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How Do I Make Money From My Songs?

by Hugh Hessionmusic success

Are you a songwriter who is searching for the different ways you can make money from your songs? Don’t go anywhere! This will give you the answers you need.

For starters, I want to define the two types of income as it relates to you as a songwriter. One is active income, the other is passive.

1. Active Income
Active income is performance based pay or more specifically, the money you get in exchange for your services. The majority of people make their money this way. You go to work for 40 hours, you get paid at the end of the week. Done deal. As a songwriter, active income is money that you will earn on what I term “one-shot” deals, where you get paid once for the use of your song or songs in a work for hire, film, television or whatever the project may be.

2. Passive Income
Passive income is money you get for not lifting a finger! This is when it gets good, because pas­sive income is ongoing! For a songwriter, this would be specifically defined as residual income in the form of song royalties. Bands like Jour­ney and Bon Jovi are still getting checks in the mail for their older hits. (Yeah I know, nowadays they are electronically wired but getting a check in the mail sounds more enticing!) Journey’s “Don’t Stop Believing” is the best selling catalog track on Itunes, with downloads in excess of 2 million and the only catalog track in history to garner double platinum status. And this doesn’t include what they make from getting played on the radio and television! By the way, a catalog track is a song that has already been previously released. You often see older artists on these catalog charts, such as The Eagles, Pink Floyd and James Taylor.

Now, let’s check out the different income sources you have as a songwriter!

So now that we’ve covered the two types of income (you can’t take your mind off the passive income, can you?) – understand that as a songwriter, it is up to you to act as the administrator of your songs so you can properly capitalize on the many income opportunities by licensing your songs. If you form your own publishing company, you can hire someone to administer your song catalog, or you can do it yourself. I also recommend that you search out for a good entertainment lawyer, as negotiation often plays a large role in the business of licensing songs.

I’m going to give you options. For those who want the quick list, I have it! For those of you who want detail, not a problem. Just read on.

How you can make money as a song­writer (the quick list)
• Through the use of your songs in films, television and video
• By letting others record your songs in any format
• By getting your songs played on the radio, television & in public
• Digital stream broadcasting
• By letting others use parts of your song(s) in samples and loops.
• By getting your songs into print
• Through the use of your songs in midi form, video games etc.
 
For those of you who want the detail... read on!

Audiovisual sync (film, television)
Broad­cast to public
This includes the use of your songs for broad­cast in television, film, video and YouTube! You will get paid by the person using the song. The license you will issue is known as a Synchronization License, or better known as a sync license and is negotiable. If the songs are exist­ing, then another type of license would come into play, called the Master License, for use of the master recording.

Sale to public
Additionally, you can make money through the sale of your music to the public, such as a DVD. This is a Videogram License – also negotiable.

A word about video streaming
There is no regulated license for video streaming, however record companies do police it, especially on YouTube where it pertains to what is called User Generated Content (basically, homemade content such as making a personal video over a Beyonce song). These type of “licenses” are completely negotiable and often include “take-down” rights, where they can demand that the song is taken down if the song is synced with questionable material that doesn’t favor the artists image.

Use in recordings
If someone wants to record your song, then they will have to pay you to do so. This is NOT a negotiable price and is enforced by the United States government under what is called the statutory rate which is currently 9.1 cents or 1.75 cents per minute of playing time or fraction thereof, over 5 minutes in duration. You would issue to them a mechanical license and if dealing with digital download rights, a digital phonorecord delivery license (DPD).

There are two general types of recording usages, and these include physical copies, such as a CD and also, permanent digital downloads. So for example, if Joe Artist came to you and wanted to record your song, he would have to pay you 9.1 cents multiplied by the number of CD’s or a given amount of downloads projected.

Use in performance
You’ve heard of BMI, ASCAP and SESAC. These are performing rights organizations, and any songwriter can join one. If you want more information about these PRO’s, I have written several articles that you can check out.

Radio, television and live performance
When you register with a PRO, then you can receive performance royalties from radio airplay, television, or if your songs are played in an establishment. One thing to understand here, is that it’s the songwriter that makes the money here, NOT the artist. The catch is getting captured in a given PRO’s statistical analysis. Unfortunately, it typically takes a considerable amount of airplay or performances to see any money from this source.

Digital stream broadcasting
When your song is streamed over the web or satellite radio, it is known as a non-interactive DSB (digital stream broadcast). When your song is connected to a music player that users can rewind, fast-forward and play, then it is interactive. Both have to be licensed through a DTR (Digital Transmission Right License), while the interactive DSB has an additional mechanical rights license. Royalties are paid through your PRO and the user of the mechanical license.

Sampling
Others have to pay you if they want to use even a portion of your song in a sample or loop. This is simply known as a Sample License and the nice thing, is that this is completely negotiable.

Print
You can get paid for having your songs in print form, such as sheet music. This is yet another negotiable area. This is usually reserved for major recording artists, although anyone legally has to pay up if they use your music in print form! Use a Print License.

Other areas
Any other areas related to using your songs for income opportunities falls into this category. This could be licensing your songs for video games, a derivative work, or even a midi file (amazing how many non-licensed midi files there are on the Internet... it’s quite illegal!). All negotiable.

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Hugh Hession - the creator of makingitinmusic.net - has been a part of the music industry for more than 20 years as a performer, session player, producer, keyboardist, vocalist, composer and artist manager. His songs have been published and recorded by a variety of recording artists, in addition to composing for television and corporate projects.

In 1996, Hugh started Rubicon Entertainment; a regional publicity and management company where he successfully promoted the careers of many bands and recording artists. He is currently an entertainment expert on Justanswer.com, specializing in the music business and writes for examiner.com.


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