All Your Sources Of Music Revenue And How To Collect It
For musicians, diversity of income is key, and you should pulling in revenue from a variety of sources, but some artists aren't even aware what all these sources are, much less how to actually cash in on them.
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By Chris Robley of CD Baby from the DIY Musician blog
As a musician, you should be collecting money from MANY income streams. Do you know what they are?
Royalties. Earnings. Income. Revenue. Scratch. Bones. Loot. Notes. Moolah. Dough.
There are a lot of words for money.
There are also a lot of ways for musicians to get paid today.
Independent artists now have access to more revenue-generating opportunities than ever before.
That doesn’t mean it’s EASY to earn money as a musician, but it does mean you have more options to explore, more ways of aligning your talents with an income stream, and more ways of putting your recordings, songs, performances, and merch to work.
CD Baby makes this easy, helping you monetize your music across multiple channels, with the ease of managing all your revenue from one account.
A list of common revenue sources for today’s musician, and how to collect that money:
1. Streaming revenue from your sound recordings
What is it?
This is money you’re owed whenever your recordings — whether you’re the label, the artist, or both — are streamed on platforms like Spotify, Apple Music, or Deezer. This royalty is sometimes called the “streaming license fee.”
How to collect?
With CD Baby as your distributor, we’ll deliver your music to all the important digital platforms, collect the money you’re owed, and add it to your account with detailed reports on your streaming activity across all platforms.
2. Download revenue
What is it?
If you’re an artist or a label, you’re probably owed money whenever you sell a download (on iTunes, Amazon, CD Baby, etc.).
[If you wrote/composed the music, you’re also owed publishing royalties, but we’ll get into that more in depth later.]
For now, we’re talking about the royalty you’re owed for the digital sale of a sound recording.
How to collect?
From download stores: This one is simple — CD Baby collects this money from download stores such as iTunes and Amazon and we pay it to you. We also provide a full accounting of all download activity, plus daily trending reports.
3. Social video monetization on YouTube, Facebook, Instagram, Oculus, and more
What is it?
You’re owed money for the usage of your music in video content that appears on popular platforms like YouTube, Facebook, and Instagram. Those platforms take a “sonic fingerprint” of your recording, and any time your music appears anywhere in their ecosystem, it’s monetized on your behalf.
How to collect?
CD Baby’s social video monetization service is INCLUDED at no extra cost with both Standard and Pro Publishing distribution packages. We work with the social video platforms to deliver your songs so they’ll be properly ID’d — as well as available for use in music catalogs like the one in Instagram Stories; then claims are placed on any video that uses your music. Related revenue is collected by CD Baby and paid to you!
4. YouTube Partner Program revenue
What is it?
YouTube gives eligible channels a way to earn ad revenue on their videos via the Partner Program.
How to collect?
First, do you qualify for the YouTube Partner Program? If you meet those channel requirements, sweet! YouTube will pay ya.
Note: The Partner Program is different from CD Baby’s YouTube monetization service. Even if you don’t qualify for the Partner Program directly, CD Baby will still monetize your music wherever possible through Content ID.
5. Physical sales
What are they?
Money earned by selling physical music media formats such as:
- CD
- vinyl
- cassette
- USB flash drive
- and more
How to collect?
At shows: If you’re selling these at shows, you can put the cash in your pocket or run cards on a system such as the Square Reader or PayPal’s Chip & Swipe Reader. Ecommerce solutions such as Shopify also have tools that help you sell product, manage inventory, and collect customer data at live shows.
From record stores: If you’re using CD Baby as a physical distributor to get your CDs and vinyl into thousands of record stores around the world, you set your wholesale price and CD Baby will pay you whenever there’s a sale.
From CD Baby’s music store: Similarly, if you’re selling CDs or vinyl via our online music store, we’ll immediately add that sale to your account.
For your own ecommerce efforts: Lastly, if you’re doing your own order fulfillment for physical sales (meaning you’re going to run to the post office whenever you sell something), you can use services like Bandcamp or Shopify to create an online store, and payments would be processed via something like PayPal or Stripe, then deposited to you via ACH.
6. Mechanical royalties
What are they?
Mechanical royalties are a kind of publishing royalty (money owed to publishers and songwriters for the usage of a composition, as opposed to a particular recording).
If you’re a songwriter, composer, or producer who creates original music, you’re owed a mechanical royalty for the “reproduction” of your composition. In the physical world, this meant mechanical reproduction in the form of CDs or vinyl. In the digital world, both downloads and streams are considered virtual mechanical reproductions. You’re owed money for all of it!
How to collect?
For global interactive streaming activity: With CD Baby Pro Publishing, we’ll make sure your original music is registered with collection societies around the world and we’ll help you collect all the publishing royalties generated by interactive streaming activity. Interactive streaming is when the user chooses exactly what they want to hear; think Spotify, Apple Music, etc.
For downloads within the US: This is a tricky one to explain, but the short answer is — you probably don’t need to worry about it.
In most parts of the world, mechanical royalties from downloads are set aside by the download store and passed to a royalty collection society, who then holds those funds to be collected by publishers and publishing administrators. However, in the US, mechanical royalties for downloads gets paid to the distributor as part of a bulk payment for the download.
If you use CD Baby, we collect that money and pay it to you. If you’re the songwriter and ALSO acting as your own label, well, it’s all your money anyways. The only time it gets tricky is if you need to pay mechanicals to your collaborators or bandmates. Then you’d just pay the songwriter(s) what they’re owed after receiving payments and reports from CD Baby.
