We often hear how musical artists don’t earn enough money, but nobody explains how they earn money. Seems obvious - live shows and streaming. But it's actually more complicated than that.
Here's a quick overview.
What is a Song?
A song is made up of two parts
- Composition - the written words and musical notes
- Recording - the recorded performance of those words and notes
The Composition, Composer, Publisher
You write words and notes on a page. Without it being played or heard, you are now a composer and have the right to earn money from the copyright in your composition.
A publisher is someone who represents and sells the use of your composition.
The Recording, Performer, and Label
Someone who sings or plays music is known as a performer.
When they perform your song and it gets recorded, they have created a Recording. They have the right to earn money when that recording is used.
This performer is often know as the performing artist, or just artist.
A label is a person or company that assists with creating and monetising the recording and shares in the revenues it generates.
Revenue Streams
Now we understand the what and the who, let's look at the how. The main revenue streams for a song are:
- Mechanical: Earned only on the composition whenever it is reproduced or copied. e.g. manufacturing 1000 Vinyl Records.
- Sale & Distribution: This is earned for the recording and is what we generally think of when a record is sold or streamed.
- Public Performance: If there is music on the speakers at your favourite cafe, both composition and recording need to be compensated. If someone is performing that song live, then only the composition needs to be compensated, because the recording is not being used.
- Synchronisation: When music is playing together with a video, this is called “sync”. Film, TV Show, and Commercial makers need to get a license to use music in their productions.
- You're thinking "what about concerts?" - The performer gets paid for their appearance, not because a particular song is used. The composer is compensated for the public performance of their song.
Next time you hear someone talking about earning money for music, you'll now be able to think about what role they're playing and therefore what their potential revenue streams will be.