Remy Lo has been a freelance writer since 2002. (UPDATE: A music-business source contacted us after this article appeared to clarify that these numbers were estimates based on one manager’s royalty statements. At that point, after Apple takes its cut, the entire 90 cents goes to the artist. Then iTunes took over the record business, and it was even easier (if not more profitable) – every time somebody bought a 99-cent track, a few pennies went into the artist’s bank account. Now, each label gets their piece of 60 percent based on frequency of plays. Because the formulae are so byzantine, and the royalty payments that show up on audit sheets are still so tiny, very few artist lawyers and managers truly understand how much they could make – one day – from Spotify, MOG, Rdio or the other relatively new streaming services. That comes out of the original $1.29 price – so the artist’s cut for sale of the master recording is about 20 cents. They are not an actual formula Spotify and music publishers use to calculate their songwriting royalty payments. Each state holds different work-for-hire rules, but in most cases, if a crew member isn't an independent contractor, they might be viewed as a part-time employee and will need  to keep a timecard, and provide W-4 and I-9 forms, along with a copy of a valid form of ID so you can withhold and pay taxes from their paychecks.As you can see, there's a decent amount of paperwork and thought that goes into the start of any production, however, you'll probably find that every moment spent covering loopholes and getting signatures in advance will not only keep you out of court, but will put your mind at ease as well. Smaller Internet radio companies pay slightly lower rates. Well, check out the multitude of ads, inside and outside the video box, throughout JK Wedding Dance. Making an effort to speak with artists represented by each music agent can provide further insight into realistic relationships. “Then they get a wad of money. Your songs stream on Spotify – or MOG, Rdio, Pandora or YouTube. The Videomaker Editors are dedicated to bringing you the information you need to produce and share better video. © Copyright 2020 Rolling Stone, LLC, a subsidiary of Penske Business Media, LLC. And the performing artist gets 38 cents (or splits that money, half and half, with a record label, per contract). Make a website displaying your best performance clips and lyrics.Perfecting your sound and solidifying your fan base will make you a must-have for music agents seeking to make steady profits. That's why we'll look at what to include in your music video contracts to keep you out of court.For many, the very word conjures up images of hard work and even harder language to read. David Hyman, CEO of MOG, won’t divulge his subscriber numbers, but he offers broad royalty estimates that apply to both Pandora-style radio and MOG-style subscriptions. Pay a music agent upfront fees for booking services shouldn't be a contract condition. All these things really add up. Spotify, MOG, Rdio and other subscription services are either free (with ads) or charge users monthly fees for unlimited streaming music. The songs included on your demo should be catchy and well performed from the first note, to the last. Let’s just make a pile from touring.” Says Grier: “The questions you’re having are not all that relevant to the band. Asking a trusted family member to serve as your music agent could save you time and frustration. However, contracts don't have to be burdensome. Apple, as the retailer, keeps 30 percent, or roughly 40 cents. These are signed documents that state that the production assumes the owner or agent has legal rights to the property and that the production has been given access to use the images taken at the property in accordance with the contract. And there are always these little extra fees when you try to go through channels – distribution fees, hidden costs. ‘How many records are we going to sell? I think it could be! These payments go to a music-business collection agency known as SoundExchange, which then pays 50 percent of it to the copyright owner (usually a record label like Warner or Sony), 45 percent to the artist and 5 percent to non-featured performers. Heather McDonald. We just want to play the songs.'”. “Is it big money? By - October 12, 2011. “I know individual artists who make tens of thousands of dollars a month on YouTube,” says Eric Garland, CEO of, which measures online metrics such as illegal file-sharing numbers and sells the data back to labels. 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What you'll typically find is a brief statement showing the amount of money you've agreed to pay the talent, which is usually sufficient for them to appear in your video and that they can't demand more after the project is done. “Let’s say MOG has 1 million subscribers and everyone’s paying $10 per month. Research talent agencies as well as independent contractors. The fractions of pennies artists make for each of these services are nearly impossible to track – at least for now. Speaking of wads of money, CDs were intensely profitable for artists and (especially) record labels for more than two decades, until the Internet, MP3s, piracy, Napster, iTunes, YouTube and Spotify kicked in over the past 10 years. booking your own shows in the beginning stages of your career could pave the way for increased status later. So if Warner [Music, a major label] was 30 percent of all plays in a given month, then Warner gets 30 percent of that 60 percent,” he says. I have no idea.”. The quick calculation, according to one band manager: If a song gets streamed 60 times, the songwriter receives 9.1 cents in mechanical royalty payments. Produce and distribute a professional demo and resume. A talent contract allows you to detail your expectations of the artist in terms of conduct and payment so the relationship runs smoothly. An uncompressed codec placed in a common video container like (dot) M-O-V and (dot) A-V-I usually work best. “People like to simplify this and say, ‘There’s no money in it,'” says Jeff Price, founder of TuneCore, which charges artists to place songs directly into iTunes, Spotify and others. Contracts are important for any production. Of course, both need to remove their own expenses from that. And it can be just as lucrative for goofy, homemade videos that use popular songs as it is for stars’ original videos.