For international downloads: As mentioned above, mechanical royalties for international downloads are passed to collection societies. With CD Baby Pro Publishing, we’ll act as your publishing administrator and collect that money for you.
7. Performance royalties
What are they?
Performance royalties are another form of publishing royalty, owed to publishers and songwriters when their compositions are played on the radio, performed in public, and more.
How to collect?
With CD Baby Pro Publishing, we’ll work in conjunction with Performing Rights Organizations around the world (including ASCAP, BMI, SESAC, SOCAN, PRS, and many more) to make sure you’re earning ALL your performance royalties. Just don’t forget to file your set lists when you perform live, because you’re owed songwriter royalties for those shows too!
8. Non-interactive streaming royalties
What are they?
These are royalties generated from non-interactive streaming on internet and satellite radio services. Non-interactive streams are passive plays that happen when a user is NOT choosing exactly what they want to hear — like on Pandora Radio. Unlike publishing royalties, which are owed to publishers and songwriters for the usage of a composition, these royalties are paid for the usage of a sound recording. They’re owed to the featured artist(s), the session players, and the label that helped create the recording.
How to collect?
The label portion: With CD Baby as your distributor, we’ll help you collect the label portion of these royalties for non-interactive streams on services like Pandora.
The featured artist portion: You should register directly with SoundExchange, and they will pay you the artist share of these royalties.
The session-player portion: If you played on a certain track that sees non-interactive streaming activity, you’re owed something too, and you can collect by affiliating with an organization such as the American Federation of Musicians (AFM), the Screen Actors Guild, or the American Federation of Television and Radio Artists (SAG-AFTRA).
9. Fees for session, production, arranging, or remixing work
What are they?
As a musician, you probably do OTHER work outside of your own music-making. You play on a friend’s record. You help arrange or produce a track for someone in your scene. You remix a song by an artist halfway around the world. Sometimes you’ll work for free or as a favor for a friend, and sometimes — most times — you should get paid for these efforts.
How to collect?
This area is a little more nebulous, as terms are usually negotiable (for instance, should a producer get songwriting credit or just get points?).
One thing is certain: Get your agreement in writing before you collaborate. Determine if this is a work-for-hire situation where you’re contributing your talents for an upfront fee ONLY, or if you deserve some ownership stake or ongoing royalty split.
10. Live performance income
What is it?
The money you make from playing live! Could be the door charge. Could be ticket sales. Could be a guarantee. Minus house expenses, “catering” (cheap beer and chips), and “promotion” (your name in tiny font at the bottom of a monthly calendar in the local rag). ; )
How to collect?
With live revenue, there’s no one answer. You could get paid by the talent buyer before the gig, by the bartender or bouncer at the end of the night, by a promoter stuffing a bloody envelope with crumpled bills weeks afterwards, or with an instant transfer of funds from a ticketing platform.
However the money is due, good luck!
11. Sync licensing revenue
What is it?
“Synchronization” is the act of pairing audio with moving images (video, film, TV, commercials, video games, corporate presentations, etc.) Whenever a song is used in this manner, the songwriter(s), publisher(s), and label must all be paid! Not only that, those rights holders get to set the terms for the sync usage, set the monetary amount of the license, and always have the ability to say “No, go to hell.”
How to collect?
You can handle your own sync licensing, negotiating with music supervisors yourself, or you can use a sync licensing service such as CD Baby — which is included at NO EXTRA COST with both CD Baby Standard and Pro Publishing distribution. We’ve gotten big placements for artists on HBO, Showtime, NBC, FX, MTV, and many more.
Important: CD Baby’s sync licensing service is NON-exclusive, meaning you’re free to use other sync agencies as well.
Just remember, 50% of the sync fee is owed to the label and the other 50% goes to the publisher(s)/songwriter(s). Hopefully you’re all three! If so, you’ll also be set up to collect performance royalties for things like ongoing TV usages, thanks to CD Baby Pro Publishing and your Performing Rights Organization.
12. Merch sales
What is it?
This is when you make money by selling OTHER products besides your recorded music: posters, t-shirts, hats, mugs, sheet music,…
How to collect?
Similar to the CD and vinyl sales mentioned above, you might have an online store you’ve set up yourself, employed an existing ecommerce solution like Shopify, or you just sell these things at gigs. If you’re putting dollars right in your pocket, be sure to keep track of the payments, monitor your inventory, and be ready to stock up again when supply gets low.
You can’t always predict when a song will hit, or how it’ll make you money. Be prepared to collect EVERYTHING you’re owed.
As you can see, there are lots of ways to put your music to work these days.
With CD Baby you’re set to capture revenue in almost all the places your music is most likely to see traction:
- streaming platforms like Spotify, Apple Music, Deezer, and more
- download platforms like iTunes and Amazon
- physical distribution
- YouTube
- Facebook, Instagram, and Oculus
- TV shows, commercials, films, and video games
- radio play
- and more
Chris Robley is the Editor of CD Baby's DIY Musician Blog. I write Beatlesque indie-pop songsthat've been praised by No Depression, KCRW, The LA Times, & others. My poems have appeared in Poetry Magazine, Prairie Schooner, The Poetry Review, & more. I live in Maine and like peanut butter chocolate chip cookies, a little too much.
