Happy Ferocious

Are my royalties going to go up or down next quarter?

Songwriters and producers ask me this question all the time.

It’s an important question because if you don’t have a sense for what will happen with your royalty earnings… it’s hard to plan your life and career.

Let’s talk about your public performance royalties first.

As a quick reminder, your public performance royalties are paid by ASCAP, BMI or SESAC in the United States. Collectively, these organizations are called PRO’s, which is short for performing rights organizations.

Your PRO is going to start paying you royalties about 6 months after your song is released.. Unfortunately, it takes the PRO’s quite a while to receive the play data from radio stations, TV networks, and streaming services. The amount you receive in royalties depends on how popular the song is.

So 6 months after your song is released, you’re going to start getting paid those royalties.

Say you write a smash hit that’s playing on the radio all the time. You’re going to get some big royalties checks for that song in the first 2 quarters. Those checks will be huge.

Enjoy them -- it’s a huge validation of your art and all the hard work you’ve put in.

But don’t get used to those massive checks. After those first two quarters, the royalties are going to go down fast. I see it all the time. A producer has a massive hit and makes $125,000 in 2 quarters. Then he assumes that making six-figures is the new normal. 

It’s not the new normal. 

In fact, the radio royalties are going to end up falling 90-95% by year 2. I’ve seen songwriters go from making $50,000 from radio to making $5,000 in less than a year.

If you don’t plan accordingly, you can get yourself into some serious trouble. With a radio hit, your public performance royalties will soar to dizzying heights and then drop fast.

Now the royalties that you receive from your publisher or administrator will probably look a little smoother. The publisher pays you for public performance, mechanical royalties, and sync fees.

The blend of royalty types generally means that the decline won’t be as steep. 

But after the song leaves radio rotation, those royalties are going to decline too. And that’s natural, the royalties from every song that you write are going to decline over time because they’re consumed less. 

Now if your song is a big hit on streaming but isn’t getting any radio play, the same pattern applies.

A placement on Rap Caviar is like getting a ton of major radio play. While you’re on the playlist, the checks will be big and afterwards the royalties will decline.

But the decline won’t be quite as steep... if Spotify users love your song and add it to their personal playlists to listen to again.

So if you’re wondering if your royalties are going to go up or go down next quarter… they’re probably going to go down… unless you haven’t been paid on a hit song yet.

The royalties from your songs are going to decline for 5 to 7 years after release. After that, they’ll probably level off and stay consistent.

So plan for that decline and go write another hit!