Photo by Tom Pottiger on Unsplash
So, really – how much do songwriters make? Ahh – royalties! Hmm, isn’t that the question everyone really wants to know. Especially in the world of online streaming, we all want to know what a hit or juicy album cut might be worth.
“Rich Money” by Anderson .Paak
And really – can you make a solid living full time writing songs, etc.?
For instance, maybe you already are a “professional” songwriter, or just getting your first cut (meaning a placement with an artist), or you’re thinking about jumping into the songwriting profession full time. All this is such hard work – is it really worth it at the end of the day?
Or look, maybe you’re just a music fan and curious what a hit song is worth and how much songwriters make?
I got you.
Make no doubt, while this post will partially focus in on the “professional songwriting” world (i.e. writing songs for other artists and co-writing their songs), this post also 100% applies to any artist who’s already uploaded their songs, getting a few hundred thousand, millions or hundred of millions of streams.
What is a big song worth at the end of the day?
Hopefully better than minimum wage right? LOL.
Well that all being said, this is my own opinion based on experience and seeing real royalty statements come in over 25 years being a music publisher. You see, I’m not a doctor – I just play one on TV.
Vicks Formula 44 with Peter Bergman
So, let’s get into this – songwriting royalties! First, some ground rules.
In case you didn’t know – I’m sorry to break the news to you – someone like Britney Spears or Rihanna doesn’t (*usually) write their own songs. Which is totally fine! Neither did icons Frank Sinatra or Tony Bennett (at least their classics).
And to use a Hollywood “script” analogy, the professional songwriter role – it’s like when you’re watching your favorite film or bing watching a (non reality) based TV series – it’s not Bryan Cranston (usually) who’s writing lines in “Breaking Bad” like “Skylar I am the danger,” or “I am the one who knocks,” or “Say my name … Heisenberg – You’re Goddamn right.” Nope.
It’s the behind the scenes writers and producers who are famous in their own right for crafting, solely or more often, cowriting, the amazing melodies and words that go into the voices on the center stage.
Additionally, nearly every artist also collaborates.
Yes, that’s right practically every song from Adele, Beck, Kendrick Lamar, Nine Inch Nails, Justin Bieber, Kanye West, Lana Del Rey, ________ (fill in the blank of your most esoteric hipster Pitchfork artist), was probably a co-write of some sort, often with a producer, sometimes with another songwriter. And sometimes a famous song by an iconic artist – wasn’t even written by them at all.
For instance, “Because the Night” by Patti Smith was written by Bruce Springstein.
And ironically Barry Manilow’s “I Write the Songs” was written by a guy you never heard before named Bruce Johnson.
And let’s be real – wouldn’t that be incredibly cool to have one of those songwriter jobs and contribute to an amazing artist’s body of work?
It is.
I can tell you since I’ve worked with hundreds of hit makers and also hundreds of songwriters on the verge of having their first hits, all these people can make a pretty great living.
So, really … how to make money as a songwriter?
What’s a hit or an album track really worth at the end of the day?
Does the publishing fairy come and visit you at night and place an ASCAP or BMI check under your pillow?
South Park
Well – it’s something like that. But it’s all not fantasy land.
How Much Do Songwriters Make?
Let’s really just get into it here with some facts and figures.
Now, it used to be entirely different. And I say this being a past songwriter myself. I’d say there’s at least 3 different worlds to look at depending upon the world you’re living in.
First, there’s what I would call the current environment … where most income is being made from streaming vs physical sales.
Secondly, the synchronization world, where a lot of professionals earn the majority of their royalties from getting their tunes used in Film, TV, ads, brands, video games, etc.
And thirdly, there’s also the world pre Napster … meaning the real apex circa late 90s / early 2000s where you had the opportunity to make boatloads of cash as a songwriter, especially with mechanical royalties (which in those days were generated from the sale of CDs, cassettes and vinyl). Let me explain.
Pre Napster HeyDays
Ahh yes, the world pre-Napster.
This was (so far) in the music industry the heyday for professional songwriters. For those of you under the age of 25, Napster was an illegal file sharing peer to peer service where you could get any and every Mp3 file for free.
