Category Archives: Music Licensing

How Do Musicians Really Earn Their Living? by Hisham Dahud

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The Future of Music Coalition has released data from its Artist Revenue Streamsresearch project, where financial case studies drawing from 4-12 years of accounting data provide information about how musicians are making a living today. These five case studies provide a financial profile of different types of full-time musicians. Each case study graphs and explains the musician-based sources of income over time, and the results tell a lot about the state of today’s music industry.

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The case studies reflect the working lives and income streams of five different types of full-time musicians:

  1. Jazz Bandleader-Composer
  2. Indie Rock Composer-Performer
  3. Jazz Sideman-Bandleader
  4. Professional Orchestra Player
  5. Contemporary Chamber Ensemble

The reports include annual revenue pies, a look at income versus expenses, and net profit over time. Some case studies also include more detailed breakdowns, such as PRO royalties by territory, or session work by bandleader. Using data compiled from individual artists’ tax returns, Quicken files and PRO royalty statements, the case studies offer a deep look into how real musicians and composers earn their living.

Key Findings

For musicians that perform (which the majority of those studied consisted of), live performance is the essential revenue stream. In nearly every instance, a performing musician’s annual income is highly dependent on the number of shows they played. Live performance is not only important because it is a creative choice (all of the subjects indicated that they enjoy playing music for live audiences), but because it is also a controllable source of income.

That income, however, comes with significant expenses attached, as touring expenses can often exceed touring income. Moreover, these expenses are not scalable, and as the more active a band becomes, the more money must be spent on travel, promotion, sidemen, etc… Other revenue streams that the case studies incorporate, such as teaching and session work, appear much more stable in the sense that they have fewer expenses attached.

Another finding was that label advances and grants do not indicate direct revenue. Two of the case study artists have received significant grants or advances related to recording projects. In both of those cases, all of the money was spent to make their records. Some of the records even cost more than the advances or grants provided, meaning that the artist needed to invest income earned through other means to complete the recording project.

More findings showed that performers leverage their performances to earn money in other ways. With live performances being the main platform for artists, all of the case study artists who make recordings sell their CDs to audiences after their shows. For the indie rock composer-sideman for instance, selling CDs on the road was nine percent of his income in 2010, and 22 percent in 2011.

One more significant finding was that some revenue streams are time delayed, but pay off year after year. Unlike live performance fees that are incurred typically right away, income earned by compositions pay off over time. For instance, the indie rock composer-sideman earned public performance royalties for songs he composed with MainBand #1 steadily, even four or five years after the recordings were released. The jazz sideman has continued to receive PRO royalties for a song he composed for a film in 2001. Compositions have a life of their own and once it’s published, it can be licensed or performed repeatedly all over the world, resulting in income over time.

Why Study Musician Revenue?

These studies are significant because they help paint a “real world” picture of what it is like to earn a living as a musician in an industry dramatically transformed from what it once was only a decade ago. While technological breakthroughs such as the emergence of the digital music store, the rise of social media, and music streaming services have certainly made it easier for musicians to distribute their music and connect with their fans, sources of revenue have seemed to funnel to only a select few key areas.

For aspiring musicians, it’s important that they get a firm financial understanding of what it really means to make a living in today’s music business, and to plan accordingly. The information can help tomorrow’s artists get a clearer idea of what they will have to do, the lifestyles they need to plan ahead for, and the sacrifices they need to endure in order to make ends meet through their music. For more seasoned musicians, these case studies can only affirm how the industry has changed in regards to primary revenue sources, and how they must continue to adapt in order to not be left behind.

How Do Musicians Really Earn Their Living?


