Music Publishing 101: Melodies, Music, Money & Hip-Hop - The Many Revenue Streams
Published: October 11, 2008
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Ownership has it’s benefits when it comes to making money in the music industry, but turning melodies into money can be very challenging if not totally frustrating at times. Being “pro-active with your creative talent is probably your greatest asset. According to The Webster New Encyclopedic Dictionary, the word “pro” means “in favor of” and the word “active” means “Having the power or property of acting; exerting or having the power to exert an influence; performing actions quickly; quick; nimble; constantly engaged in action; busy; assiduous; accompanied or characterized by action, work, or by the performance of business.” In other words you’ve got to be serious about marketing your music. Retaining ownership of as large a percentage of your musical works as possible is one way to ensure that you will be the one receiving the maximum amount of earnings.
Reaching out to all of your royalty sources and getting a commitment from them can be time consuming. A recent publication published by ASCAP entitled Music and Money stated,“Since each source of income has its own distinct payment structure, figuring out exactly how a song-writer, artist or music publisher makes money and where that money comes from can be a major challenge. But it’s not that difficult! The money that can be made is yours if you know what you are doing, have the talent, have good representation, are willing to work, and have the requisite amount of luck necessary for success in any endeavor in life.” To illustrate the rewards of being a Songwriter/Publisher the ASCAP publication included and Income Chart that showed total royalty income (Domestic and Foreign) of $1,937,250 derived from the U.S. singles sales of 1 million copies, U.S. album sales of 3 million copies, U.S. radio and TV performances, foreign single and album sales, foreign radio and TV performances, sheet music and folios, advertising commercials, song in a television series, song in a motion picture, foreign theatrical performances, Broadway show use, lyric reprint in a novel, CD-ROM, Karaoke/video jukebox and miscellaneous royalties. Back in 1995 it was reported that music publishing generated $6.2 billion in sales, and many of those hit songs continue to produce substantial earnings.
As Rap/Hip-Hop and Urban Gospel music continues to grow in sales and popularity, more and more song/master placement opportunities are available to creators of this music culture. Earlier this year the RIAA released a “2000 Consumer Profile” and the most dramatic finding of this study was that Rap/Hip-Hop surpassed Country music as the #2 most popular music genre. Also stated was that between 1999 and 2000 U.S. music sales declined from $14.58 billion to $14.32 billion, but Rap/Hip-Hop sales increased by 2.1% during the same period. According to the RIAA, 1999 year end results: R&B/Urban/Rap/Hip-Hop make up 22% of total music sold. Hilary Rosen, President/CEO of RIAA said in a release accompanying the profile,“it’s encouraging to see a consumer profile as diverse as the vast array of works that were released in 2000.” And she said,” It comes as no surprise to see the gain that Rap/Hip-Hop has made when you consider that all of our major record labels produced many successful multi-platinum albums of the genre throughout the year.”
Here are some of the revenue streams to tap into as a record company (owner of master recordings): Master Lease royalties, wholesale/retail sales, record clubs, TV and Internet sales, Synchronization fees, etc. A self-contained Artist/Songwriter/Publisher adn Producer can tap into the following revenue streams: Royalties from record sales, mechanical royalties, product endorsements, live engagements, merchandising, fan clubs, musician fees, arranging and producing fees and song catalog administration to name a few. Finally, Todd and Jeffrey Brabec (Authors of the book Music, Money and Success: The insiders Guide to the Music Industry) put it best when asked about being successful as a songwriter/publisher in the music business, they wrote,“It’s a difficult field to succeed in and a difficult field to remain successful in. But even though the music business is based on creativity, it’s still a business, and knowledge of its inner workings is one of the keys to a lasting, productive, and financially rewarding career.”
Remember, knowledge is power, so know your business!
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