Before Napster if you wanted just that “one” song – you had to drive to a record store, buy the CD for $14.99 +. It was what it was. On one hand – great for songwriters … because with royalties all the songwriters benefitted from that one CD sale.
On the other hand, customers just got tired of that system and felt ripped off (rightfully so). I mean – we paid over $15 … most of the time just to get 2 really great songs and another 10 songs of trash. I mean really that’s what it was. Now – that might have sucked for the consumer – and it did. But for a professional songwriter – it was awesome.
How?
OK – Let’s say you didn’t write the single on, say, any of Whitney Houston’s biggest albums. It didn’t matter. Just because you wrote a song and were on the ALBUM, and maybe even people didn’t even care specifically about your song – you still got paid on 20 Million album sales! Holy crap. Yes – all those mechanical royalties! Dahhmm. I mean back then in the 90s and early 00s, as a professional songwriter, if you got 1 song on a Whitney or Celine Dion album – you could retire. And in style.
Wolf of Wall Street
Doing the Math & Getting Paid
So what are we talking about here.
The easy calculation, when it comes to how much songwriters make, in a pre-Napster world, would be to take the number of global album sales and multiply it by what they call the mechanical rate, factor in other deductions (this is all the b.s. stuff he labels had – and still have in place like breakage, returns, reduced mechanicals etc), and divide it by your share of the song you wrote.
Ahh, Deductions (because the labels really respect you)
Before we get into the nitty gritty – let’s talk about “deductions.”
What’s that? That’s how labels get to pay you less songwriting royalties. Welcome to the music industry!
Deductions are things like “breakage” or “free goods.” And for this you usually would factor in a deduction of 15%. Yes, this is factoring in that 15% ish of the CDs shipped would show up broken, damaged and maybe even returned. Also, “free goods” are like promos, free giveaways, etc. (Somewhere there’s a music attorney reading this and wanting desperately to put their .02 cents into the comments section to further clarify this and possibly correct me with some nuances, but whatever, bro – this is a blog post).
Mechanical Royalties and Rates
But we’re still not done on what gets subtracted from your current pay out as a songwriter. You’d also have to potentially calculate mechanical rate deductions. Whoa whoa – I know you’re probably asking – first, what’s a mechanical rate? Yah – no prob here.
A mechanical rate is a type of royalty that the label (or today streaming services) payout on an individual sale.
For example, if someone buys a vinyl, cassette, CD, digital download – that’s a mechanical royalty.
Currently the mechanical rate (which songwriter and publishers in my opinion have been totally screwed on) is .091 – apparently going up to a whopping .095 cents soon (after what seems like 15-20 years). That’s right, songwriters, haven’t received a pay raise in forever – don’t get me started!. Keep in mind that most songwriters have to pay their dues for thousands of hours in their career before making any money. This is attune to a cashier position or other minimum wage job not getting a pay raise since 2005. Criminal. Wouldn’t be stood for. But I digress. (David Israellite – let’s get it together.)
But back to this .091 cents.
That means for every digital download or CD sale, etc. the songwriter gets .091 cents (assuming that they wrote 100% of the copyright). If you wrote 25% of the song then you’d get .091 x .25 (25% of the song) = .02275 cents. I’m rich!!!
The “Controlled Composition Clause” (another great way to get paid less!)
Oh, but not so fast.
There’s also something the labels would throw on you which is a controlled composition clause. As a songwriter (and/or your music publishing company), if you agree to this – then your payout becomes further reduced. Wait wait … why would I ever agree to that?
Here’s how it works.
The recording artist has an agreement with their label, in which, their agreement specifies how many songs the label agrees to “pay out” per single, EP or album release. This is called the “controlled composition clause.” So let’s say you’re a fairly new artist and you don’t have much negotiating power. That controlled composition clause in writing might say – “OK, artist, we’re going to pay out a maximum of 10 cuts for your album – but only at ¾ rate” (or 75% of what you deserve, including, potentially, your co-writers).
Whaaaaahhhh? OK, label, so you love me but you’re only going to allow 10 of the songs to be paid – and at 75%? Spoken as Milton Erikson, “That’s right.”