“Digital sampling technology allows an artist to copy a portion of a recorded sound or series of sounds and incorporate the fragme nt into a new work.2 While only 8 of the top 100 albums contained sampling 10 years ago, almost a third of the current Billboard 100 albums use sampling as an artistic tool. 3 Whereas many rock and pop artists have used the technology to save the time and cost needed to hire a live band, hip- hop, dance and experimental artists have chosen the sampler as their primary instrument. For example, Tone Loc’s rap hit “Wild Thing” is based on the guitar riff from Van Halen’s “Jamie’s Crying,” and the Beastie Boys’ 1989 Paul’s Boutique is a rap album with beats composed of hundreds of samples including an Isley Brothers guitar solo, the reggae standard “Stop That Train,” The Beatles’ guitar solo from “The End”, Johnny Cash’s “Folsom Prison Blues,” and radio advertisements.4 As rap producer Daddy-O says, sampling “is something you put together out of bits and pieces other people have done. Once you have the complete product, you have a completely different picture.”5”

Lindenbaum, John. MUSIC SAMPLING AND COPYRIGHT LAW . Princeton Township, NJ: Princeton University – CACPS UNDERGRADUATE THESIS, 1999. Print.

You can download a PDF of the paper here.


Sampling Music & Law regarding sampling

You may have noticed that there are several song out in the world today that use parts or words from other songs, within their song.  This is particularly popular in rap songs and also as introductions into songs.  This is known as sampling.  It basically means that you are going to use a part of someone else’s song, within your song, and the original artist isn’t going to be singing it.  This can make for some very interesting music and normally sounds very original, but it can be dangerous.  Sampling without the proper permission is obviously illegal.  It is an instant copyright violation.  Also, since you didn’t write the lyrics, nor did you record it, you are violating two different copyrights.  This can get you in a mess of trouble, but there is a right way to do things.

Permission is going to be the biggest part of this process.  You will have to identify and contact the person or company who holds the copyrights for the piece of work that you are interested in sampling.  Normally this will be the publishing company and the recording company.  You must ensure that you have permission from both copyright holders, one is not good enough.  Once you’ve contacted the copyright holders, you will have to negotiate a fee for using the song.  The price for a sampling can be all over the board.  Ultimately it will depend on who you are sampling from (big name artists are more expensive than non-name bands), how long of a sample you will be using (a fraction of a second is minor, but anything more than five seconds will be major), and how it will be used in your song.  Structuring an entire song around someone else’s will be very costly, while only using brief sections will be cheaper.

Now you will have to decide how it is you are going to pay these people.  Your first option is a buy-out.  This is a simple, flat fee that you are going to pay upfront to use their music.  Again, these fees will vary depending on the artist.  Your other option is to offer a mechanical royalty fee.  This means that you will pay a portion of every sale of the song, back to the original artist.  These fees can range all over the place, and occasionally will have to in addition to some kind of a flat rate, ensuring the artist will get some money out of it.  Any variation of these two options is a possibility too.  Some artist may even off the sampling for free just to get their name and music out there a little bit.  This normally happens with a larger band wants to use a smaller bands music.

Firms are also available to assist you in the pursuit of obtaining these sample licenses.  Occasionally these firms will actually be cheaper than hiring an attorney and they will often times negotiate a fee for you.  This will help save you a little bit of time and give you the best chance of actually obtaining the license to use a sampling.  No matter how you get it, a sampling license in absolutely necessary when you are interested in using any portion of someone else’s copyrighted music.

If you choose to ignore the law and simply use a sample of someone else’s music you can find yourself in a pretty bad situation.  Some of the copyright laws are strict and the punishments for breaking them can be severe.  In most cases the judge will slap you with a massive fine.  These fees can reach into the hundreds of thousands of dollars and higher.  That alone could not only bury your band, but also you, depending on the business license you are operating under.  The artist could also demand payment for each album sold or, even worse force a recall.  This would mean that every album ever sold would have to be recalled (all that promotional money down the drain) and destroyed (all that publication work and money gone).  No matter which way you spin it, unauthorized use of someone else’s songs could be the end of your band.

