How Much Money Do Songwriters Make (and How Do They Get Paid)?

The ins and outs of the music business are notoriously complex, with many details hidden behind closed doors, and rates subject to wide variation. In part this is understandable – both artists, streaming services and labels, strive to keep their individual contracts opaque, in part to secure for themselves the most favourable deals possible. The music business is also a sector which has, over time, changed more than few others, over the last couple decades in particular. But in all of this, just how much do songwriters actually make and what’s the process here?

To begin with, to gain full insight into the songwriting world, we need to explore a distinct branch of music history: publishing. Music publishing, in its earliest days, referred to the sale of sheet music – material written by composers transcribed onto parchment so that anyone with the proper knowledge and the right instrument could reproduce it. While people have been making money off music seemingly as long as there have been people making music and a civilization providing a mass audience, the more modern incarnation is centred around the 15^th Century, when Roman printer Ulrich Han’s first released a volume of plainchant (Christian religious music). That said, the father of modern music publishing is generally considered to be the Venetian Ottaviano Petrucco, who operated a hundred years or so later, and held a 20-year monopoly on music printing in Venice. Later came mechanical printing and, crucially, copyright laws, the first of which were introduced during the reign of King Henry VIII (1491-1547). A whole heap of further refinements and evolutions continued in several countries, but the important thing to note is that, eventually, copyright law sought to ensure that composers received their fair share of revenue from the sale of their music, instead of rampant unauthorised reproduction which was sort of the norm.

Reaching the dawn of the modern songwriting industry, pre-World-War II the biggest players made their home in New York’s Tin Pan Alley, in actuality a collection of buildings in Manhattan’s Flower District, which housed the offices of numerous publishers. Here, composers and lyricists such as Irving Berlin, Ira Gershwin, Richard Rodgers and Oscar Hammerstein plied their trade, churning out a seemingly endless stream of hits, including “Alexander’s Ragtime Band” and “By the Light of the Silvery Moon.” Even up to this point, sheet music remained a song writer’s primary source of income. Some of these received a percentage of sales, and others served on a fixed salary under contract to a publishing house. Tin Pan Alley was also home to a small army of “song pluggers” – pianists and singers who represented the publishers by demonstrating songs to the potential customers.

An interesting example from the period can be found in the person of Henry Clay Work (1832 – 1884), who composed 75 songs during his career, setting a record for sheet music sales with his composition, “Marching Through Georgia,” which topped a basically unprecedented one-million-plus copies sold. However, it’s Work’s later composition, “My Grandfather’s Clock,” which is probably better known and it is this song that gave us the name for that style clock. The story goes that, in 1875, Work visited England, and happened to notice a broken clock in the lobby of the George Hotel, in North Yorkshire. According to the proprietor, the clock had stopped at the exact second at which its previous owner had died. While this probably isn’t true, the tale inspired Work to compose his now-famous tune. The song went on to break the sales record previously held by Work’s own aforementioned “Marching Through Georgia.”

In any event, post-World War II, Manhattan’s Brill Building took over as the premier hub of music publishing as throughout the 1950s and early 1960s, a boom in commercial radio together with the mass production of the record player led to a shift in emphasis away from sheet music. Similar to Tin Pan Alley, the Brill Building was actually a collection of offices belonging to many different companies. Here you could find Jerry Leiber and Mike Stoller, Burt Bacharach, Neil Diamond and Carole King, all of whom made a living writing songs for popular artists. Of course, as in the case of Diamond and King, a few of these writers went on to become successful performers in their own right – a factor which, as we shall see later, drastically increases the revenue which might be expected from a hit.

The average income for a songwriter from that period is not recorded, but we do know that successful composers could make an extremely good living at the top. To quote Otis Blackwell, who wrote “All Shook Up,’” “Don’t Be Cruel,” “Great Balls of Fire,” “Fever’,” and countless other hits: “I wrote my songs, I got my money and I boogied.” Beyond him, Mike Stoller, as one half of the partnership behind “Hound Dog,” “Yakety Yak” and many others, has an estimated net worth, in 2022, of around $200 million. At the time in these early days, however, corruption throughout the industry was rife. Artists often insisted on taking a cut of songwriting credits, and it became commonplace for unscrupulous record companies to buy up a writer’s entire catalogue for pennies on the dollar to what they made off the songs.