But there’s more behind the controlled composition clause. This contract really means additionally: To boot if you decide to release 12 songs instead of 10 – you can do that, but then every song and every writer gets prorated less across the board.
Hmm. This is getting interesting, isn’t it!
Now, a controlled compositions clause of 10 songs x ¾ rate is fairly common. So, let’s say you’re a bigger artist and have more leverage and your record deal has a controlled composition clause, per album, of 12 songs at “full rate.”
OK, that’s a little better. This means the label will pay up to 12 tracks at “full rate.” That’s great.
But let’s say you’re Kanye West, and you release 18 songs on the album and every song has a sample in it (and usually more than one sample per song) and all the tunes (including the samples) tally up to 24 100% songs! (It happens! Trust me.) Well – you can do the math pretty easily. In this case, if you agree as a writer or a producer to the artist’s controlled composition clause but are able to negotiate a full rate…you still don’t get full rate! Why? There are 24 tracks to pay out on (including samples that pushed the cap beyond the limit) and the max the label will pay is 12 songs. So that’s a 50% payroll reduction and haircut to everyone! Welcome to the nuanced world of mechanical royalties.
It happens all the time.
And p.s. don’t worry – we will soon reveal that burning question on “how much do songwriters make,” but first I need to let you know some of the ground rules for calculations.
Putting the “Squeeze” on Songwriters
So why would you ever, as a writer or producer, agree to being what they call a “controlled writer?”
Like why would you ever say “OK Sure, I’ll take 75% of what I’m worth.”
South Park
Really? Well, unfortunately this happens all the time. And it’s not like the songwriter can make money by other income means for example: touring, merchandise, brand endorsements, etc. For songwriters – songwriting and publishing income is the ONLY way they get paid. So why would you ever say – “Sure, I’d LOVE for you to screw me over.”
Remember, as a songwriter, if the label doesn’t have an agreement with you and you haven’t agreed to the artist controlled composition clause – they have to pay you FULL rate.
Jerry Maguire
Now that being said – there are a couple circumstances where ¾ rate (or less, depending on the artist’s controlled composition clauses) just happens and to be honest – it’s kind of common in the music industry.
Remember – if you sign off on and agree to the artist’s controlled composition clause (which is asked frequently), it means that you agree to be bound by the artist’s rate and for that number to possibly be prorated further, depending on the number of songs on the album. But it’s also not the end of the world.
Here are the 2 most common circumstances where the controlled composition comes up:
- Producer Advances: You’re the producer of the song and are getting a producer advance. The label argues – Hey, you’re getting a producer advance (which can range from $5,000 – $50,000, depending on your cache, status and going rate), and therefore, we are only going to pay you 75% (¾ rds) of your songwriting royalties.
- Noobie Tax and The Squeeze! The other reason – and this is more shady – but it happens all the time often with new writers. You’ll get a call from the A&R person or from the artist’s manager and they’ll say something like, “We recorded 15 joints for the album and our controlled composition clause is full rate x 12 songs, if you don’t agree to being a controlled writer – we can’t guarantee your song will make the album. At all.” These tactics happen all the time and let’s be real – it’s crappy. Especially when songwriter and publisher royalties are under fire from streaming. On the other hand – songwriters and publishers ARE getting paid full rate usually from these services – and the ¾ rate reduction is only tied to physical purchase and downloads, so it’s not as big of a deal as it is today, as it was in 1999. But still … you’re asking me for work for 25% less. Not cool.
Finally – Some Calculations!
OK – that took a whole tangent on “deductions.” I hope you can appreciate the above “publishing company” lesson, so you understand the calculations journey we are now embarking upon.
How much do songwriters make?
Let’s time travel back to 1997. And this is a real story.
I personally just got my first cut as a songwriter. It was a lil ditty I wrote called “I Don’t Wanna Kiss You Goodnight” on a pretty huge boy band at the time called LFO on Clive Davis’ record label, Arista Records.
