When you write a song, do you ever wonder how much money you will make from it?
It is always nice to dream about the money you will make from your art, but is it really a profitable venture?
The truth is that streaming a song has many drawbacks, but it can also be pretty lucrative if executed correctly.
Here is a more detailed explanation of how much money you can expect to make from streaming a song.
The Problems With Streaming
The biggest problem with streaming is that it is all about volume.
A lot of people underestimate the value of volume in attracting potential listeners.
It is true that most people will not listen to your song if they do not like the sound of it, but they might also not like the song because it is not performed well enough for them to appreciate it.
The solution is to learn how to “play your songs,” which simply means that you have to record yourself performing the song. There are several online tools that can help you with this, and many record labels offer specialized training for would-be songwriters.
The Benefits of Streaming
Aside from the volume issue, streaming has several other advantages.
One advantage is that you can distribute your song to as many people as you want, as long as they have a microphone and a computer or phone connected to the internet.
This could mean that your song is played on radio stations all over the world, or that it is watched by thousands of people on YouTube.
Another advantage is that you can test out various styles and see how they perform, either live or in recording.
Depending on your situation, you may have limited access to instruments or no instruments at all.
With streaming, you can access a wide range of instruments and recorders, which could help you find the right sounds for your song.
Another important consideration when creating music is the expense of recording and mixing, which can be quite high.
If you want to record a radio version of your song for airplay, you will have to pay for the engineers and the studio time, as well as the costs of the instruments themselves.
The cost of mixing and mastering a song can vary, but it is usually more expensive than the cost of simply recording the song.
With streaming, you can record a rough version of your song and send it to a professional for mixing and mastering, all for a relatively low cost.
An Example
To give you an idea of how much money you can make from streaming, let’s look at an example.
We will use the popular song “Despacito” by Luis Fonsi and Daddy Yankee, because it is a good demonstration of the potential earnings of a successful streaming venture.
This song was recorded and released in January of 2018 and has already surpassed 500 million views on YouTube.
It was first available for download in February 2018 and entered the Billboard Top 100 in March 2018, spending a total of 12 weeks on the chart.
“Despacito” has been covered by numerous artists and was even featured in a commercial for Domino’s Pizza.
The song was a global success and was played at countless weddings and parties, earning the creators millions of dollars in royalties.
“Despacito” is currently the 48th most listened to song on the Billboard Top 100 Chart, with the most recent week’s worth of data showing it at #64.
How Much Does “Despacito” Make Per Stream?
Back to our example. Let’s say that you write and perform “Despacito,” which has the following features:
- Length: 3 minutes and 49 seconds
- Chart Position: #64 on the Billboard Top 100
- Recorded at: Red Room Studio in Nashville, Tennessee
- Price: Free
- Instruments Used: Guitar, bass, drums, and percussion
- Written by: Luis Fonsi, Daddy Yankee, and others
- Language: Spanish
- Producers: Luis Fonsi and Daddy Yankee
- Label: Universal Music Latino
- Catalog No.: UMCAT125
- Includes: Music video
How much money could you make if you uploaded “Despacito” to YouTube and allowed people to stream it?
“Despacito” currently has about 39.8 million views on YouTube, so with about 500 million views, you would need about 19.95 million streams to hit the 500 million mark.
Assuming no ads are played during the livestream and that everyone who streams your song listens for the entire three minutes and 49 seconds (this is very optimistic), then you can estimate that “Despacito” would have to generate roughly $22.50 per stream to hit the $500 million mark.
Let’s look at some other popular songs and their earnings potential from streaming.
Track Sales
When you sell a track, you usually have to pay a royalty to the record label, as well as cover the expenses of recording and mixing.
However, some musicians negotiate favorable royalty rates or work arrangements with record labels, which allows them to keep a larger portion of the earnings from each sale.
Royalty rates and work agreements vary by record label and are usually based on sales and plays, so they can be quite profitable.
The most beneficial negotiation that a songwriter can achieve is to have a license assigned to them for their song. A license is when you give a record label the rights to sell your song for a certain period of time.
For example, the SESAC music licensing division will assign you a Mechanical License (ML) for “Despacito.” This means that Universal Music Latino can sell and license your song “Despacito” for use in any medium, including radio and TV.
When you have an ML for your song, you do not have to pay a royalty on each copy of the song sold. Instead, the record label will pay you a small royalty on each time the song is played or downloaded. An ML for your song also makes performing the song much more convenient, as you do not have to seek permission from the record label or search for copyright holders to play the song live.
Royalties From Performance
When you play a song on the radio, you usually do not play the entire song, but instead break it down into its constituent parts, known as “drills.”
Each “drill” is a separate track and is played continuously throughout the duration of the song. The moment you begin playing a “drill,” you have to keep playing it until the end of the song. If a listener decides to bookmark your radio station, they can come back at any time to resume listening to your playlist.
If you play a “drill” on the radio for 15 seconds, you will earn about $50, provided that you have an ML for that particular “drill” and the song is played a few hundred times.
If the song is played fewer than 100 times, you will only earn about $25 per performance.
How Much Does a Labeled Artist Earn?
If you are an act that is labeled (has a trademark attached to your name) then you will earn a royalty every time your song is played or downloaded.
For example, Imagine Dragons, the Grammy-nominated alternative rock band, have a royalty rate of 19.9% on their songs. This means that for every 100 plays, they will earn about $19.90.
If you are signed to a large record label, you may also have the opportunity to negotiate a larger royalty rate. Your label might also throw in some free merchandise to sweeten the deal!
Record Sales
If you sell a record, you usually have to pay a royalty to the record company, as well as cover the costs of recording and mixing.