock instrumental EP. I am not a professional musician, I am a electrician. Anyway a customer of ours who is making instructional videos for his business wants to buy one of my songs to use in his videos. How much should I charge?

  • Naenae

    Hoping for help. My Daughter has a song and a company wants to change it a bit about their company and make a video for it. We wanted to make a video featuring their product but now they are trying to have us change the song and make it about them. I don’t know how to go about either agreeing to make a version for them for a price. Allowing them to buy rights? I don’t want to lose the melody /song / lyrics to them. I have no idea what I am talking about. Can you help?

    • tunecore

      Hey there Naenae – in this scenario, you’ll probably want to connect with an entertainment lawyer, who has more experience with negotiating in this realm. Make sure you have all the specs of what the company wants to do, and an entertainment lawyer should be able to help you navigate it properly in order to not only retain certain rights, but also hopefully get paid!

      We aren’t really allowed to give out legal advice on this blog, but finding someone who can help you get the best deal legally is always a safe bet.

  • Peter

    Just wondering if I was to enable the download option on my songs on Souncloud. Would I get royalty?

  • TPForbes

    My friend wrote and recorded about two dozen R&B songs and had them professional produced to CD’s. They have played on several local radio stations (I think they are nice). He’s considering selling his liberty tho, is there an agency that can appraise his music liberty and place a value on it before he attempt to do so? Let me know, thanks.

  • Chandler Jenuhsis Gunter

    HI IM JENUHSIS YOU CAN CHECK OUT MY MUSIC ON SPOTIFY JUST BY CLICKING THIS LINK!! https://open.spotify.com/artist/0kCo5TcDvDR6x2HeORn2C8

  • raj raj

    we launched an audio CD of Christian telugu devotional songs titled by Vandanam vol.1.please give advice to marketing them.please help us to make another album. my mobile number is 9704710605