I would say globally they sold about 4 Million CDs (remember this is before Spotify, iTunes, Apple Play, YouTube etc). Now, even though it was their third single – it never became a smash – so really, I only have albums sold to look at for my income.
So, how much did I earn for that one?
Here’s the math. Let’s work out.
Yah – $77,350! And fortunately, I was paid at a full rate on mechanical royalties, as I was what they called a “non controlled songwriter.”
Not bad for an afternoon’s work and some hustle in pitching (I also got pitched and placed with the A&R person. Meaning I had a relationship with LFO’s A&R person and sent him the tune for consideration and he said “Yes!”
Thanks, Keith Naftaly!).
Keith Naftaly via Facebook
OK but we’re still not done!
That $77,350 in songwriting royalties just doesn’t show up under your pillow via the fairy Godmother publishing fairy. Oh wait, it does – that is, if you consider music publishers a mythical entity. And hmm – maybe they are! : )
Music Publishers and Commissions
Keep in mind, you have to further reduce this amount (the $77,350), because those royalties need to be collected around the world somehow. And we need a music publisher to do that, most of the time. (They’re worth their weight in gold, in my opinion – but then again, that’s what I do : ).
OK – but how much does that cost?
Well, if you have an administration deal – that amount can be reduced by 5-15% in order for the royalties to be collected.
If you have a co-publishing deal (often where you’ve been given an advance upfront and offered creative pitching services), this can be more like 25-35%.
For the purpose of this blog post and calculations – let’s just say on average 20% from that total amount (the $77,350) may need to be deducted for your “net” in order to get these royalties to your bank account. And BTW – trust me – you don’t want to try to collect this all yourself and try to self administer. I’ve been doing this for over 25 years and the last thing I want to do is to try to handle all the licensing, blanket licensing, etc myself. It’s a very complicated global endeavour!
So let’s keep going.
Now that we know that a publisher is in the mix and take a portion to collect your royalties. Well, what does that look like?
Easy. Let’s take your $77,350 and take 20% from that amount (20% to pay a publisher on average). So as far as what lands in my account – this might look like $61,880 in the bank, at the end of the day.
SNL
Remember, this is assuming the calculations are based on a non controlled writer status (which I was in the above case). I was on what they call a full rate.
But let’s say you produced the song or got politically squeezed in agreeing to the artist’s controlled composition clause? What happens now? What is your piece of the pie now worth?
Well – again, fairly easy. You would just deduct an additional 25% in that equation. Let’s look at this again with that in mind.
And then if you have a publisher on board you’d reduce the $55,012.50 appropriately – so that’s probably more like: $46,410. And hmm – wow, you can really see that taking that ¾ rate – really makes a difference.
That’s nearly a $30,000 difference at the end of the day.
So, yah – if you are an attorney who represents an artist and is trying to squeeze one of my clients for ¾ rate, to be a controlled writer “just because” and especially if the album is already out or coming out next week – well SURE! I’ll take ¾ rate if you also agree to take a salary break of 25% yourself – also, just BECAUSE.
The Office
Getting By vs Making “Bank”
OK – well, that album cut on LFO’s album. Not bad. That’s not a terrible living, much less in 1997 for one song! But let’s put this into perspective of one of those big Whitney Houston albums – how much did one of those writers make – just being on the album? And I’m going to warn you, after reading the below, you might be asking yourself – How do I get myself one of those songwriting jobs?!
The Most Expensivest
Well let’s say you wrote a song on one of Whitney’s albums, selling 20 Million copies. Let’s plug those album sales into an equation and do the math. And let’s just pretend that your song was “just” on the album. Additionally, we’re going to assume you were a 50% writer, meaning you co-wrote the song 50/50 with someone else. Here we go.
Dahm! $773,500. That’s for ½ of 1 song on a superstar album. Yes please! Keep in mind that a professional songwriter might have 10 releases per year! But obviously, getting a Whitney cut back in the day was the jackpot.
And notice we’re not even talking about other royalty streams! This is just mechanicals – i.e. physical CD sales!!
