HOW the MONEY FLOWS BACK to Songwriters, Artists, Publishers

HOW THE MONEY songwriters, artists, FLOWS BACK TO publishers & labels

How are musicians and songwriters compensated when their music is played on the radio, sold on digital platforms, webcast, or streamed on interactive services?

Chart Legend

MC Revenue generated by the musical composition, SR Revenue generated by the sound recording, which which flows back to publishers and songwriters. flows back to record labels and recording artists.

For radio and radio-like services, blanket licenses determine who gets paid, and how much.

songwriter MC PROs ASCAP, BMI, SESAC publisher performance of composition broadcast radio terrestrial broadcast of any AM or FM station In the US, terrestrial broadcasters do not pay performers or sound recording copyright owners

performance of sound recording

songwriter MC PROs ASCAP, BMI, SESAC publisher webcast performance of composition or digital performance Pandora • Sirius XM • NPR streaming 50% record label any webcast stations SR SoundExchange 45% performer(s)

5% AFM & SAG-AFTRA Fund background singers digital performance of sound recording and musicians

For digital stores and on-demand streams, how the money flows depends on what entity negotiated the license.

For record labels that have a direct deal with services:

digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition SR record label * Rate of payment from label to artist/band sale of sound recording 10-50% artist/band* depends on terms of contract, and whether digital sale is classified as a sale or a license.

0.5% Sound Recording musicians Special Payments Fund # # Labels contribute a small percent of sound recording sales income. If recording was made under the AFM’s recording agreement, payments are disbursed to musicians who were paid big labels scale wages during the recording session.

songwriter MC ASCAP, BMI, SESAC PROs publisher on-demand performance of composition 10.5% publishers songwriter stream minus payment Spotify • Rdio • Beats • Rhapsody to PROs streaming mechanical royalty

SR record label 10-50% * Rate of payment from label to licensed use of sound recording artist/band* artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

For record labels that are represented by a digital aggregator/distributor:

digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition aggregator 85% record label SR Orchard/INgrooves

@50% * Rate of payment from label to sale of sound recording artist/band* artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

indie labels songwriter MC PROs ASCAP, BMI, SESAC on-demand performance of composition publisher mechanical licensing 10.5% publisher* songwriter * Services pay streaming mechanical agent or publisher* stream minus payment royalties to big publishers directly, Spotify • Rdio • Beats • Rhapsody to PROs streaming mechanical royalty or to a mechanical licensing agent like Harry Fox, Songtrust or Music Reports, which then pay their publisher aggregator 85% record label members/clients. Songwriters need to SR Orchard/INgrooves be proactive in seeking out this revenue. licensed use of sound recording 50%+ artist/band

For artists who own their sound recording copyrights and use services like CD Baby or TuneCore:

digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter

91- only relevant if performer recorded + released songs written by others aggregator 100% artist/band SR CD Baby/TuneCore sale of sound recording

self-released songwriter MC PROs ASCAP, BMI, SESAC publisher on-demand performance of composition mechanical licensing 10.5% publisher* songwriter * Services pay streaming mechanical royalties to big publishers directly, minus payment agent or publisher* stream or to a mechanical licensing agent to PROs streaming mechanical royalty Spotify • Rdio • Beats • Rhapsody like Harry Fox, Songtrust or Music Reports, which then pay their publisher members/clients. Because it is very 91- burdensome for self-published songwriters SR aggregator 100% artist/band CD Baby/TuneCore to collect these royalties, both CD Baby licensed use of sound recording and TuneCore have set up services to help self-published songwriter clients to collect them.

Artist Revenue Streams money.futureofmusic.org

Information compiled by the nonprofit Future of Music Coalition, with gracious assistance from many experts and friends, and support from Berklee Online. www.futureofmusic.org | money.futureofmusic.org | online.berklee.edu © Future of Music Coalition 2013–2015