One of the great things about music royalties is all the different ways they generate income. After all, music is used in many different ways, and each of those uses results in a royalty payment of some kind.
For instance, Public Performance royalties are a huge source of income for songwriters, and collect royalties from a wide variety of uses. They include:
- Digital Streaming
- Streaming Video
- Radio/Satellite Radio
- Live Performances
- Restaurant/Bar Licensing
As songs age, the way they are used changes, which means the way they generate royalties changes with them. Whether you’re an artist collecting royalties, or an investor interested in buying music royalties, knowing how royalty payments change over time is important.
So we examined how a group of about 5,000 songs submitted to our Know Your Worth analysis app performed over time, from their release in 2010 through 2018. We measured both overall public performance earnings, as well as earnings by source/format.
The results are below. You’ll notice a few stark takeaways:
Radio earnings dominated in the early years but then diminished over time.
Streaming remained a relatively small component until about 2014, which is when streaming as a format really began to take off industry-wide.
Streaming earnings remain constant and steady from 2015 onward.
Royalties By Source Over Time
As you can see, the majority of public performance royalties generated by catalogs submitted to our Know Your Worth app overwhelming come from three sources—streaming, TV/film, and radio—we limited the results to those sources. The rest had a very small impact on the overall royalty income of the catalogs analyzed.
So here’s another look at the same data, but represented as a line chart, and eliminating all but these top three sources:
Royalties By Source Over Time—Filtered
A few things interesting about these charts:
They both reinforce the notion that a song’s prime earning years are the first three years after release.
Overall earnings fall after three years, but they fall to a relatively stable and consistent level.
That level is predominantly driven by streaming earnings.
Another quick/interesting note about streaming earnings is the spike around 2014. That was the year that streaming services took hold and began playing a meaningful role in overall music income.
Both results above present the earnings by source in absolute dollar terms. So let’s take one final look at the results displayed as a percentage of earnings instead. This will better illustrate the overall impact each source of royalties has independent of the overall earning totals.
Royalties Over Time As A Percentage of Earnings
Clearly, Radio plays a significant role upon initial release, as most modern stations focus on new releases. But over time, radio’s impact fades as only those songs with the greatest staying power remain on the air.
Streaming however provides a consistent slow build, as the format is not as dependent on programming choices, but rather user preference.
The main takeaway here is royalties perform differently based on different variables. Key among those variables is the age of the song. Knowing how different types of royalties fluctuate over time will help you evaluate the performance of your individual royalty stream by comparison.
Thousands of artists have used our online evaluation app to submit their catalogs for analysis. Some just to get interesting data on their catalogs, others to find out if they are eligible to list on the marketplace.
For this report, we queried that database of catalogs to find trends related to the source of royalties, with certain filters. In all, we examined over 5,000 songs distributed by both ASCAP and BMI.
We focused on Public Performance royalties only, as they collect from the greatest diversity of formats
We limited our analysis to those with complete earnings data for the timeframe of 2010-2018.
The dates listed are the dates the songs were performed, not the dates of payment for those performances.
We filtered out international income, as PROs report international earnings in bulk and not as separate formats.