Thoughts - Short Journals on Music Royalties and Licensing

Originally posted on my Facebook: Link

July 16, 2022 - Internet vs Radio

Mindful/logic on royalties.

I sometimes engage in this conversation on broadcast royalties, especially when I hear people talking about the low rates for internet royalties.

Rounding up - and roughly (following ASCAP - and there are several variables that can change this) -

1) 1 listen on Spotify = royalty of $0.0003

2) 1 terrestrial broadcast = royalty of $10.02561

Why the discrepancy? Following the math - 1 listen is an exact metric, but the performing rights organization can only roughly measure the exact number of listeners on a radio broadcast. So 33,418 might be a good estimate as to the average listening base for the radio station ("2" divided by "1"). In other words, it would take 33,000ish spins on Spotify to represent the audience reached on 1 terrestrial radio broadcast.

So, if your mortgage payment was $2,000 a month, you would need to convince 6,666,667 people to listen to your song every month on Spotify or get placed 199 times on terrestrial radio stations.

June 29, 2022 - A Look at Some Royalty Auctions

As a creative, I always encourage artists to be mindful of their royalties. All three of these were put up at auction and would earn the creator of the product the final bid for a term... so the creator gets the 'sold for' price and the new owner gets the royalty.

(1) So, to own royalties for every time someone buys Ben and Jerry's Cherry Garcia = sold for $50,750 for 10 years of royalties (currently paying at $6,500 - $7,500 per year).

(2) To own royalties for every time someone watches the movie Trading Spaces (Eddie Murphy/Dan Akroyd movie from the 80's) = sold for $140,300 for the life of the creator +70 years of royalties (currently making about $8,000 - $9,000 per year).

(3) To own royalties for Jay-Z’s Multi-Platinum/Grammy-winning “Empire State of Mind” = sold for $190,500 for 10 years of royalties (currently paying at $35,000 per year). <--- and that's mostly from international streaming!

Disclaimer: This is not investing advice and ALL investments come with risk; it is just a curious look at creatives and how they can leverage their rights/stakes in royalties to investors.