Returning to Otis Blackwell, we can dive into some telling figures. Before we do that, it’s worth recounting the remarkable story of how the songwriter stumbled across his big break. According to Blackwell, he was waiting hopefully in the snow outside the Brill Building on Christmas eve, 1955, hat-less and with holes in his shoes, when arranger Leroy Kirkland happened to pass by. Blackwell persuaded Kirkland to listen to a song or two of his right there in the street. The arranger was impressed enough to invite Blackwell inside to meet Al Stanton, an employee of Shalimar Music.

From here, Stanton purchased six of Blackwell’s compositions there and then, at a price of $25 against royalties. He then signed Blackwell to a contract and gave him space in the office to work. Two weeks later, news came that RCA were interested in licensing one of those $25 songs for an up-and-coming new artist called Elvis Presley. That song, “Don’t Be Cruel,” became a massive hit, spending nine weeks at the top of the Billboard pop chart. Within the year, Blackwell had earned over $80,000 in royalties from Presley’s hit (a shade under $900,000 in today’s money).

On this note of someone else writing the songs, once again, until the 1950s and early 1960s, the majority of recording artists – Frank Sinatra, Elvis Presley, Nat King Cole, etc – did not write their own songs, and were not expected to. Rather, they relied on songs provided by music publishers, mostly composed and written by an in-house team. But, once again, how much were those songwriters getting paid, and how? This is where it starts to become a little complicated.

In those early days, most artists received a flat fee for a recording session, and most songwriters were paid a flat fee per song. Gradually, however, the concept of royalties began to advance, especially with the advent of recorded music. The radio boom of the 1930s and 40s changed the landscape once again and, in response, The American Society of Composers, Authors and Publishers (ASCAP) was founded, in 1941, to license stations, clubs and other venues in use of their copyrighted works. ASCAP collected these payments and passed them on to the various copyright holders: the record label, the artist, and the music publishing company, the latter of which in turn was expected to pay the songwriter.

This brings us up to the modern era, where a music publisher serves as an agency to track, collect and pay songwriters all the royalties which they are owed from their compositions. In return, the publisher keeps a portion of said royalties. That split varies, but a typical deal will see the publisher retaining between 25% and 50%, with the rest going to the songwriter (or songwriters). For every music track, the song publisher (on behalf of the songwriter) will, on average, own a 50% stake, which means it will collect 50% of all revenue, deduct the agreed amount for itself, and pass on the rest to the composer. Income from all this primarily comes from three sources:

Mechanical royalties: physical sales of CDs and vinyl, plus digital streams and downloads.

Sync licensing royalties: generated every time a song is broadcast through radio, television, films and video games.

Performing royalties: live performances, including concerts, radio or other public venues.

For example, if a song is streamed once on Spotify, the music publisher will receive 50% of Spotify’s payment, with the other half going to the record label and artist. Between 50% and 75% of that ever diminishing amount, in turn, will be passed on to the songwriter. Let’s take a hypothetical case: songwriter Fred Jones has one of his compositions “Standard Love Song” recorded by Kanye East. Suppose that recording is played ten times on the streaming service, Blockify. Blockify pays out 10 cents per stream (which as we’ll get into is a ludicrously large amount compared to reality, but makes our math easier), so that makes $1 in total. 50 cents go to the music publisher, which has a 30-70 split with Fred Jones. Fred therefore receives 35 cents.

There are, of course, many different music publishers, and some songwriters may well have different songs placed with different publishers, with various splits. Before we continue, it’s time to take a deep breath and consider the issue of copyright. There are two types of copyright in the music business: The ‘composition’ and the ‘master.’ The composition refers to the song’s structure, notes, melody, lyrics and beat. The master refers to a specific recording of that song. Let’s return to Fed Jones and “Standard Love Song.” Kanye East owns the copyright for his recorded version. Nobody can use it without his permission. Jones, however, owns the copyright for the song itself. He receives royalties every time East’s version generates income, but if another artist were to cover the song, Jones would also receive royalties on the new version, whereas Kanye East will not.

