A Streaming Royalties Example

Janis Ian dropped an example of her mechanical royalties statement on FB, which gives you a great idea of what streaming pays out for your songs on their service.

Keep in mind, the music modernization act will increase rates on average 44% (which is a great start) – so we’ll go ahead and do that math too.

And, I’ll take a look at the math using some “hit song” numbers just to provide some context.

All of the below math assumes you own 100% of the publishing and 100% of the songwriting.  We’ll have some future posts that get into more complicated splits. But for now, we’re going to keep it simple.

 

Accounting summary of Janis Ian’s Facebook post:

Janis Ian is the only songwriter – so she owns 100% of the songwriter’s share, which is 50% of the song’s royalty payout.

She is also the only publisher – so she owns 100% of the publisher’s share, which represents the other 50% of the song’s royalty payout.

 

Streaming Company	Plays	Pub Payout	Pub Rate Per Play	Writer Payout	Writer Rate Per Play	Total Income
Amazon Prime	6,459	$1.22	$0.00019	$1.22	$0.00019	$2.44
Apple Family	4,334	$1.05	$0.00024	$1.05	$0.00024	$2.10
Pandora	19,006	$2.93	$0.00015	$2.93	$0.00015	$5.86
Pandora Plus	7,644	$0.91	$0.00012	$0.91	$0.00012	$1.82
Totals	37,443	$6.11	$0.00016	$6.11	$0.00016	$12.22

 

As a publisher and writer at 100% ownership of both sides, she was paid $0.00033 per play for her songs.

As a comparison, lets look at the olden days for sales and radio airplay when it was completely different and radio stations were media companies vs. “services” and sold ads to consumer product companies to generate revenue and paid for “content” or songs to attract listeners.

Assuming she signed a statutory license with her record company and receives only 75% of $0.091 ($0.06825) paid out for a sale/radio play.

 

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37,433 plays had the streaming companies being radio stations would have looked like this:

Streaming Company	Plays	Pub Payout	Pub Rate Per Play	Writer Payout	Writer Rate Per Play	Total Income
Amazon Prime	6,459	$219.61	$0.034	$219.61	$0.034	$439.22
Apple Family	4,334	$147.36	$0.034	$147.36	$0.034	$294.72
Pandora	19,006	$646.20	$0.034	$646.20	$0.034	$1,292.40
Pandora Plus	7,644	$259.90	$0.034	$259.90	$0.034	$519.80
Totals	37,443	$1,273.07	$0.034	$1,273.07	$0.034	$2,546.14

 

Streaming pays out at 0.48% of what a songwriter used to make!

That’s a 99.995% pay cut for delivering the same product to the same audience for the same business purpose by the buyer (radio stations – sorry – streaming services).

 

Made Up Example Using Marren Morris’s Record-Breaking “GIRL”

So let’s look at a multi-songwriter and publisher example using “GIRL” written by Maren Morris, Greg Kurstin, Sarah Aarons (genesis songwriter on “Middle”).

Assumptions:

• Spotify’s rate of $0.0004 payout per stream
• Week #1: 23,960,000 streams (Nielsen) – Note, these results are not typical!
• Songwriters: 3
• Publishers: 3 (each songwriter has one)
• For purposes of the example, let’s pretend Sarah Aarons is her own publisher (owns 100% of the 50% that goes to a publishers)

 

Payouts for each for the first week of streaming looks like this:

Who’s Getting Paid	Plays	Pub Payout	Pub Rate Per Play	Writer Payout	Writer Rate Per Play	Total Income
Sarah Aarons	23,960,000	$1,597	$0.0004	$1,597	$0.0004	$3,195
Marren Morris	23,960,000	$0	$0.0004	$1,597	$0.0004	$1,597
Greg Kurstin	23,960,000	$0	$0.0004	$1,597	$0.0004	$1,597
Morris Publisher	23,960,000	$1,597	$0.0004	$0	$0.0004	$1,597
Kurstin Publisher	23,960,000	$1,597	$0.0004	$0	$0.0004	$1,597
Totals	23,960,000	$4,792	$0.0004	$4,792	$0.0004	$9,584

 

How about some fun?

Let’s compare to another made up example using some industry math and assume everyone is getting paid as if the streams were radio air plays.

Who’s Getting Paid	Plays	Pub Payout	Pub Rate Per Play	Writer Payout	Writer Rate Per Play	Total Income
Sarah Aarons	23,960,000	$363,393	$0.0004	$363,393	$0.0004	$726,787
Marren Morris	23,960,000	$0	$0.0004	$363,393	$0.0004	$363,393
Greg Kurstin	23,960,000	$0	$0.0004	$363,393	$0.0004	$363,393
Morris Publisher	23,960,000	$363,393	$0.0004	$0	$0.0004	$363,393
Kurstin Publisher	23,960,000	$363,393	$0.0004	$0	$0.0004	$363,393
Totals	23,960,000	$4,792	$0.0004	$4,792	$0.0004	$2,180,360

 

Granted, 23 million is about double what the most-played songs in history total is (“Every Breath You Take” at 11 million).  So let’s look at one that’s a bit more realistic:

 

Johnny Cash’s “I Walk The Line”

Assumptions:

• Mechanical license payout of $0.091
• Songwriter signed a statutory license agreement (agrees to 75% – other to record company)
• 43 weeks of sales (almost 11 months) = 2,000,000 units
• Songwriters: 1
• Publishers: 1 (not the songwriter)
• Record Company w/statutory license rights: 1

 

Who’s Getting Paid	Plays	Pub Payout	Pub Rate Per Play	Writer Payout	Writer Rate Per Play	Total Income
Johnny Cash	2,000,000	$0	$0.091	$68,250	$0.068	$68,250
Cash Publisher	2,000,000	$91,000	$0.091	$0	$0.091	$91,000
Sun Records	2,000,000	$0	$0.091	$22,750	$0.022	$22,750
Totals	2,000,000	$91,000	$0.091	$4,792	$0.091	$182,000

 

2MM plays earned Johnny Cash $68,250 for “I Walk The Line.”

24MM plays earned Marren Morris $1,597 for “GIRL.”

37K plays earned Janis Ian $12.

 

More Reading:

Marren Morris’s Streaming Strategy with Record-Setting “GIRL”

How the Music Modernization Act will help artists get paid more for streaming