How do artists get paid in today’s music business?

The glamorous world of music is entangled with numerous other dynamics on the inside when it comes to the singers, music producers, songwriters earning the money that they rightfully deserve. If you talk about music contracts and royalties which are the money being transferred to the rightful owner of a music piece as and when their music composition is being used, sold, embedded on a digital platform or distributed across any channel, these are ways in which the money matters are done in the music industry:

Songwriting and recording

While a song means nothing more than a good piece of music that a listener connects with, when it comes to the parties involved in the business, the copyrights of any song are split into two entities – composition of the song as well as the recording of the audio.

While the singer and the record label that he or she is associated withholds the sound recording copyrights, the composition copyrights are owned by the lyricist and music composer. When listeners play a song, both royalties for the composition and song recording copyrights are generated and thus, each party benefits.

Online buying of music

Now, how do artists get paid when the general public decides to buy their song? Every time a song is purchased from an online music store, the money earned from the sale is distributed to the composition and song recording copyright holders. The distribution rate, although, might differ depending on the negotiators involved in between.

This can be simplified to the involvement of agents or third parties for the selling of a license to big labels. These agents offer their services for a certain amount and enable the artists to get their work noticed. Whether a piece of music or a song is played in a restaurant or used in a video embedded on a website, the same copyrights ownership comes into play when it comes to the money that is paid for the usage.

Live Performances

Music festivals, undoubtedly, lure loyal fans in large numbers. While streaming online music might contribute to a small chunk of their earning, the high pricing of tickets for any music line up is an excellent medium for musicians to offer lifetime experiences to their fanbase by performing live and get paid.


While an artist might like a brand and would happily endorse it, often becoming the face of a brand or product to promote it fetches them extra revenue. Another way to earn money for artists is the advertisements that are attached to their video and pop up at the beginning or towards the end of it.

Selling merchandise

An interesting revenue-generating strategy popular nowadays among artists is to target their audience and sell merchandise under their name ranging from a clothing line to perfume and more. Artists also communicate with their audience base directly on platforms such as Twitter or Instagram to raise funds for a cause such as recording of their next music album.

Although the music industry appears to be extremely lucrative for earning money, any average artist gets to take only one-tenth of the total revenue generated under his or her name, as per the conclusions of recent research studies. This is a result of the presence of various brokers and agents in the industry.

The good thing is that the landscape of the music industry is evolving as it is coming to terms with online streaming services as the major revenue generator. In the coming years, analysts also believe that online streaming as the lead platform for engaging the audience is going to further streamline the process and thus, more beneficial for the artists involved. However, it is yet to be seen when the streamlining of the process will take place.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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