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via knowthemusicbiz.com

Assuming an independent musician has no record label, is the sole songwriter and owns their copyright and has digital distribution for a flat annual fee - How would they earn royalties from the sources below? Who collects and pays the royalties for each?

- Non interactive radio (Pandora)

Answer: There’s some question whether Pandora is “interactive” but for now, a court has held it is not. Assuming that’s correct, there is a compulsory license under the copyright law for the masters, and the monies are collected by a nonprofit company called Soundexchange.

ASCAP / BMI (performing rights societies) collect for the songwriting.

The artist (who is also the record company and publisher in this example) affiliates with each of these companies for payment.

- Streaming services (Spotify)

Answer: Interactive streaming requires a license for the master from the company; there is no compulsory license, so they can charge whatever they can get. There are “aggregators” (like Tunecore and Orchard) who put together small companies and re-license the digital rights to masters. That would make sense for an owner/user like this example, because it’s hard to get streaming services to make one-off deals.

Songwriting is collected by ASCAP / BMI.

- Digital downloads (iTunes)

Answer: Master rights are also licensed directly, or through aggregators, as above.

Publishing rights are done directly, or through Harry Fox.

- Subscription download service (eMusic)

Answer: I assume you mean a streaming subscription with a number of downloads included? If so, they need all the licenses above.

- Video streaming (YouTube)

Answer: The record company makes a deal with the site. Songwriting isn’t totally settled. Mostly, the record company gets paid by the site directly, then pays the songwriter / publisher.

Very nice set of templates and examples to keep track of the in and out of money in your music business…or lack off lol

via stunted by reality

Without these things you will not have a clear picture of how you will make money and the rest of your music business plan will be a waste of time.

Start Up Cost – Grab a pencil and a piece of paper. Divide it in half by drawing a line down the middle of the page. Label the first column, “Items”. Go on to write down everything that is necessary to get your business off of the ground. Examples can be, studio and band equipment, manufacturing costs associated with the products or service you intended to sell, initial marketing, promotion and distribution costs. Keep in mind that these may be recurring charges, but at this point, you should only calculate the amount you need before you release your first product or service offering. In the second column, write down the “Estimated Costs” associated with each “Item”. At the end, total up the second column and there you have your estimated start up costs.

[Sample] [Editable Worksheet]

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