A copyright protects the song. Licensing is the fee to use someone’s copyrighted music. Famous songs cost $500 to $5000 or more.
Streaming royalties are fees to rights holders when a song plays on Spotify or Apple Music. Songwriters hold the copyright to their songs. Performance Royalty – A songwriter is paid when their song plays on radio or streaming.
Mechanical Royalties and Song Value Estimation
In the U.S., mechanical royalties are calculated per song at $.091. Royalties last the songwriter’s life plus 70 years. Total royalties can be up to $.09 per song sale and $.02 per stream. 50% goes to the composer, 50% to the publisher.
Agreeing on a royalty percentage is common for contracts. Estimating song value involves tracking past songs’ earnings to predict new songs’ earnings. There is always uncertainty – some songs become hits.
Royalty Distribution and Types
Actors get residual checks called royalties when shows are redistributed. An average hit song today earns $600-800,000 in royalties. Public performances generate royalties collected by ASCAP or BMI.
On Spotify, a song must play 30 seconds to count as a stream. All streams pay equally no matter the length. There are four royalty types: Mechanical, Performance, Synch, and Print Music. In the U.S., mechanical royalties are $.091 per song reproduction. Musicians mainly earn from touring and merchandise, not streams.