Five Alternative Income Sources for the DIY Artist

It’s easy to forget that there are many types of royalties and income streams available for artists who prefer to work from home. It’s not all about touring.
February 26, 2019

There are many types of royalties and income streams available for artists who prefer to work from home. It’s not all about touring.

If you’re not at least exploring them, you may be leaving lots of money on the table.

So here are five ways you can profit from your music without leaving your home or recording studio.

Internet Performances

Sure, playing live generates ticket sales. But every time you play a live show, you are also earning money for all the original songs you play from the public performance royalty it generates.

The same can’t be said for live Internet performances. While in theory, a live Internet performance should generate public performance royalties. But in reality, the reporting structure to do so is far less established (and the potential earnings are far too small to matter).

But if you’re both a songwriter and performer, there are other ways to earn revenue from  live-streamed shows — using Facebook Live, Instagram Live, or by going live on YouTube — from the comfort of your home and get paid to do it.

There are online platforms that allow some sort of tip jar or will charge a fee to get access. Here are a few to check out:

  • Concert Window: you can set up a Tip Reward where each tip from a fan is rewarded with a gift from you (special downloads, VIP access, behind-the-scenes stuff, etc).
  • StageIt: fans can support you via a virtual tip jar and you have the option of giving away prizes to the top supporter.
  • IBM: yes, IBM has a live-streaming video platform thanks to Watson. Even though you have a massive amount of video storage and you can add a call-to-action on top of your video (like “Leave A Tip”), the downside is that you have to pay a monthly fee.

And if you’re ever curious to learn exactly how your PRO earnings have performed over the years, Royalty Exchange has created a free catalog analysis app called Know Your Worth that provides a personalized report for you. It analyses your PRO statements and then lists your top-earning songs, the formats providing the most revenue, your lifetime and last 12 months earnings, and more.

Synchronization Licenses

A digital synch license falls under the “distribution” and “reproduction” copyrights. The artist is paid per use of the song synchronized with a moving image, like a YouTube or Vimeo video.

For example, if you or another user uploads content to YouTube that includes your original song, YouTube must pay you a royalty for that use.

The amount you’re paid, however, depends on the percentage of net revenue generated from advertisers. YouTube, for example, makes money from putting ads on videos and pays you from those revenues as part of its licensing deals.

Other sync licenses can be when you get paid a lump sum of money for the use of your song in a TV commercial, TV show, a film, or a digital-only video game (this is under the “distribution” copyright only). The people paying you to use your song would be TV or film studios, ad agencies, video game companies, or a third-party music licensing company (if you got the sync deal through them).

The amount you’re paid is negotiated on a case-by-case basis and can be different depending on the client, the type of sync license, and whether or not you’re working with a music licensing company as a middle-man. But you can make anywhere between $20 to several thousand dollars for one sync license placement.

And it’s worth noting, every time a song used as a “sync” is aired, it also generates a performance royalty as well.

[Read our Guide to Sync Royalties for more details].

Mechanical Synchronization Licenses

A mechanical sync license royalty is like a digital synch license royalty except that it’s paid for physical (or “analog”) goods. So examples of this would be the use of your song in a video game (sold as physical copies), a toy, or a greeting card. This is protected by the “reproduction” copyright.

The songwriter is paid per unit sold. So you would get paid a royalty every time someone buys a video game that includes your song or for every toy that sings a song you wrote. (Regardless if it’s every used/played/etc.).

The company that manufactures the physical product (video game company, greeting card company, toy company, etc.) is the party that pays this royalty. It’s paid directly to you, through your publisher, or your representative, which would be a company like The Harry Fox Agency.

In the U.S., you’ll be paid $0.091 per reproduction of your song. And if the song is over five minutes long, the rate is determined by a formula that the governments sets. Outside of the U.S., the pay rate is usually 8-10% of the list price of the product.

Music Streams

When it comes to music streaming royalties, there are two sources: interactive streams (“reproduction” copyright) and non-interactive streams (“public performance” copyright).

Royalties from interactive streams (i.e. streaming mechanical royalties) would come from any streaming service that allows the listener to choose the song they want, skip a song, rewinding, or adding songs to their own playlists. Basically, any use that allows the listener to directly control the song.

As for non-interactive streams (i.e. digital public performance royalties), the compensation is similar. A non-interactive streaming service would be one that does not allow the listener to choose songs, create, playlists, or go backward. It’s sort of like old-fashioned radio but on the internet.

One of the best ways to earn these royalties is to get your original music included in a playlist.

Print Royalties

There are two types of print royalties, both generated by the “public display” copyright: digital and analog.

A digital print royalty is when your lyrics, sheet music, or chord charts are displayed on a website or app. The type of places that pay you these royalties would include online lyric website (like AllMusic or Genius) and digital magazines.

The U.S. government doesn’t have a set pay rate for this, so the royalty you’d get would usually be a term-based fee and/or a percentage of the gross income made by the site displaying your lyrics.

An analog print royalty is when your lyrics, sheet music, or chord charts are physically printed and displayed. They’re usually paid by a one-time fee or a per-unit fee, which is negotiated between the songwriter and the other party (although the payment for printing sheet music is usually 15% of the retail price).

So if your music is printed in a physical magazine, a book, or by a publishing company like Hal Leonard or Alfred Music, you’re owed a royalty. Also, if your lyric appears on a shirt, the party making the T-shirt pays the royalty.

Any of these royalty streams can generate regular and consistent income, which many artists have come to call “Mailbox Money.” You don’t need to be physically present to either earn or collect this revenue.

Even better, there are ways to collect years worth of these royalties upfront, sort of like an advance. If you already have a track record of collecting these types of royalties that spans three years or more, you could find an investor interested in buying a share of your royalties (sort of like company stock) in return for payment upfront.

And the best part is, these investors would only collect on the music you’ve already made. Royalties from any new music are all yours.

You can find these investors on Royalty Exchange, which has thousands of registered investors just waiting for the opportunity to give artists advances. In fact, they compete with each other to offer you the best deal, so you know you’re not getting ripped off.

It’s both free and easy to check to see if your royalties qualify, and you get a personalized catalog analysis in the process. Visit the site here.

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