How Do Songwriters Make Money

Hi Alvah. All I know is what I've read, so someone more educated than me can probably offer some insights and corrections, but here are a few thoughts:

Songwriters and artists can make money in several ways:
- Advances from their record company
- Sales percentage from CD's and online music sales
- Usage royalties - for example if their song is used in a commercial or played at a ballgame they can make tons of money
- Selling song rights to other artists to perform the songs
- Touring, although only the very largest bands actually make a profit from their concerts. Tours are done primarily to promote sales of CD's and build up a fan base. Ticket and merchandise sales typically don't even cover the expense of doing a tour.

Illegal downloads have taken a big bite out of the music industry, but it's still a very profitable industry. Unfortunately it's a perpetually exploitive industry in general where managers and record companies can manipulate contracts and sales figures to keep the money out of the hands of the artists. We're seeing the very start of a revolution where artists do their own production and distribution over the internet. The music industry will be very different ten years from now - hopefully for the better.

Alvah said:

Thanks III. I wonder if this same process applies to books.
Do you think physical books will become obsolete in ten or twenty years,
and that authors will make money by publishing online and getting royalties for each download? I recall that Stephen King tried that a few years ago; I don't know how successful it was.

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Personally, I don't think it'll go the same for books. 1) It's just hard to stare at words on a screen for long periods of time, 2) Even when they do come out with an optimal hand-held viewing device for reading, I think people still like the "feel" of a book and paper in their hands, 3) I think people just love books themselves - collecting them, looking at them, marking them up. But who knows what it'll be like 50 or 100 years from now. Maybe we'll be able to just download entire libraries straight into our brains. Wouldn't surprise me even a little bit. And even then they STILL won't have a cure for baldness.

Just to elaborate on III's answer - presuming all CD sales have just died, there are still ways songwriters get paid for popular songs. "Performance rights organizations" such as ASCAP and BMI (and at least one newer one SESAC) keep track of songs played on radio, on jukeboxes at bars and pizza joints (presuming jukeboxes are still around), and played live by cover bands and such (and no doubt it's more a statistical thing than them keeping track of every play), and the songwriter gets some small royalty for each play (perhaps a different amount for each type).

Another point is iTunes and a few other sites that sell LEGAL downloads do pay royalties to the songwriters and such (actually they pay the recording labels, which still have the same problems with graft and corruption III was discussing, but at least they pay songwriters SOMETHING toward what they may be owed).

Well, Radiohead made their last album available for free download/listen, with a "pay what you think it's worth" policy. It's estimated that they made quite a bit even though every downloader didn't necessarily listen to the album let alone pay for it. It was still cash straight into the band's pockets without the middle-man.

Ice-T started selling his albums online years ago. He saw it as the future, and sold on his own site. He figured "why give the record company and management so much when I'm doing most of the work?". Hehe, Ice-T, he's so cool.

I digressed. Sorry.