Some people may have heard of a “fair use” rule that is in the music industry.  This rule says that as long as it is four notes or less, there is no penalty for copyright infringement.  That is not true at all.  No matter how many notes it is, if a jury decides that they are easily recognizable as part of the other song, you can be fined.  Even if it is something that was done unintentionally, you can still find yourself in a world of trouble.  The only songs that aren’t a part of this copyright law are the songs that have no one holding a copyright for.  This eliminates almost every song, but there are a few that are public domain.  But other than this small group of songs, you must always have a sampling license.

These problems can become even worse if you are under a record company.  The reason for this is, most record companies will have sections in their contract with you covering these types of situations.  It will basically say that you are making your own, unique music and that if the company is sued because of copyright infringement, then you are personally liable for any lose the company takes on.  This can be a huge fine, since the record company will have similar contracts with other music suppliers, radio stations, studios and producers.  That means they will have to reimburse all of those people for your mistake, and then you will have to reimburse the record company for all of it.  All in all, it’s less risky and ultimately easier and cheaper just to get the license.

Sampling Music & Law regarding sampling

Income Solutions for Independent and Major Label Artists

Owen Husney, a manager, talks about income streams for artists. He explains that while artists may not receive money from record labels, there are other methods to get paid. Touring and merchandising are major areas. Also, if the artist writes their own songs, they can make publishing monies. The performers can also make record royalties. Husney mentions licensing monies as well, which are from licensing songs for film and television. Also in this segment, Husney discusses the common monetary trap of artists. Many artists overlook the fact that they have to pay the record label back.

Music Industry Survival Manual: 13 Different Ways To Make Money From Your Songs

FREE .PDF Download of the TuneCore Music Industry Survival Manual. Everyone needs this vital information.

Click to download Volume 2.1 WAYS TO MAKE MONEY


Click to access 13ways-booklet.pdf

Advice For Artists & Maximising Revenue Streams

Music Legend Terry Lewis sits down with Amaru, for part 3 of Amaru Don TV’S “Industry stakeholders” series. In ths clip we discuss ways artists can improve their chances to succeed in the music business & the various revenue streams you can exploit as an artist.

When You Need Permission to Sample Others’ Music by: Rich Stim

Failure to get permission when you sample music could lead toserious consequences.If you use samples in your commercially released music, you should get legal permission. The process of getting permission from the owners of the sampled music is referred to as “sample clearance.” Failure to get the proper permission could lead to serious consequences: lawsuits or the inability to distribute your music to the public.

When Sample Clearance Is Required

In general, sample clearance is required only if you plan to make copies of your music and distribute the copies to the public.

Sample clearance is generally not required if:

  • You are just using the sampled music at home.
  • You are using the sample in live shows. This is because, usually, you are not making copies and the owner of the venue pays the blanket license fees to performing rights organizations such as Broadcast Music Incorporated (BMI) or American Society of Composers, Authors, and Publishers (ASCAP).
  • You plan to distribute copies to the public but meet one of the following: (1) an average listener would not notice the similarities between your end product and the sample, or (2) your use of the sample falls under the “fair use” doctrine. For more information on these, see “Defending a Lack of Sample Clearance,” below.

Operating Without Sample Clearance

Many artists releasing their own recordings can’t obtain clearances — either because they can’t get the music publisher to respond to their phone calls or because they can’t afford the fees.

What is the risk? Using a sample without clearance is always risky.  However, as a practical matter, if you only sell recordings at shows and don’t make more than one thousand copies, your risk is reduced. The owner of the source recording will be unlikely to learn of your samples. However, if your recording becomes popular at clubs or on the radio, or if a major label wants to pick it up, you’ll have to deal with sample clearance.

Reducing the risks. If you use an uncleared sample, you can lower your risks by:

  • making it unrecognizable
  • not using the sample as the groove or hook
  • burying it in the mix, and
  • not using the title of the source music in the title of your song.

Defending a Lack of Sample Clearance

If you decide to use samples without clearance, you might be in the clear in certain situations. Under the copyright law, you don’t have to obtain sample clearance if:

Your Sample Use is Not Infringing

If you alter a sample so that an average listener cannot hear any substantial similarities between your work and the sample, there’s no violation of the law.

