Off the Charts: Examining Musicians’ Income from Sound Recordings

Posted on June 12th, 2012 by Kristin Thomson in What We're Learning. 5 Comments

Sound recording income by category

To this point, the data has lumped together all the possible sources for income from sound recordings  – physical sales, digital sales, digital performance royalties, and so on – into one bucket.

For those survey respondents who took either the medium or long path through the survey, we asked additional, detailed questions about each of the sound recording revenue possibilities included in that bucket. About 1,000 survey respondents answered the deeper questions regarding:*

1. Physical retail sales (brick and mortar, Amazon, mailorder)
2. Digital sales (iTunes, Amazon MP3, Bandcamp)
3. Sales of recorded music at shows/merch table
4. Interactive streaming services (Spotify, Rhapsody, Slacker)
5. Digital performance royalties (Pandora, Sirius XM, via SoundExchange)
6. Master use license for synchs, ringtones, etc.

* We also asked about record label advances, AARC royalties and a variety of AFM and AFTRA fund payments based on the sales or performances of sound recordings, but this data is not included in this report. You can learn about all the revenue streams we were examining here.

First, we asked survey respondents if they had some financial connection to sound recordings:

Q131: Recording Artist Role. Have you, your band or ensemble ever made recordings that you have released or sold to the public (CDs, vinyl, MP3s, singles or full length recordings)? These can be your own original music, or covers of music written by others. If you are a session musician or freelancer who has no contract rights to earnings from sales, select no.

Those who answered “yes” saw some additional questions about types of sound recording income:

About 74% said yes, at some point they had earned some money from physical retails sales, while 64% had earned some money from digital sales, and 79% reported receiving some money from sales of recorded music at shows.  This suggests decent participation rates in the sound recording marketplace.

We asked separate questions about synch licensing fees (both the composition and the sound recording side). For the sound recording side, only 17% said they had ever received income from a synch.

The marketplace for synchs has certainly broadened, due in large part to the massive growth of visual content – cable TV shows, movies, films, ads, websites – that needs a musical soundtrack of some sort.  But, it’s a marketplace that is largely controlled by music supervisors, publishers, record labels, and ad agencies, which might be one reason that so few survey respondents have seen income from this.

What about the new revenue streams for sound recordings? First, we asked survey respondents to report on whether they have ever received income from on-demand, interactive music subscription services like Rhapsody, or MOG, or Spotify. In each instance, the recording artist is paid a fraction of a penny for the stream.

We also asked the about income earned from digital performance royalties. These royalties are generated when sound recordings are played on a variety of non-interactive music services, such as Pandora (and all other webcast stations), Sirius XM, and Music Choice. These royalties are paid directly to the featured performer and to the sound recording copyright owner (usually a record label) via SoundExchange.

Not as many survey respondents have seen income from on-demand or non-interactive streaming than other sound recording categories, but there are a number of possible reasons.  First, and most obviously, these are relatively new revenue streams, and musicians’ understanding of and participation in these types of services is still evolving. Second, musicians may not be aware of subtle differences amongst the various music services, or how the money generated from these platforms flows back to them.  Third, artists must register with SoundExchange to collect their royalties. Even though it’s free, musicians need to take the necessary steps to claim their money, which is different than other sound recording revenue streams. We wrote more about the factors at play here.


Next: Trends in sound recording income by category

5 responses to “Off the Charts: Examining Musicians’ Income from Sound Recordings”

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