Which brings us to singer-songwriters. There have always been artists who both write and record their own music, although before the 1960s, as mentioned, they were in a minority. Some of these early pioneers enjoyed plenty of success with their own compositions- Chuck Berry, to cite one major example. Others, such as the aforementioned Otis Blackwell, scored modest hits of his own, but derived far more income from other artist’s recordings of his songs. Throughout the 1950s in particular, cover versions were commonplace, even if the original had already been a hit. And sometimes precisely because it was already a hit. In the 1960s, thanks to musicians such as Bob Dylan, the commercial appeal of singer-songwriters, who mainly sang their own original material, boomed. A little later came bands such as The Beach Boys and, of course, The Beatles, who also wrote and recorded their own music.

Obviously, if you are the recording artist and the songwriter, then your income stream widens considerably. For example, if Fred Jones recorded his own version of “Standard Love Song,” then he would receive both the artists’ share and the songwriter’s royalties. He would still have to employ a publishing company to track and collect the latter, although it’s not unusual for very successful musicians to set up their own publishing company for this very purpose. Incidentally, it’s worth pointing out that the artist’s share is, perhaps surprisingly, far smaller than the writer’s. They do, however, get the benefit of being vastly more famous compared to the song writer, and can leverage this into other sources of income. In any event, of the money from sales which goes to the label, the artist might expect to receive just 15%. There are always exceptions – mega-stars of course hold the power to negotiate far better terms, and some canny operators such as Bjork negotiate individual terms on a case-by-case basis in different countries.

Returning, for a moment, to the complex issue of copyright – technically, copyright laws cover all public performances of a song. Legally, then, a busker performing “Standing Love Song” on a street corner would owe Fred Jones a fee. In practice, this never happens. There are also, of course, songs which can be defined as ‘public domain,’ meaning that there are no restrictions or copyright on their use. Not many compositions fall into this category and there is always a caveat, a good example being a number which we all know: “Happy Birthday to You.”

It’s generally accepted that the song was originally composed by sisters Mildred and Patty Hill, in 1893. For many years, Warner/Chappell claimed copyright, citing a 1988 deal in which they had bought out the previous rights-holder Birch Tree Group Limited. Birch Tree had originally called themselves the Summy Company, and had been the first to officially publish “Happy Birthday” as we know it today. Warner/Chappell pressed its claim aggressively, and figures reveal that, in 2008 alone, the company was raking in around $5,000 per day from “Happy Birthday.” In 2013, however, documentary maker Jennifer Nelson, who had previously paid a fee for the use of the song in one of her films, filed a suit against Warner/Chappell, citing new research which cast doubt as to the validity of their claims.

Evidence centred on a 1927 edition of The Everyday Songbook, in which “Happy Birthday” first appeared. Previously obscured lines of text revealed the caption “Special permission through courtesy of The Clayton F Summy Companty,” and not, as had been assumed, a copyright notice. Lawyers argued that the song had therefore been published without a valid copyright claim, which was required to have been present under the law of the time. The judge agreed, “Happy Birthday” entered the public domain, and Warner/Chappell were forced to pay back a substantial sum of around $14 million in licensing fees.

Unfortunately, there is no such thing as one universal copyright law. Different countries have different rules and restrictions. In most cases, it can be taken that a particular song comes under the regulations of the county of which the composer is a citizen. Currently, a song enters the public domain, in UK law, “70 years after the author’s death,” while a recording is considered copyright-free “70 years from when it was first released.” In the US, it is more complicated. Generally, a work is protected for a period equal to “the life of the author plus an additional 70 years.” There are, of course, exceptions. The minutia of these laws would require another rather lengthy article in itself. Other famous songs it might surprise you to learn are in the public domain (in the US) include “Take Me Out to the Ball Game” (copyright elapsed due to time passed since publication), “House of the Rising Sun” (an old folk song, the origins of which are unknown) and “Give My Regards to Broadway” (again due to time passed).

With all that prelim out of the way in understanding the industry, let’s finally get down to more detailed facts and figures, at least such as is publicly known and looking at sort of the general case as well. While a lot of information remains secret, including radio royalties, streaming royalties and individual contracts, we can draw some useful conclusions from available data. According to the Bureau of Labor Statistics, the average songwriter’s annual salary comes to just under $52,000. But that’s just an average, and will be top-weighted by those few who score big hits. The figure for the UK, if you’re wondering, stands at £33,954.

Getting back to those big hits and some specific examples, up to 2012, Dan Wilson, co-writer of Adele’s “Someone Like You,” had earned himself $882,700 in royalties for that track alone. That’s off the back of 3.9 million individual sales of the song, and 5.8 million album sales, as well as all the ancillary things like streaming and all of that which is all a bit more nebulous. Moving on from there, Dr Luke, Max Martin, and Bonnie McKee, co-writers of Katy Perry’s “California Girls,” had, up to 2012, received a split of $646,100 for that song.

