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Music Publishing Explained: Why 95% of songwriters don’t make money from publishing royalties



Every songwriter wants to get paid more than crumbs. I feel your pain. The problem is that certain parts of the industry must be changed. This is difficult for many creatives who may not have a backbone. However, every writer should be getting paid enough to make this creative pursuit worth their while.


Music Publishing is the Slowest Royalty

Music publishing revenue on average takes roughly 9 months to be received from streams and digital performances. On top of the delay, royalties are delivered based on the performance of the song during the quarter it was released. Therefore, if the song had a slow start, your royalties will have a slow start and vice versa.


Music Publishing is the Lowest Income Stream According to Music Sales

Based on Spotify earnings, music publishing payouts versus the master payouts are roughly 23.3% of the total streaming revenue. Of that 23.3%, 54.4% is mechanical-based and 45.6% is performance-based depending on your country. These revenues have to get split among all the other writers and composers on the record, plus managers and artists who want to take a piece for facilitating the deal and opportunity.


Music Publishing is the Lowest Income Stream Across the Music Industry

Against all other income streams, such as shows, merch sales, brand deals for artists, and record revenue, publishing is still currently a royalty-based revenue stream. Clearly, you can see why songwriters come and go so fast in the industry. In many cases, writers feel that the juice isn’t worth the squeeze.


Music Publishing Sync Royalties are Split According to Original Songwriter Splits

Even though synchronization has the potential to change lives, when it comes to the publishing portion of the sync royalties, it’s still split among all the other writers. This causes the individual writer to make less on a sync than others involved.


Why is Publishing Revenue Royalty-Based Only?

It’s situated this way because no music publisher is going to sell their IP (Copyrights) to the label for the composition, so they charge the labels and DSPs a royalty to use the songs called a mechanical royalty so they can get paid for the song when the record is sold or streamed.


How Should Songwriters Get Paid?

As individuals performing services, songwriters should get paid as a work-for-hire for their services just like a producer. Additionally, as publishers owning IP, they should get paid their standard royalty as well.


How Can Songwriters Get Paid More?

Songwriters should demand an upfront fee for their writing, as they are an essential part of the process and should not be included in the production agreement. Songwriters should also demand points on the records they create for the artists.


What’s the Easiest Way to Approach This Problem?

Either include the clauses in the producer agreement together or create a separate agreement to submit to the label. Though the latter is more difficult, it should be pushed for.


How Many Points Should Songwriters Get?

Songwriters should be allowed the same amount a producer gets; 3% for newbies and regular established writers, and 4% for high-demand writers.


But That Means Artists Will Get a Smaller Royalty, Right?

Yes, it does. This means the standard 80/20 deal should be rearranged to 68/32 at best and a minimum of 70/30.


Does the Producer Get Paid on the Sync Royalty from the Master?

Yes, as long as the label honors it.




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When Songwriters Demand More

  1. Songs in the industry begin to improve.

  2. The industry thrives where it was lacking.

  3. Artists can comfortably hire better writers to create better records for them.


When Songwriters Bow Out

  1. The record industry suffers.

  2. Listeners revert to catalog listening.

  3. The industry produces subpar recordings that people could care less about 9 months down the line.


Conclusion

If you are seeking to make more money as a songwriter, you now have more information to navigate these uncharted waters. By demanding fair compensation and understanding the industry dynamics, you can create a better environment for yourself and the future of the industry.

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