So, if your song was a single, and received massive radio globally around the world on radio stations, being performed in stadiums, in shopping malls, etc … OK – well, now you’re really talking and you could easily multiply the mechanical royalties in either of the examples above by a factor of 5-10X to account for all the performances. These are called performance royalties. Anytime you hear a song “out and about” and played on the radio, in your car, in a store, at a concert being “performed” – that’s where ASCAP, BMI, or SESAC comes in and collects those royalties (in the United States)!
That’s right Lionel! Yes. It’s amazing. So in that case … maybe your share of the Whitney Houston song could be somewhere around $4 Million – $8 Million bucks!
On top of that you can add what they call synchronization licenses.
What you say?
Yes, if you’re watching your favorite TV show, or YouTube ad comes up, or a song is used in a film – basically, anytime a song is “synched” or matched to a moving image, or like a radio commercial for a product – the songwriters and publishers get paid a “synch” fee for that use.
The Streaming World Model – How Much Do Songwriters Make Today
So we looked at an old school model. What about today’s music industry?
How much do songwriters make say in a post CD world. And (as I shed a tear), this is where you’re going to start seeing some disparity and potential doom and gloom compared to the “heyday” we previously reviewed.
Don’t get me wrong – there are many writers out there that are KILLING IT!!! But in order to really have a living as a songwriter these days (this includes yourself as an artist writing for yourself), you need to have a combination of quantity and quality (i.e. singles!!!!!) releases, including synchable songs.
You see – just being a writer and getting on a superstar artists album, that streams – just doesn’t really matter anymore.
Literally – you can get on Selena Gomez or Kanye West’s album – and as a writer – still be living below the poverty line – I’m not kidding!
On the other hand – if you write one of their singles and the song blows up on the radio – you’re golden. We’ll take a look at that too.
But first we need to know what streams are worth to the songwriters these days.
Ahh isn’t that the golden question. How much money do I make as a songwriter off streaming? And not to sound koy – but – it really depends.
1,000,000 Streams = “X”
As a general rule of thumb, 1,000,000 streams (say on one of the key DSPs) might (and I say might) generate the songwriter about $850, all rights reserved. (Yes, eight hundred and fifty dollars).
How much is the label making? Oh probably like $4,500. Yikes. Them labels again! But all good, that’s just what it is.
Now, I’m very reluctant to give out that $850 per millions streams figure. It’s apparently a pretty complex formulae and it varies WILDLY from company to company..
For instance, there’s a pay out on streams from premium subscription listeners, and there’s a lesser rate that gets paid out for free, ad supported users, etc. Let’s just call it for what it is and work with that for an average. $850 per 1 Million Streams (Please note this does not include YouTube – for YouTube you’re getting way less – that’s a whole other blog post. For most calculations when I’m ballparking a song value, I don’t even really consider YouTube royalties – though, it all adds up. And BTW – Soundcloud – is just about a zero in my opinion.).
I Made It! But I’m Still in Poverty?
So, as mentioned … how, as a songwriter, can you seemingly “make it” and get on a cut on a big artist’s album, but still be in poverty?
The Simpsons
Let me explain. And again, these numbers are all rights reserved and just used for education purposes and are solely my opinion.
Let’s say you were a songwriter and you landed a placement on Selena Gomez’s 2019 “Revival” album. Yahoo! And you were a 20% writer of the track (that’s also the thing these days – look at most credits on pop albums or hip hop, etc. and it’s super common to see 5+ writers on one song. Really everyone?). So, let’s say one of those songs streamed – (we can tell by looking at Spotify), 25 Million times. Ok here’s what that looks like.
25 Million streams
25 (remember we’re using 1 MM streams = approximately $850) x 850 = $21,250
X .20 (remember, in this example, you wrote 20%) = $4,250.
I did it! I got on a superstar artists album! I’m rich! Hell no, bro!
Four – Thousand Two Hundred Fifty Dollars. What!? Oh but wait, that’s just one service. Let’s look at the big picture:
$4,250 – one streaming service (that maybe starts with an “S”)
+ $4,250 – maybe double this figure for all the other streaming companies
= $9,500.
Oh – I forgot to factor in the publisher’s share that needs reduced for them collecting. Let’s shave an average of 20% off that.