Speaking of Max Martin, while you may never have heard of him, the Swedish songwriter and record producer is the man behind an incredible number of contemporary hits, including Britney Spears’ “Baby One More Time,” Katy Perry’s “I Kissed a Girl,” and Ariana Grande’s “Problem.” As you might imagine from all this, he’s about as high in the industry as one can get as a song writer with a net worth that stands at an estimated $260 million.

Martin’s highly successful methods highlight another problem facing songwriters today. In 2022, it’s rare for a big hit to be the product of a single person. Song-writing teams are the norm, with areas of composition ever-more compartmentalised. This means multiple lyricists, beat-makers and specialists sharing the pie. The shift towards streaming poses another challenge. Services such as Spotify and Apple Music pay artists according to market share, ie: how their material’s popularity stacks up against the most popular songs over a given period. This, of course, tilts the system massively in favour of already-establish acts with large marketing funds. There has also been much well-publicised criticism of the amount which these services pay, particularly the largest, Spotify. Sources suggest Spotify pays only between $0.003 and $0.0084 per stream, a payment which has to be split between all rights holders. Moreover, this will vary greatly depending on the country which the music is streamed in, and individual contracts with artists and labels. Assuming an average of $0.004 per stream, a thousand streams will earn just $4 in revenue. Which, to be fair, isn’t too different than the ballpark gross earnings for normal video views on YouTube.

Apple Music, in contrast, pays one of the best rates around, at $0.01 per stream. Unfortunately Apple is one of the few companies to have publicly disclosed their pay-per-stream amount. And no doubt does so because they know they pay more than seemingly anyone else.

At this point, we turn to the last of the ‘big three’ online services – YouTube Music. According to YouTube’s global head of music, Lyor Cohen, the company paid out more than $4 billion to the music industry during 2020, compared to Spotify’s stated $5 billion across the same period.

Again, however, the landscape is complicated. The formula by which YouTube calculates its royalty rates depends on many factors, including the country in which the content was viewed, the type (and cost) of advertising involved, whether or not the viewer was a paid subscriber and even the time of year. Sources suggest an average pay-per-stream on YouTube Music of around $0.006, or about $6 per thousand streams on average over the course of the year.

There are also set criteria as to which videos can be monetized in the first place. As with Spotify, YouTube’s royalty system has come under fire for a lack of opaqueness and perceived insufficient pay-outs. As a side-note, if you’ve ever wondered if performers, amateur or professional, who cover other people’s songs in YouTube videos need to pay a fee, the answer is yes. As is the case with busking, however, in practice this rarely happens outside of videos being claimed via a direct infringement claim or YouTube’s automatic Content ID system. In either case, earnings from that go to whatever company claiming copyright on something in the video. Controversially often even if some bit of music was only a few seconds of a vastly longer video and otherwise would in the courts likely fall under fair use. But the claimant knows good and well the youtuber is unlikely to bring the matter to court and has little recourse beyond that.

In the end, unlike, for example, the book industry, exact statistics for the music sector are hard to come by, not to mention earnings often vary pretty widely based on a number of factors. On top of that, few useful surveys have been taken on the matter, other than the aforementioned figures of around $50,000 a year for an average songwriter which, again, is skewed up a lot because of those in the top 10% earning comparatively huge sums compared to their lowly brethren. And even where you’d think there would be a little more even handed clarity, streaming services in particular, remain far from transparent in their workings and have different deals with different entities, further adding to the variance and unknowability of the general case.

What we do know, at least, is that like many creative industries, earnings for songwriters are heavily weighted towards a select few at the top. And the little direct evidence we do have for the rest suggests that those in the middle of the pack, or further down, are not able to rely on income from streaming alone to support themselves.

Thus, chances are you might never make the top of the pile, or even come close to earning that $52,000 supposed annual average. But, with hard work, patience and determination, it is possible to make a living as a songwriter in the modern era. And given there are outlets for publishing without needing to go through the old more or less handful of gatekeepers model to get to a mass audience, perhaps no time in history has there been more opportunity for the self driven songwriter to make their mark without needing a big break with one of the major studios.