Royalties, Splits, and Collaborations

A Guide on How to Share Percentages and Negotiate Co-Writer Splits

Making on your own is a pretty straight forward process: if you write and record the whole thing yourself, then you’re the only one who gets paid when someone buys or plays the song. But once you start collaborating with other creators or using beats, the business aspect gets a bit more complicated.

This article is a basic guide to music royalties, who gets paid what, and how much is a fair percentage for the work you put in to a song.

What Are The Different Types of Music Royalties?

There four types of royalties for music. These types differentiate the way a song gets heard. They are:

1. Mechanical royalties are paid every time someone makes a one-time purchase of your song or album. If someone buys your music in a physical format (CD, vinyl, cassette tape, custom USB stick, whatever) or as a digital download (off Amazon music, Bandcamp, etc), then you are entitled to a percentage of the profit for that.
2. Performance royalties are paid any time your song is played. This includes concerts, radio, and streaming services (Spotify, Pandora, etc). If someone listens to your song but hasn’t outright downloaded/bought it, you still get a bit of money for that (and I really mean a “bit”).
3. Synch royalties are paid any time your song is paired with a moving picture. That includes music videos, film placements, TV show placements, video game placements, and a YouTuber including your song in a video that they upload.
4. Print music royalties are paid when the music of your song is written down in a tablature or as sheet music. This only counts if you’re the one who composed the music; if you only sang the song that someone else wrote, you won’t get any of these royalties.

Do I Get Royalties If I Didn’t Write the Song?

Yes, even if you release a song that you did not write, you are still owed a percentage of the royalties for being a performer of the work. There are two types of copyright protections for music:

1. Musical works (which protects the lyrics and composition), and
2. Sound recordings (which protects the specific performances of a song).

So if you record a song that you did not write, you are allotted royalties based on the sound recording protection but not the musical works. This goes for both covers and collaborations. Let’s say that you are a singer and you work with a producer who writes the entire song; you’re just singing it. In that case, you get royalties for that version anytime it is streamed or bought.

Is There Any Time A Person Does Not Get Royalties for a Song They’ve worked On?

Yes, are specific situations where a person will not get royalties for songs they performed on or produced. That is when the person explicitly waives their rights to royalties. This is usually done in standard contracts with people who get paid upfront for assisting in the production process; a few examples include:

• A session musician hired to play an instrument on a track and paid for their time and labor before the track is ever released.
• A beat producer who sells an exclusive beat and clearly states in the contract that he gives up his rights to seek royalties for the beat’s commercial use.
• An audio engineer who mixes or masters a song and provides his services on an upfront payment contract basis.
• A singer who is hired on a freelance contract basis to provide vocals but usually aren’t listed as a contributor (this is the musical equivalent of a ghost writer—someone who works on a book or screenplay but does not take a writing credit).
• A sample producer sells a guitar riff that he composed but offers it on a royalty-free basis (more on that topic in the next section).

What are Royalty-Free Samples?

Similar to beats, you can also purchase a single instrumental riff or audio clip and then loop that sound in your Digital Audio Workstation (DAW) to form the basis of your homemade backing track. These individual riffs or clips are what we call a sample.

Many samples are sold as royalty-free. That means, even though the composer of the riff or soundbite holds the copyright to that asset, they waive their right to collect payments for it’s use. If you want to use an audio sample in your song, then I recommend royalty-free samples to simplify the accounting process. You don’t have to chase don’t the sample maker and distribute monthly profit percentages; you don’t have to worry about lawsuits over copyright (assuming the person who sold you the sample was the legitimate copyright owner of it).

What If the Sample I Like Is Not Royalty Free?

If you find a riff or audio clip you just have to have, but the sample is not royalty free, you need to check the sales agreement for instructions on acknowledgments and royalty payments. If the sample seller is competent, he will tell you exactly how to give him credit and what percentage of the royalties he will be owed. Do not just grab a clip of someone else’s music and slap it in your track without permission.

Many of the biggest distribution services allow for royalty splits as a built-in feature. This means you tell the distributor everyone who contributed to the track and what percentage of the royalties they should get. The distributor will then automatically pay out each contributor without you needing to manually pay anyone. Distributions companies that have a royalty splits feature include:

• Amuse (free for the split receivers)
• Distrokid (everyone receiving a split must have a paid subscription as well)
• Beatstars Distribution (everyone receiving a split must have a paid subscription as well)
• OneRPM (basic membership is free, so contributors don’t need to pay membership to receive)
• Routenote (basic membership is free, so contributors don’t need to pay membership to receive)
• Repost by Soundcloud (I don’t think receivers need an account, but I can’t find specifics on their website)

If you prefer to handle the royalty payouts to your sample provider personally, you’ll just need to calculate their cut every time your distributor pays you and send it to them (say, through paypal or venmo).

Is It Cheaper to Split Royalties or Pay Upfront?

