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.
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.
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!