Your Use is a Fair Use

What is fair use? Fair use is the right to copy a portion of a copyrighted work without permission because your use is for a limited purpose, such as for educational use in a classroom or to comment upon, criticize, or parody the work being sampled.

Factors in determining fair use. Generally, when reviewing fair use questions, courts look for three things:

  • You did not take a substantial amount of the original work.
  • You transformed the material in some way.
  • You did not cause significant financial harm to the copyright owner.

Don’t believe the widespread myth that “less than two seconds is fair use.” It’s not true. Also, some courts apply this fair use rule only to the musical composition copyright, not the sound recording copyright. For example, one judge ruled that any musical sampling violated the sound recording copyright.

You can use the above arguments in order to defend yourself against a lawsuit for sampling without permission. The problem: You won’t know for sure which way the judge will rule. And, most likely you’ll have to hire an attorney to represent you in court

When Possible, Seek Permission

You’ll be on safer legal ground if you seek permission, especially if you have a record contract that puts the burden of sample clearance on your shoulders. Such contracts usually contain an indemnity clause — which means that if you and the record company are sued, you must pay the record company’s legal costs. Ouch!

Note that when you sample music from a pop recording, you need two clearances:

  • one from the copyright owner of the song, who is usually a music publisher, and
  • one from the copyright owner of the master tapes, which is usually a record company.

To learn how to get the proper sample clearance, see How to Obtain Sample Clearance.

Publicity Releases

There’s an extra wrinkle if you use a sample for purposes of selling or endorsing a product (for example in a Volkswagen ad), and the sampled artist is identifiable. In cases like this, you also need to get the source artist’s consent. That’s because the ad creates the impression of an endorsement. Without the consent, the source artist could sue for what is known as the violation of the “right of publicity.” (The same would be true if you imitated the source artist’s voice without sampling it.) So when you use a sample for an advertising agency or other commercial client, be aware that a third type of clearance or “release” may be necessary.

Roadblocks for Small Labels

Nowadays, there are significant roadblocks for small independent labels who want to acquire sample clearance. For example:

  • Some owners of source music won’t deal with independent or unsigned artists. “A lot of times if it’s self-released, we say come back when you have a deal,” says a sampling rep at one major music publisher.
  • Often the copyright owners will want to hear a recording that shows how much of the source you intend to use and how you intend to use it. That means you have to do your recording first, without permission. If you then can’t get permission, a lot of hard work will have gone to waste.
  • Many small labels cannot afford the steep sample clearance rates. While there are no standard fees, the music publisher usually wants:
    • an up-front “advance” payment (which could be anywhere between $250 and $5,000), and
    • a percentage of the song income (usually between 15% and 50%).

    The owner of the master recording will want:

    • an up-front payment (usually at least $1,000), and
    • a “rollover.” A rollover is a payment that’s made when a certain number of copies have been sold.

    Sometimes, instead of a rollover, the owner of the master will ask for a portion of future record royalties (although sampling consultants advise against this practice).

Pre-Cleared Sample Discs

Sample CDs — recordings that contain sounds and riffs specifically sold to be used in samplers — can be a good alternative for small labels. Most sample discs are “pre-cleared,” which means that by buying the disc, you’re automatically granted permission for music usage without the payment of any further fees.

However, the permitted use of pre-cleared samples may vary from one disc to another. Don’t assume you can use the sample in whatever way you like. Review the documentation that comes with the CD for any license information. Most sample disc makers grant the user a “nonexclusive license” to use the samples –which means you, and everyone else, have permission to use the music. However, with a sample CD you don’t buy the right to redistribute the samples, only the right to use them in musical works.

If you find that your purchase of the disc doesn’t grant the rights you need, contact the soundware manufacturer to see if you’re eligible for a refund.

For more information, see Rich Stim’s  Music Law: How to Run Your Band’s Business  (Nolo), a comprehensive guide to all the legal issues your band may face.

by: , Attorney

When You Need Permission to Sample Others’ Music

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