How do artists make money?
Artists typically receive public performance royalties from Public Performance Royalty Companies (PROs) and those firms are tasked with collecting royalty payments from radio, television, streaming services and other public use of their music at nightclubs and concert halls (played or covered) that are then shared with the artist. The big PRO firms are ASCAP, BMI, GMR and SESAC.
Artists receive Mechanical Royalty payments from Record Labels that provide the artist payments based on the number of units sold when a record is in mechanical form (CDs, Download, etc). The payment rate is determined by the Copyright Royalty Board as a Stat rate (9.1 Cents per song per record sold for songs 5 minutes or shorter) . Streaming services royalty rates vary; Spotify’s royalty payment rate to the artist is 10.5% of gross income less what royalty payment the service pays to the PROs or about 6%, this changes over time.
Artists receive Master and Synchronization (Sync) payments from a Synchronization Representative (Sync Rep) who in turn works with producers of radio, television and movies that pay the artist for the exclusive or non-exclusive use of their Music Works and/or Sound Recording . The term Sync means synchronization of the sound recording with the existing audio, video or film.