How I Earn Money in the Music Business: A Comprehensive Guide

Hello everyone, my name is Cara, and I’m an artist, songwriter, and music producer. Welcome to my home studio! Today, I’m going to answer one of the most frequently asked questions I receive: how do I earn money in the music business?

As someone who has been in the industry for over a decade, I’ve learned a thing or two about the business side of music. Back in the day, when I was living in Los Angeles as a full-time songwriter, I used to create these little posts called “Advice by Cara.” In them, I would document my experiences as a songwriter in LA, helping people navigate how to negotiate splits, work with DJs, and do business with other songwriters and producers.

Now, I’m updating that advice for the modern music industry. Let’s dive in!

My Music Catalog: The Foundation of My Income

I’ve been in the music business for over 10 years, and in that time, I’ve written a lot of songs. While I’m not writing as actively as I used to, I still have a massive music catalog that generates income for me through various revenue streams.

Fees vs. Advances: What’s the Difference?

When I was working with some of the biggest DJs in the world, I would often get either a fee or an advance for my work. Here’s what that means:

Fee: A flat rate paid for your work. For example, if you’re paid $1,000 for a vocal feature, that’s your fee, and you keep it. You may also negotiate splits on the publishing and master recording, which would generate additional income.
Advance: A payment made upfront, but this money has to be “recouped” before you see any royalties. For example, if you’re given a $1,000 advance, you won’t start earning royalties until that $1,000 is earned back through sales, streams, or other revenue.

Key Takeaway: Always make sure your contracts clearly state whether you’re receiving a fee or an advance.

Royalties: The Lifeblood of the Music Industry

Royalties are a crucial part of how I earn money from my music catalog. There are two main types of royalties: publishing royalties and master royalties.

Publishing Royalties

Publishing royalties are paid for the composition of a song—its lyrics and melody. These royalties are split between all the co-writers and producers who contributed to the song. For example, if you write a song with three other people, you’ll split the publishing royalties four ways.

Type of Royalty	Description
Mechanical Royalties	Paid for the physical or digital reproduction of your song (e.g., CD sales, downloads).
Performance Royalties	Paid for public performances of your song (e.g., radio, live concerts, streaming).

Master Royalties

Master royalties are paid for the recording of a song. These are typically owned by the record label that releases the song. However, as an artist, you can negotiate to retain a percentage of the master royalties.

For example, if you’re featured on a song released by a major label, you might retain 20-30% of the master royalties, while the label keeps the rest. These royalties are usually paid out twice a year.

Neighboring Rights: The Mystery Royalty

Let’s talk about something I don’t fully understand but still collect money from: neighboring rights royalties.

Neighboring rights are a type of royalty paid to performers and record labels for the public performance of their recordings. These are separate from publishing and master royalties. For example, if your song is played on the radio or in a public place, you might earn neighboring rights royalties.

I’m not entirely sure how it all works, but I signed up with a company that collects these royalties for me. It’s another revenue stream that adds up over time!

Common Mistakes to Avoid

I’ve made my fair share of mistakes over the years. Here are a few things to watch out for:

Buyouts: Be careful with buyouts, where you sell all your rights for a flat fee. While the upfront money might be tempting, you’re giving up all future royalties from that song.
Not Registering Your Music: Always register your music with the appropriate organizations (e.g., ASCAP, BMI, or SESAC in the U.S.). These organizations collect performance royalties on your behalf.
Not Reading Contracts: Always read and understand your contracts. If you don’t, you might end up with a bad deal.

How to Succeed in the Music Business

If you’re serious about making money in the music business, here are a few tips:

Build a Team: Work with a good manager, lawyer, and accountant. They’ll help you navigate the business side of things and ensure you’re making the most money possible.
Diversify Your Income: Don’t rely on just one revenue stream. Explore merchandise, live performances, and even sync licenses for TV and film.
Stay Persistent: Success in the music business takes time. Keep grinding, and eventually, you’ll see results.

Final Thoughts

Making music is a passion, but if you want to make a living from it, you need to understand the business side. By leveraging your music catalog, negotiating fair deals, and exploring all available revenue streams, you can turn your passion into a profitable career.

If you have any questions or want to share your own experiences, leave a comment below. And if you found this helpful, don’t forget to share it with your fellow musicians!

Until next time,

Cara

Frequently Asked Questions

Hi, I’m Cara, an artist, songwriter, and music producer. Welcome to my home studio! Today, I’m excited to answer one of my most frequently asked questions: how I earn money in the music business.

Revenue Streams as an Artist and Music Content Creator

As an artist and music content creator, I have multiple revenue streams that contribute to my income. Let me walk you through each one:

Music Catalog

I’ve been in the music business for over 10 years, and I’ve written many songs in that time span. I collect royalties on my music catalog in several ways:

Fees and Advances: When I work with DJs or other artists, I may receive a fee or advance for my vocals. A fee is a flat rate, while an advance is a payment that needs to be recouped before I can collect royalties.
Royalties: There are two types of royalties: publishing royalties and master royalties.
- Publishing Royalties: These are paid out for the composition of the song, and are split between me and my co-writers and producers.
- Master Royalties: These are typically owned by the record label and are paid out to the artists featured on the song. Master royalties are paid out by the record label, usually twice a year.

Note: If you’re an artist on a song, it’s essential to retain part of the master and publishing rights to collect royalties in the future. Buyouts may seem appealing, but they mean sacrificing future royalties.

Performance Royalties

My performance royalties are paid out through my Performing Rights Organization (PRO), BMI. BMI pays out quarterly, and I receive statements showing where my songs were played and how much money I earned.

Neighboring Rights Royalties

I’m also signed up with a company that collects my neighboring rights royalties. While I’m not an expert on the details, it’s another revenue stream that I collect.

That’s a wrap! I hope this FAQ helps you understand how I earn money in the music business. If you have any more questions, feel free to ask!