DIGITAL DOWNLOADS – Where does the money go?

18 Dec DIGITAL DOWNLOADS – Where does the money go?

Posted at 04:26h in Urban Business by Defiance 0 Comments

DIGITAL DOWNLOADS – WHERE DOES THE MONEY GO?

How much does an artist make once their song is legally paid for and downloaded? Once a song is digitally downloaded from an online digital music retailer such as Itunes, Rhapsopy, Tunecore, Amazon, etc.., there is a royalty that is due to the songwriters, producers, performers and the record label.

Below is a breakdown from start to finish on where all the money goes once someone purchases a song from someone like Itunes. Please keep in mind, every Artist’s situation can vary based on the agreement the artist signed with label that is distributing their music.

Here is how it works.

Download Retail Price $0.99
Itunes (they take their commission) -$0.29
Songwriter (Mechanical Royalty) -$0.09
Artist Royalty (15%) -$0.15
Producer Royalty -$0.03
Record Label -$0.41

So, this is what it looks like. It may not look seem like much money, but multiply these numbers by $1 million and the numbers will look a little more impressive!

UNDERSTANDING SONG ROYALTIES

(Mechanical Royalty, Producer Royalty and Artist Royalty)

MECHANICAL ROYALTY

A Mechanical Royalty is the royalty paid to a songwriter or songwriters whenever a copy of their song is sold. The current statutory royalty rate is 9.1 cents per song, If there are more than one writer, that money will be divided proportionately amongst all of the writers that contributed to that song. A Writer’s Split Sheet should be filled out and signed by each of the writers that contributed to that song. (See Writer Split Sheet at the end of the article.)

PRODUCER ROYALTY

The producer of the song will is due a Producer’s Royalty whenever a copy of the song that song is sold. A Producer Royalty is usually structured and spelled out in a contract that is known as the Producer’s Agreement. The average Producer Royalty Rate is around three percent (3%).

ARTIST ROYALTY RATE

The Artist Royalty Rate is outlined in the contract that the artist negotiates with their record label or company that is distributing the Artist’s music. This is the percentage that the artist is due for each unit sold and can from 12% up to 18% depending on the artist’s popularity.

SONGWRITER SPLIT SHEET

When two or more songwriters collaborate on a single song you will need to complete a Songwriter Split Sheet. In order to do this you will write down the appropriate percentages that each songwriter dedicated to that specific song. It is absolutely crucial to have each writer fill out and sign this Songwriter Split Sheet once the song is complete. By doing this, you will save yourself unwanted headache down the road when the song is a platinum hit on the radio. Trust Me!!

Here is what you will need:

WRITER SPLIT SHEET

The undersigned writers have jointly written and composed a musical composition that they have entitled (“SONG TITLE HERE”) performed by the (ARTIST NAME HERE). The undersigned represents each writer’s share and their respective Publishing representative.

Writer 1