Now we’re at $6,650.
Really?
So you can see from like a 1997 example to today – just being a songwriter “on the album” – you’re talking about $61,880 that I would have received as a songwriter in 1997 for a similar sized artist vs. $6,650 today.
40 Days and 40 Nights
Oh wait – I didn’t even adjust for inflation.
$61,880 (1997 money) compared to that same value today is $99,721.75.
Yes, we’re talking nearly $100,000 (that I got paid adjusted for inflation in 1997) vs $6,650 for a songwriter today, as a comparable example. I’m not kidding. Professional songwriters have taken like a 90% + hit in their income in the modern streaming world. That’s where we are today.
It’s shocking. It’s sad.
But that’s not all you make of course as a songwriter.
We need to calculate performance royalties (these are royalties, as mentioned, which you earn when your tune is on the radio or being performed publicly.
As an example, you know all those Billy Joel songs you hear in the supermarket – Billy Joel is making bank (those are performance royalties), and also synchronization licenses, Karaoke royalties (that’s a real thing) and Print licensing royalties (“print” royalties are like sheet music, online guitar tablature, etc).
But here’s the thing – your song was just an album track – ain’t nobody got time for that! Who cares?! Meaning – you likely won’t really have any synch fees or performance royalties to add on to this figure. A little – sure. But not much. Why?
No one cares about your album track!
Your album track is not getting played on radio, hence – not famous, and thus music supervisors don’t need your “nice album track” to synch in their latest film, TV episode or commercial.
Likewise, Citibank wants the big song of the day or the classic for that big ad campaign. The latest TV show wants a popular song – not an afterthought buried as track #9 on an album that no one has heard.
The Voice
So you’re kind of stuck with like $7,000 or so of royalties. Yikes and Yuck.
Quantity
Now – here’s where quantity comes in.
If you’re doing that 10 times a year you can multiply that x 10 and you’re looking at $70,000, hey that’s not bad. I guess?
But how many professional songwriters are getting on 10 superstar albums per year. Let me tell you. Very very very few. It’s hard out there.
On the other hand, there are way more releases coming out! This is a great thing for the professional songwriter.
For example … you might not have a tune go all the way to radio and climb the Billboard charts. Yet, I have so many songs in my publishing catalog, many of which you’ve never heard of, that weren’t radio hits – but still got 50 Million streams, 100 Million, 200 Million streams on Spotify. So that’s the silver lining.
Most Expensivest
As far as record labels and DIY releases, there are way more releases and opportunities today than there were in 1997. Way more. Keep in mind that those 100 Million streams – are still singles in some form. They just might not have gone all the way to a huge radio campaign. To quote Stuart Smiley – “And that’s … OK.”
But still – it comes down to this. And this is also why, in 2016, I had an emergency meeting with all my songwriters.
The subject of the meeting was – you won’t make a living as a songwriter anymore – if you can’t write singles.
For professionals, it’s either writing singles – or supplementing your rent with Uber fares. I’m not kidding. And if you want to know the secrets of hit songwriting – I suggest you take my online course here where I show you what 99% of most songwriters don’t know.
https://benjamingroff.teachable.com/p/insider-secrets-to-hit-songwriting
OK … so thanks for all the doom and gloom … I’m just going to delete my Pro Tools forever, move to Alaska, hunt moose and pick blueberries for the rest of my life.
Not so fast!
Unlike Hunter Thompson’s famous, morbid quote about the music business – there’s a silver lining here. No, there’s a silver, gold and platinum lining!
Let’s say – you are writing those amazing smash singles. Or you’re making uptempo synch bangers that the music supervisors just eat up.
What does that revenue look like?
OK. Since we were in “Selena mode” and using an album track as an example … Let’s stay on the Selena train and take a look at one of her radio singles. And I’m not going to pick one specific song here – because I could easily be calling out a particular songwriter’s income. Let’s pick a pretty big hit, one that’s streamed over 500,000,000 (500 Million) times on Spotify (again, just using Spotify since every track’s plays are public).
