How Much Would A Musician Make In Royalties (Open Ended, I Know)

Factual Questions
1

See title. I was just wondering how successful a band that (let’s say for this hypothetical) is no longer making albums or touring or whatever would have to have been back in the day to basically (1) not have to work at all (but maybe live a Spartan lifestyle); and/or (2) remain “wealthy” from the royalty stream due to the publishing rights.

Yes, much is going to depend how they split songwriting credits (the drummer may be at Mickey D.'s if he didn’t get credit or otherwise have a royalty-sharing agreement). But what would it take? One huge hit (the premise for that Nick Hornby novel)? Half a dozen that went platinum and still get some radio play? More? Clearly much also depends on how their popularity aged, if they were “re-discovered” through being used in some popular soundtrack or otherwise enjoyed some nostalgia-induced rebound, etc.

Has it gotten easier to live off of your royalties since iTunes, ringtones, and Guitar Hero opened up new streams (or is all that cancelled out by illegal downloads)?

I could look up individual examples, but just wondering if there’s some rough categorical rule: “You’d have to be Boston successful” or the like. I started this out trying to imagine if a number of guys from the '90s (Soul Asylum, Gin Blossoms minus the dead guy, Soundgarden) were (1) living in Monte Carlo; (2) living pleasantly in Orange County; © flipping burgers or working as recording engineers.

Oh, and stipulate that while they didn’t necessarily blow everything they ever had a la Mike Tyson, they haven’t enjoyed some extraordinary investment success.

2

I think there are just too many variables to be able to come up with a rule of thumb. Not only do you have the songwriter-or-not angle, but recording contracts can vary wildly. And, the fact is that a lot of musicians who hit it big DO blow a large amount of it, sometimes through stupidity but sometimes through bad advice, bad investments, etc. On the other hand, I have a friend who is a songwriter – one of his songs was a big major hit and he’s had a healthy group of album cuts by major artists and a few other singles. He made enough during that run and was conservative and smart enough with investments that he lives a nice middle-class existence and doesn’t have to work. He plays small gigs himself just for the fun of it and pocket change. He drives a Jag and travels a lot, but doesn’t live the high life and never really did.

3

Well songwriters get 8¢ per song if it’s 5 minutes or under. They get a different rate for songs over that, it’s per minute. So some songs have a radio (edit) version so you could get paid two rates on the same song. One for the album and one for the single and even another rate for an extended play. That money is split usually 50/50 between lyric writer and music writer but it can be split anyway the people who wrote the song agree on.

Many times artists such as Elvis were put on as songwriters even when they wrote nothing.

The music company pays this to the publisher who takes a share and pays the songwriters etc. So a songwriter isn’t going to get all 8¢, in fact usually when the songwriter is the recording artist he get less than a songwriter who just writes.

The singers get anywhere up to 25% of the royalties. It sounds good but it depends on how the 25% is calculated or rather what it’s calcuated on. Also remember it’s not static. Usually an artist’s first CD is not going to make them much, it’s the sophmore CD where they can re-negotiate and rake in the bucks. That’s why artists and studios often “rush” the second album

Things that effect the “up to” 25% includes wrapping costs (these can be I’m not sure but I think it’s like 20% or 30% which is dumb, 'cause ain’t gonna cost that much.

Remember they only get royalties on PAID items. So all the records sent to DJs for night clubs and radio stations don’t count. All the used CDs and like don’t count. And returns are taken from the whole. In the music industry, used to, I’m not sure if they still do guarantee 100% return. So the retailer can return all the unsold, unwrapped CDs (and such) for 100% credit.

So if I have “The Mark Song” that makes me $1,000 and 50% of them get returned, on my next song “The Mark Song Pt II” makes $5,000.00 I get $500 dedcuted from “The Mark Song Pt II” 'cause the first single had a return rate of 50%

Now also remember artists also have “front” money to return. When you get signed by a record company YOU as an artist pay for everything. Then the record company gets paid back. Now some artists will negotiate and instead of paying back real costs, will choose to give a percentage of their future royalties for the next so many albumsn

The next thing I see on my contract list is Internet royalties. These are a huge problem as the law let’s them deduct the packaging fees (as if they were a CD) yet there is none, obviously. The rate is less for Internet downloads and other things that are called “new technology.” And artists lose money for songs that are DRM (this assumes the song that is DRM protected is lless likely to be downloaded illegally. Which is dumb because a CD rip isn’t protected by Digital Rights Management and can easily be traded for free.

You also have performance royalties. Organizations like BMI (Broadcast Music Inc. ) ASCAP (American Society for Composers, Authors and Publishers), SESAC (Society of European Stage Authors & Composers) and there is another one I forget. BMI and ASCAP are the 800 pound gorillas. The other two are small but effective. SESAC is actually based in Nashville and caters to a lot of country artists. SESAC is profit driven while ASCAP and BMI are not-profit.

Anyway these organizations have complex formulas for recording how many times a song is played in Bars, Hotels, nightclubs, on the radio, TV shows and such. This is probably how I get my share of royalites, 'cause they’re blanket and even if you have a song that doesn’t get played much, it’ll balance it out.

If have a bar you get a BMI license and it covers the songs in the BMI playlist and BMI and ASCAP and such all have reciprical agreements

I’m not sure, if those organizations also do Internet broadcast, they probably do, or it may that the 4th one, I can’t think of covers that.

As a songwriter who’s never had a hit, I can pull in a few bucks a YEAR which is nothing obviously. Last year I pulled in a whopping $1.50 LOL

But others do well. Steven Kipner who wrote the lyrics for Olivia Newton-John’s Physical (which was a monster hit) said in an interview I read, he made $3,000,000 off that song alone. But that’s like $120,000+ a year over the last (near) 30 years.

Most artists make their real killings off touring. They can get corporations to underwrite the cost and the rest is profit. David Cassidy in his book said he was making $50,000 a weekend (Fri, Sat and Sun) for touring when he was in the Partridge Family. And that was the early 70s, so you can imagine it only got better through the years.

4

I had a neighbor a while back who wrote the music and lyrics for a popular song in the early 1960s that still gets air play. I don’t remember if the payments are quarterly or annually but her royalty checks run right around $300. She has a job.

5

I recall when Harry Chapin died (he was hit by a truck) they called Kenny Rogers to testify at the resulting lawsuit to give the jury an idea how much a successful songwriter could make. I don’t recall exact figures, but I was left with the impression that Kenny is a very wealthy person, and, although he makes a lot touring, the larger part came from royalties.

6

Only the artists who can fill arenas. Most bands and musicians barely break even on tours. If you’re playing small venues, you’re not going to get a big payment, and no one is going to sponsor you. You tour to promote the record.

7

Soundexchange is the royalty collective for noninteractive Internet performance.

8

There are anecdotal stories that Norman Greenbaum lives very comfortably from his “Spirit In The Sky” royalties.