Music Royalty Calculator

Music Royalty Earnings Calculator

Estimate potential earnings from streaming royalties for artists, songwriters, and publishers.

Estimated Royalty Earnings:

Total Master Royalties Generated:

Total Composition Royalties Generated:

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Artist\'s Master Royalty Earnings:

Label\'s Master Royalty Earnings:

Songwriter\'s Composition Royalty Earnings:

Publisher\'s Composition Royalty Earnings:

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Total Combined Earnings (Artist + Songwriter + Publisher):

Understanding Music Royalties: A Deep Dive into Earnings

Music royalties are the payments made to rights holders for the use of their musical works. In today's digital age, understanding how these royalties are generated and distributed is crucial for artists, songwriters, and publishers alike. This calculator focuses primarily on streaming royalties, which have become a dominant source of income in the music industry.

The Two Pillars of Music Royalties: Master and Composition

When a song is streamed, two distinct copyrights are typically involved, each generating its own set of royalties:

1. The Master Recording (Sound Recording): This copyright belongs to the entity that owns the actual recording of the song, usually the record label or the independent artist. Royalties from the master recording are often referred to as "master royalties" or "sound recording royalties."
2. The Musical Composition: This copyright belongs to the songwriter(s) and their publisher(s). It covers the underlying music and lyrics, regardless of who performs or records it. Royalties from the composition are often called "composition royalties" or "publishing royalties."

How Streaming Royalties Are Calculated

Streaming services (like Spotify, Apple Music, Amazon Music, etc.) pay royalties based on a "per-stream rate." However, these rates are not fixed and vary significantly based on several factors:

• Streaming Service: Each service has its own payout structure and deals with labels/publishers.
• Subscription Tier: Premium (paid) subscribers generally generate higher per-stream rates than free (ad-supported) users.
• Territory: Rates can differ by country or region.
• Negotiations: Major labels and publishers often negotiate higher rates than independent artists or smaller entities.

The per-stream rates you input into the calculator are averages. For the Master Recording Per Stream Rate, typical values might range from $0.003 to $0.005. For the Composition Per Stream Rate, which is generally lower, rates might fall between $0.0005 and $0.0008.

Splitting the Pie: Artist, Label, Songwriter, and Publisher Shares

Once the total royalty pools for the master recording and the composition are generated, they are then split among the various rights holders:

• Artist's Share of Master Royalties: This is the percentage of the master recording royalty pool that the performing artist receives. If an artist is signed to a label, this percentage can be anywhere from 10% to 50% (or even higher for very established artists), with the remainder going to the record label to cover recording costs, marketing, and profit. Independent artists who own their masters would receive 100% of this pool (minus distributor fees).
• Songwriter's Share of Composition Royalties: This is the percentage of the composition royalty pool that goes directly to the songwriter(s). Traditionally, this is often 50% of the composition royalties, with the other 50% going to the publisher.
• Publisher's Share of Composition Royalties: This is the percentage of the composition royalty pool that goes to the music publisher. Publishers administer the composition copyright, license the song, and collect royalties on behalf of songwriters, taking a share for their services. If a songwriter self-publishes, they would effectively receive 100% of the composition royalties (both songwriter and publisher shares).

Using the Calculator: An Example

Let's consider an example to illustrate how the calculator works:

• Total Streams: 1,000,000
• Master Recording Per Stream Rate: $0.0035
• Composition Per Stream Rate: $0.0006
• Artist's Share of Master Royalties: 20%
• Songwriter's Share of Composition Royalties: 50%
• Publisher's Share of Composition Royalties: 50%

Based on these inputs, the calculator would perform the following calculations:

• Total Master Royalty Pool: 1,000,000 streams * $0.0035/stream = $3,500
• Total Composition Royalty Pool: 1,000,000 streams * $0.0006/stream = $600
• Artist's Master Royalty Earnings: $3,500 * 20% = $700
• Label's Master Royalty Earnings: $3,500 – $700 = $2,800
• Songwriter's Composition Royalty Earnings: $600 * 50% = $300
• Publisher's Composition Royalty Earnings: $600 * 50% = $300
• Total Combined Earnings (Artist + Songwriter + Publisher): $700 + $300 + $300 = $1,300

This example demonstrates how a single stream generates revenue that is then divided among multiple parties based on their respective rights and agreements.

Important Considerations

This calculator provides an estimation. Actual earnings can be influenced by many factors not included here, such as:

• Distributor Fees: Digital distributors (e.g., DistroKid, TuneCore) take a percentage or flat fee.
• Performance Rights Organizations (PROs): PROs (like ASCAP, BMI, SESAC) collect performance royalties for songwriters and publishers from public performances (radio, TV, venues, streaming) and distribute them.
• Mechanical Rights Organizations (MROs): MROs (like The MLC in the US) collect mechanical royalties for songwriters and publishers from reproductions (downloads, physical sales, interactive streams).
• Sync Licensing: Royalties from music used in film, TV, commercials, or video games.
• Other Royalty Types: Digital performance royalties (for non-interactive streams like Pandora), public performance royalties for master recordings (outside the US), etc.

Use this calculator as a helpful tool to understand the potential revenue streams and the complex ecosystem of music royalties, but always consult with legal and financial professionals for precise figures and contractual advice.