Revenue streams for composers and songwriters
In 2012, the Future of Music Coalition released the results of a research project they conducted where musicians in the US were surveyed and asked how they earned money.
The FMC released a new report, and here's the list with their findings. An asterisk (*) Indicates a new inclusion to this list from five years ago. Check out the brand-related revenue section that includes merch and more.
Revenue streams for composers and songwriters
1. Publisher advance. Payments to a songwriter/composer as part of a publishing deal.
2. Mechanical royalties. Royalties generated through the licensed reproduction of physical or digital recordings of your songs.
3. Commissions. A request from an orchestra, ensemble, or other entity to create an original work.
4. Public performance royalties. Collected by Performance Rights Organizations (PRO), this is revenue generated when your songs are played on radio, TV, in clubs and restaurants. Paid to songwriters, composers, and publishers by ASCAP, BMI, SESAC, etc.
*5. Streaming mechanical royalties. When your songs are streamed on on-demand services, these are the royalties paid by the mechanical licensing agent to a publisher, who then pays songwriter/composer.
6. Composing original works for broadcast. A request to compose an original piece of music (jingle, soundtrack, score) for a film, TV show, or ad agency.
7. Synch licenses. Royalty paid to songwriters/composers (via publisher or record label, or direct) when an existing work is used in a movie, TV show, video games, or commercial.
8. Sheet Music Sales. Revenue paid to songwriter/composer by a publisher (or directly from purchasers) generated by the sale of songs/compositions as sheet music.
*9. Online lyric display. Revenue generated by the licensed display of song lyrics. Online sites pay publishers, which pay the songwriter/composer.
10. Ringtones revenue. Generated from licensing your songs/compositions for use as ringtones. Paid to songwriter/composer via your publisher.
11. Songwriter awards programs. Awarded by ASCAP and BMI to songwriters of any genre whose performances are in venues outside of broadcast media.
12. Publisher settlement. Payment from publishers to writers for litigation settlements.
Revenue for recording artists and performers
13. Orchestra or ensemble member salary. Income earned as a salaried member of an orchestra or ensemble.
14. Show/performance fee. Revenue earned playing in a live setting for non-salaried players.
15. Record label advance. Paid to artist as part of signing a record deal.
16. Record label support. Money from label for recording or tour support.
17. Retail sales. Revenue generated from selling physical music in retail or online outlets. Paid to artist/performer by your label or aggregator, e.g. CD Baby.
18. Digital sales. Revenue generated from selling music digitally online. Paid to artist/performer by your label or digital aggregator, e.g. CD Baby.
19. Sales at live performances. Revenue generated from selling recordings of music at live performances. Paid to artist/performer directly by fans.
20. Interactive service payments. Revenue generated when your music is streamed on on-demand streaming services. Paid to artist/performer by a record label or digital aggregator.
21. Digital performance royalties. Revenue generated when your sound recordings are played on internet or satellite radio. Paid to performers by SoundExchange.
*22. Master use synch license. This is the license fee paid to a record label and/or recording artist via a direct licensing deal with the licensee (movie studio, ad agency) when an existing sound recording is used in a movie, TV show, video game, or commercial.
23. AARC royalties. Collected for digital recording of your songs, foreign private copying levies, and foreign record rental royalties, distributed to US artists by the Alliance of Artists and Recording Companies (AARC).
24. Neighboring rights royalties. Collected for the foreign performance of your recordings.
25. Film musicians Secondary Markets Fund. Paid to performers on recordings used in TV and other secondary uses by the Film Musicians Secondary Markets Fund.
26. Sound Recording Special Payments Fund. Paid to performers for the sales of recorded music made under the AFM collective bargaining agreement.
27. SAG-AFTRA contingent scale. Payments paid to performers when a recording hits certain sales plateaus.
28. Label settlements. Payments from labels to recording artists for litigation settlements.
Session musician revenue
29. Session musician/sideman fees for studio work. Revenue earned for playing in a studio. Paid by label, producer, or main artist.
30. Session musician/sideman fees for llve work. Revenue earned for playing in a live setting. Paid by label, producer, or main artist.
31. Non-featured artist payments. Payments for recording and performance royalties to non-featured artists distributed by the AFM/AFTRA Intellectual Property Rights Distribution Fund.
Teaching and producing
32. Music teacher. Revenue generated from teaching a musical craft.
33. Producer. Revenue generated producing another artists’ work in the studio or in a live setting.
34. Honoraria or speakers fees. Payment for conducting a lecture, workshop or master class.
35. Merchandise. Revenue generated from selling branded merchandise (t-shirts, hoodies, etc) paid to artist by fans.
36. Fan club and patronage. Money directly from fans who are subscribing to your fan club or patron channel.
37. YouTube Partner Program. Shared advertising revenue paid to partners by YouTube.
38. Ad revenue. Miscellaneous income from your website properties (click-throughs, commissions on Amazon sales, etc.).
39. Persona licensing. Payments from a brand licensing your name or likeness (video games, comic books, etc.).
40. Product endorsements. Payments from a brand for you endorsing or using their product.
41. Acting. In television, movies, commercials.
Corporate, foundation, and fan funding
42. Fan funding. Money acquired directly from fans in support of an upcoming project or tour.
43. Sponsorship. Corporate support for a tour, or for your band/ensemble.
44. Grants. Money from foundations or state and federal agencies.
45. Arts administrator. Money paid to you specifically for managing the administrative aspects of a group you are a member of.
The information from this post was originally published on the Future of Music’s micro-site related to their “Artist Revenue Streams” research project. The Future of Music Coalition is a national nonprofit organization that works to ensure a diverse musical culture where artists flourish, are compensated fairly for their work, and where fans can find the music they want.