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Streaming Music to Earn Royalties

Updated on March 30, 2015
Rock icons like The Beatles earned pennies on an LP sale. This cost $4-5 in 1967.
Rock icons like The Beatles earned pennies on an LP sale. This cost $4-5 in 1967.
The Beatles changed their royalty amounts in 1968 when they formed Apple Records.
The Beatles changed their royalty amounts in 1968 when they formed Apple Records.

Many musicians and bands think they have some of the best material since the Beatles. They create a song requiring hours and hours of time and money perfecting the song. Polishing it. Then, if they are undiscovered, their options are: create a CD, make a demo in a studio, or upload the tune to one of the many music websites so it can be discovered among the thousands of other unknowns. Kinda like panning for gold in 1849. But, even if the hope of becoming the "next" big thing in music sours with time, there is hope that maybe the song will be downloaded enough to make some money.

It would take a REALLY, REALLY, good song, to earn even $100 for an undiscovered artist. Now, for those already discovered and on the radio, well, it does make thousands for them, but that is NOT where the bulk of their revenue comes from. That comes from CD sales, radio play, concerts. But, for the unknown singer, who either does a cover of a famous song or creates the perfect song in their eyes, uploading it to a music website is the easiest to either get noticed or lost in the crowd.

These music websites, like Spotify, and others, pay just seven-tenths of one cent, each time a song is played. So, simplicity, let's say it is one cent. Just to make $1, would require a 100 plays! It would take hundreds of thousands of plays to even earn maybe $50. For those artists who are well-known and famous, they earn about 15 cents per play because they also have record company support. Compare this to a CD of an artist that is popular not an unknown, each CD sold for $15 would provide $1.50 to the artist. If the radio uses the CD songs in broadcast, if used twice, the artist receives about seven cents, if 15 times, once cent per song, per play. The retailer of the CD would get about $6.

Spotify is very popular where a user pays $10 a month for access to the world of music.The kicker is, unlike iTunes, the user never owns or downloads the single song they have bought for $2. They only has access to a song that they can then just listen to. You can listen to any song as often as you like, but, you will never own it or download it as a file into your device. Like iTunes, both companies keep about 30% of the revenue they generate. Spotify has paid out $2 billion to the artists that users played since 2008.

Streaming music is big business, last year made about $2 billion by artists and streaming website sites. The actual record companies selling CDs and from pay for a song download earned $7 billion. The artist always earns a lesser amount of the pie. The greatest exploited rock artists are icons-Elvis and The Beatles. Both earned pennies on a single or LP sale.

Unknown singer in SF


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