Ep. 01 – Performance Royalties & Music Publishing: How To Make Money From Music

hey how you guys doing welcome back to phase 6 it's your boy cirlove and so this is our first episode I really wanted to make sure that I gave you guys something you know that you can really take with you you don't know me yet we're building a relationship so it's really all about the information so I'm starting this whole show off with a series called making money you know making money in music but we're going to start off with bacon back breaking down some basic stuff which is publishing Publishing's licensing royalties a lot of people really get confused about this stuff and what they don't understand is it starts day one in the studio when you leave the booth that's when it starts a lot of people in this game don't understand that when you become a musician when you decide to step into the music business you are also deciding to be an entrepreneur in the exact same breath so I want to make sure you guys are prepared so I'm skip the introduction let's get to it I want to face you can learn the transform your life and your own impact we sir I'm telling you we want to feel stressful gotta mean it you gotta fill in the company's for Disney you got an office ooh the arts learning one honey I don't know every little little about a lot all right look now the first thing that you guys have to understand about getting paid your money the money that's rightfully due to you is that it all starts in the studio okay this whole music business works around songs okay you can argue that works around artists because artists have to make the song and producers instead of thurb at the end of the day the business itself is made off of selling music selling songs okay so when you leave the first thing that must be done is a split sheet okay and what a split sheet does for anyone that doesn't know it basically defines who did what in the record who if there were five producers on the record then it states who they were there was one writer it states who they are and it states what percentage that these people contribute to getting the song done so let's say those five producers and they all equally contributed then there's five people again ten percent right because the record is conceptually broken up into two halves fifty percent to the writer fifty percent to the producer so if there are multiple producers they're breaking up that 50 if it's multiple writers they're breaking up that 50 and that's how you kind of get a general understanding of who did what and you can kind of map out who owns what percentage of the record based off of what they did now this is very important because if for any reason there's ever an action called on the record where people are saying okay this person didn't get paid or this person contributed and they're not listed the split sheet cuts all that noise it says no we all signed everyone I was in the room is right here it's all signed this is who gets what now if that isn't done down the line that could be a person that was in the room working with you guys and said nah man I wrote two lines in the hook man I need at least 2% of the record and you might go back and forth the money gets held up in collections nobody gets paid until the hole splits our or decided on and it all makes sense you don't want lawyers you don't want the problems all right so get to split together okay the first thing is there's a songwriter involved all right now before we talked about there being you know five producers one songwriter and the producers are breaking up the songwriters are breaking it up now when I say songwriter I'm not just talking about those songwriters it's not omitting the producer back in the day before we had all the dope you know equipment that we have now you know you had to write your music out on a piece of paper with notes you know in scales and yet the right to bars and beats out that's how licensing started years and years ago and I saw it still is today so if you're a producer you are also considered a songwriter from a licensing standpoint when you actually get ready submit your records alright so there's two parts of the record that's a songwriter and there's the the publisher now the songwriter is the person that gets paid performance royalties which we're going to talk about in this video right the publisher gets paid mechanical royalties which we're going to talk about in the next video I don't want this video to be crazy long okay so performance royalties let me break down the concept of what they are and and give you an idea of where this whole thing came from if you understand where it came from to understand why you're getting paid and how okay so performance records comes from this concept right here you're an artist you made a song you sold your song somebody went out bought your song for $10 $5 whatever you sold it for your album or if you saw a single 129 59 cent with every song before they bought that one record right and now they're going to go on the radio and instead of making the tens of thousands or hundreds or 50 or having many people listening to their station pay for that record they're just going to give it to them for free and say here everyone listen to what this person did I had to pay for but you don't have to pay for it that's wrong and years ago those artists that stood up and fought for that right to say they know you can't take our music and play it and not pay us in addition to that radios our radio stations are also you know making money off our advertising so now they're making money off your music they gotta pay you right so in order for them to use your music what the radio stations have to do is they have to license your records so think about like a car in order for you to drive your car you have to have a license it's right someone needs a license in order to play your music in order to obtain that license they have to pay for it ASCAP BMI a/c sex job is to police and make sure that they're paying what they're supposed to pay how do they do this well many radio stations have to submit song lists and logs in to these agencies in order to you know meet their regulations and rules and things of that nature that's one way they track there's also BDS and media base and all these different outside providers that are going in and have different techniques for tracking what's being played in these organizations each of them have their own algorithm and system that they put together and based off of that algorithm they pay you accordingly now you say algorithm you're like sir what do you mean you know I'm saying maybe he wasn't doping algebra let me break it down okay so anytime your music is played whoever's playing it has to pay out a license that is not limited to the radio station it also includes club owners karaoke bars restaurant owners people that put on shows like ice-skating shows and circuses it also includes elevators and Airlines any time the music is played somebody has to pay on that license now every company calculates our society calculates this differently all right ASCAP for example has an interesting method that I've attached on the website that you guys can go and look at but one of the key factors is their licensing wait okay so they have a use wait a licensing wait they have a follow to the dollar factory um they also weigh by the time of day they also do additional credits in bonuses to different people for different things okay they add and multiply all these different things together and they come up with the amount of money that the record is worth as a total then they pay that out based off of the percentages that were written out in the split sheets okay so they figure out how much you're going to get paid total that's 100 percent and then they look at your split sheets and see how you guys have divided that up and they divide the money accordingly so I hope that helped you answer any questions that you may have on performance royalties and understanding how you get paid when your music is being played now like I said before this whole process from performance royalties and mechanical royalties what you're going to get into in the next video all of this starts with your split sheet so make sure if you don't have one you go to www.facebook.com go ahead and download Jordan and take the first step to handling your business as an entrepreneur like I said the beginning the day you decide to be a musician or the day decide to take music series it's the same day you decide to be an entrepreneur so this is the first step to getting on your business or the first of many steps that have to be taken again you about your business and learning how to make money so that is how money is made basically some radio noise if you're talking about my channel comes next on so stay tuned face its website comment tweet instagrams water other talk stuff I answer more in-depth questions on the website check it out let's do it basics thanks for watching thinks it's important amount you can learn the transform your impact with Serta this time toast on the careful we're going on so please watch the last one a lot of stuff we're going to talk to you all again real talk no trace real talk no trace

29 thoughts on “Ep. 01 – Performance Royalties & Music Publishing: How To Make Money From Music

  1. I wonder how performance royalties plays into streaming. Like when a barbershop plays Spotify all day. A lot of people are hearing it but it may only count as one stream?

  2. Hi ! amazing video, im a subscriber. I have a question that i cant seem to find the answer to anywhere, i greatly appreciate an answer, so the question is if i buy a beat with the publishing split 50% . And i then perform a song i made with the beat, does the beatmaker get paid ? Meaning in shows and concets …

  3. So can you as a record label buy all out rights from a producer that make a beat for you? How does that work. Thanks for your awesome videos and knowledge bro.

  4. Great information!

    Thank you for continuing to provide us all, regardless of what ones ranking/position within the industry may be – information that we all can learn and grow from. Greatly appreciated!

  5. do you mind making a video showing on the split sheet where the writer and the producer information is put? On the form there are other things on there that are a bit confusing. I'd really just like you to go over the split sheet showing who writes what where and why.

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