The cost benefit of royalty splitting will depend on how popular your song gets and how much time you’re willing to spend on accounting (calculating percentages and paying out everyone’s cut in recurring intervals). Most songs that get published on distribution services don’t make any money (often because artists don’t know how to properly market their music). So paying upfront for a collaborator to waive their portion of the royalties may not be cost-effective. If you already make good money and you rather pay now to benefit later, then go for it.

Clearly, not all collaborators you work with will let go of their royalty rights.If a person is willing to waive their royalties for their work, you can expect they will charge a larger one-time fee for their services—after all, if the track gets popular and makes a lot of money they will see no direct financial gain from it.

Some service providers will charge a smaller upfront fee if they also get a cut of the royalties (like beat makers), while others will only provide service for payment first and don’t expect a cut of the royalties (like mixing engineers). And then some will not charge up front at all (fellow songwriters or producers looking to build a portfolio).

Royalties vs upfront fees often works on a sliding scale: the larger the initial fee, the smaller a percentage of royalties that contributor will get. Producers and instrumentalists may let you negotiate the split based on what you can afford. It depends on:

• What service they are providing (don’t expect a sliding scale from a mixing/mastering engineer),
• How large of a business/following they have (the more popular a songwriter or beat maker is, the less likely they will negotiate on their prices),
• How they value their business (some people believe you get what you give and have lenient pricing policies, others hold fast to the idea that no work should be done for free)

How Should I Split Royalties on a Song?

Everyone involved in the creation of a song is entitled to get paid for their contributions, but not everybody will get paid the same amount. For major labels, the split calculations get quite convoluted…actually, insanely convoluted to the point that a hit song could be making millions but the producers or artists are still flat broke.

But for independent artists (which I assume you are, like me), there’s no need to use Hollywood’s funny algebra. You just need to agree on a percentage that everyone involved will get. This is usually done with whole and easily divisible numbers.

Now remember: there are two types of royalties for the two types of copyrights:

1. Musical Works (the lyrics/composition)
2. Sound Recording (the song in a finished audio format)

So whenever you are splitting with another person, you have to clarify what percentage everyone is getting of both types of royalties.

For the most part, here are the ways royalties most commonly get split with collaborators:

• 50/50 Split. If two people worked on a song together, they will usually split royalties evenly. This goes for both the composition and sound recording copyright royalties.
  • If you’re a singer-songwriter and you brought in a beat maker to create the instrumental, then you would likely split the royalties evenly. That is unless you paid extra for the beat maker to waive his/her royalty rights.
  • If you and another artist collaborate together on a song, it’s common to split it even also.
• 70/30 Split. If one of the contributors only provided a performance (usually vocals), then that person will get the 30% of the sound recording royalties. If they only sang what someone else wrote, they would get 0% of the composition royalties.
  • If you composed the music, wrote the lyrics, and produced the track, but brought in a vocalist to sing it for you (of vise versa, if you’re a singer and you hire a producer to make a song for you to sing), then it’s reasonable for the vocalist to get a smaller cut.
  • This exact percentage can fluctuate depending on the players involved. A singer will usually get between 15-30% of the cut. Independent producers tend to be more generous, especially if they are still making a name for themselves—which is why I suggest the 30% option. Major labels usually give closer to 15% to the singer. If a singer is more well-known than the producer, then they may demand a larger cut.

A Few Common Split Examples

Here are a few examples of the most common splits you will see and use:

50/50 Beat Split

70/30 Feature Split

50-50 Collab Split

50/25/25 Multi-Producer Split

When Should Royalties Be Agreed upon?

Always agree on the royalty split amounts before the work is even started! You should not be entering into any agreement or doing any work on a song unless you have the split percentages down in writing. This can prevent arguments and even litigation from happening later. You don’t have to write up a word-heavy legalese contract with multiple pages and appendices. Just an e-mail conversation can suffice; yes, e-mail agreements are considered legally binding.

If you conduct an agreement via email, make sure to include:

• The percentage split that each person will get for both types of royalties (the musical work and the sound recording)
• How and when the splits will be paid (if you’re distributor automatically pays out the splits, then let them know that)
• Ask them to confirm the agreement by emailing you back. If they have any changes they want to propose, they should email those back as well before stating that they agree

Best Practices for Royalty Splits when Collaborating

If you want to grow positive relationships with other artists or producers, you should try following these common courtesy conventions when it comes to royalties:

• Always clarify who is doing what before you start working together.
• Always agree on the royalties split before you start working, too.
• When in doubt, just split royalties evenly among each contributor to prevent hard feelings.
• It is better to give leeway and grow a relationship than to nickle-and-dime another music maker and gain a bad reputation.
• If you’re buying a pre-made beat, read the contract before you submit your payment. Don’t treat it like a EULA and skip through the walls of text; you need to know exactly what royalty rights the beat maker is waiving or expecting to receive.

Other Articles to Consider

Thanks for reading! If you found this guide helpful, here are a few more articles you may want to see:

• Do I Need to Learn an Instrument to Write Songs?
• How Do I Choose a Topic for a Song? (Part 1)
• The Pros and Cons of Beats
• What are the Best Instruments for Songwriting?