Let’s take a look at an example of royalties:
500,000,000 Million streams
500 (remember we’re using 1 MM streams = approximately $850) x $850 = $425,000
X .20 (if you wrote 20%) = $85,000
Not bad … better.
And let’s multiply that x 2, to account for other streaming services, and that gets us to $170,000, less a publisher’s share (assuming 20% less) = $136,000.
Hey, that’s not a bad annual salary. Ahhhh but it was a single!!!! Now we’re talking.
And how do you account for public performance royalties and synchs?
It’s really a puzzle to be honest. And again, it depends. For example, I know and have worked with many of the best publishing analysts, who are excel spreadsheet Harry Potter wizards. Furthermore, these analysts have all kinds of comparable data and deep tools at their fingertips to evaluate song value. For our purposes here and the question, “how much do songwriters make” – we’re just going to take a ballpark reading.
A general music industry rule of thumb (and this is wide guidance) is that a big global hit could have $5-10 Million Dollars of royalties attached to it. And that’s like within a 5 year window (royalties generally fall off a cliff after 5 years).
On the other hand, if a song is a REAL copyright and continues to get perennial radio play, listened to, synched, downloaded, playlisted, listened to – and COVERED! (yes, people are making covers or sampling it) … then, all of that compounds further. This is why some publishing companies are paying 15X + times the annual net publishers share (NPS) to purchase these hit assets.
But in the above example. I would say you could take $136,000, multiply it by a low, medium and high estimate – and you might have a valuation. And look – I am not an analyst here – at all. But I’ve done hundreds of music publishing company deals where I had to analyze and figure out what a certain deal might be worth.
Law & Order SVU
If we stick with our Selena Gomez hit example, we could look at that one track – that streamed 500 Million times on the one service. And say a low, medium and high valuation might be (for the writer who wrote 20%).
And remember – this is kind of like the 1st 5 years valuation picture, if I were to guess. After 5-6 years the revenue plummets and falls off a cliff. But keep in mind this would be your 20% share after a publisher’s share is taken off the top too. So hey – that’s a pretty great living, somewhere between $680,000 and $1.3 Million or more). And maybe – you could even buy a 1 bedroom shack in Los Angeles. I kid. I kid.
Now – I know what you might be thinking.
You might be an independent artist saying – I could care “f” all about Selena Gomez. What about me? I’m an artist / songwriter and I want to know – how much money as a songwriter do I make – when it comes to my own releases.
What does that look like?
The DIY Indie Artist / Songwriter
So, this is the 3rd pillar in the whole income picture when it comes to songwriting royalties.
You might not be getting “hit songs” on the radio or even these big album cuts on superstar artists. But you might be scoring some points for your own artist project, or maybe you’re a writer/producer for other artists and achieving 1 Million streams, 10 Million streams, etc on those releases. And just maybe those releases also get some nice synch placements.
Well strap my boots on and phone China (or insert ______ another country of your choosing).
You might be an artist or a songwriter with only a few million streams on Spotify – but you might be releasing great songs – in fact, a certain level of greatness I affectionately call a “synch banger.”
No, a “synch banger” is not some underground porn BDSM club. A “synch banger” is just one of those great songs with visual energy, usually uptempo, sonically interesting, and just elevates and creates a special energy when “synched” up to picture.
I have plenty of clients who might have a song on Spotify, streamed less than a million times, however it’s a song that music supervisors love and thus, continually gets synchronization action!
What’s that worth? Let’s look at a scenario. We might have on the low end for “that type of song” – 3 synch licenses for an average of $4,000 each. And maybe on the high end 20+ synchs for that song. Including some juicy brand advertisements – elevating the average synch to like $8,000.
So, what could these royalties look like? And this is not a bad case scenario for your songwriting job, as have plenty of examples like this:
Let’s say we have a song with 5 Million streams on Service “A.”
And let’s say you’re a 40% writer on average (I see more of the independent releases being more 3 way or 2 way co-writes). Let’s take a look at this valuation.
5 Million streams
5 (remember we’re using 1 MM streams = approximately $850) x $850 = $4,250
X .4 (if you wrote 40% of the song) = $1,700
$1,700 x 2 for other streaming services = $3,400
Less Publishers share (20%) = $2720
OK. $2720. Mmm. It is what it is.
But don’t forget – you might have a synch banger here! So let’s take a “medium” and “high” look at synchs as previously mentioned.
And since you’re getting synchronizations – there’s probably some performance royalties, which is the icing on the cake (this is when your song gets played on the radio).
I mean, this is a totally legit model on the independent side – just getting some “decent” streams but great synch action.
In summary for this example, including some performance revenue thrown on top – you could, on the high end, be earning $70,000 in a year (don’t forget this is for writing 40% of the song and you need to factor in the deduction of your music publisher).
So the good news here is this world and songwriting reality, is also pretty great and definitely doable! And that’s just for one!
Keep in mind, we’re also in a great time period for synchs and synch placements. How is that?
Well, as you can tell by the wear and tear on your couch (you sexy couch potato), there’s just a huge explosion of networks and productions and original content in creation across Netflix, Amazon, Hulu, the major networks, Cable, etc. So if you have that great synch song that music supervisors love – it’s a beautiful thing. Lots of shows, films, docuseries, etc = lots of opportunity!
Synch Bangers FTW!
In summary, in the world of synchronization income – you don’t have to have a radio hit, you don’t even have to have a tons of streams – but if you can write a great synchronization song (think something that Apple would use in one of their advertisements), and are able to accomplish this a few times a year (or more) – you could totally without a doubt make a living as a songwriter.
So, how to become a paid songwriter?
Don Rickles voice: “Re-read the post, dummy! That’s how!”
And to be honest, in reality, the writers and artists, I work with – they’re not exclusively working just in one of these worlds. They’re playing in all of them!
For example, I have many professional writers and artists who might have a radio hit on the charts and getting played on the radio, but the same writers are also getting co-writes with independent artists that have OK to decent streaming income, but maybe great synch action! The same writers are also co-writing with artists who might have a single streamed 50 Million times, but never shows up in the Billboard charts.
Bottom Line? It all adds up!
Where is that Violent Femmes song, “Add It Up” when you need it? Oh, here it is. https://www.youtube.com/watch?v=QHapDS2fcFE
The question, how much do songwriters make? … The answer today is really about adding up all the opportunities and royalties. There are now literally tens of millions, hundreds of millions and in some cases billions of different micro streams and individual royalty lines (or little crumbs) coming together to make a whole loaf of bread (or pie, choose your level of carbs). Of course you have streaming – but there is synch revenue, there’s still mechanical royalties (remember, those are royalties on physical products but even with streaming, you are getting a mechanical streaming royalty), performance royalties, print, karaoke royalties to even new social platforms coming on line and using your music in a massive way (looking at you TikTok and Twitch).
Keep in mind that the publishers and songwriters used to be in a “penny” business. But it’s now, literally, a “micropenny” business where you need to collect your .00281827128 cents for that new streaming service for one stream in Romania (not making this up).
Bottom line is that it all adds up!
And if you can create high quality copyrights with (preferably) high level of quantity – you’re definitely, in my opinion, going to have all those little “crumbs” adding up – allowing you to have that nice proverbial songwriting “loaf of bread.”
And that’s a nice baguette you can eat in your nice gourmet kitchen, with 2 cars in the garage and maybe a summer house to boot!
And by the way, I do have a course to show you how to do all of this! What’s that you say? Yes, it’s called the Insider Secrets to Hit Songwriting – tons of insights and insider secrets to make and craft the biggest and best songs possible. https://benjamingroff.teachable.com/p/insider-secrets-to-hit-songwriting
If you found the above insightful – then just click through to that link, and you’ll have access to 25 years of all my best stuff to help give you the unfair advantage in making hit songs – and even those perennial synch bangers, those key songs that just get streamed, playlisted, covered, synched over and over – and that can potentially help unlock the key to the house we just talked about.
Hope this was all helpful! I’m now going to go and eat some of that delicious bread and get my carbs on (I deserved it – and so do you).
I’ll see (and hear) you on the charts, radio, playlists, streams and synch licenses.
Benjamin.
