Music Finance: The Complete Guide to Money in the Music Industry
Why you could be missing out on royalties — and how you can start collecting them today
You may have gotten into music because you’re an artist, but to succeed in this industry, you’re going to have to excel at the “boring” stuff too: music finance. From explaining why you're probably missing out on revenue to listing off music finance companies you need to partner with, this article is your all-in-one guide to the financial side of the artist’s life.
Why musicians miss out on royalties
Did you know that nearly a half-billion dollars in royalty payments have yet to be claimed by their rightful recipients?
Let's work through an example to illustrate how musicians often miss out on royalty revenue. Imagine there’s an artist called Saint Vesuvius who creates a stellar lo-fi chillwave track called “Volcanowave III” that they publish on YouTube Music, Spotify, Apple Music, etc. Then, a popular music curator finds the song and includes it on one of their playlists. This good fortune should result in a bump in Saint Vesuvius’s royalty payments, but there are several reasons why that might not happen:
Inconsistent naming: The track could be called “Volcanowave 3” on some platforms “Volcanowave III” on others.
Forgotten platforms: Without an automated tracking method, it’s easy to forget to check on every platform where the song lives.
Missing identification: Money falls through the cracks if the song doesn’t have an International Sound Recording Code (ISRC).
Suppose Saint Vesuvius doesn’t collect everything they're owed within three years. In that case, the remaining unclaimed royalties go to the biggest artists and publishers in the industry, according to their size. This time limit makes it essential for artists to learn everything they can about music royalties and start collecting them as soon as possible.
Read How to Find Unclaimed Music Royalties for more tips on collecting what you’re owed.
How to track royalty payments
Now that we’ve covered how royalty payments can go unclaimed, let’s review the steps you can take to track down every bit of your revenue.
In most cases, the royalty you’re owed will fall into one or more of the following categories: performance royalties, mechanical royalties, and sync royalties. Your approach to tracking these varies a bit depending on the type of royalty:
For performance royalties, you’ll want to work with a performance rights organization (PRO). These companies help musicians get what they're owed from television networks, radio stations, live venues, etc. The most popular PROs in the states are ASCAP, BMI, SESAC & GMR. If you’re in Canada, SOCAN is a great option.
For mechanical royalties, you’ll want to work with a distributor like DistroKid if you’re an independent artist. If you’re signed with a record label, they’ll ensure you get whatever mechanical royalties should come your way.
For sync royalties, you’ll also want to work with a PRO or a company that specializes in collecting those sorts of royalties.
To learn more about the royalty payment system, check out How Do Music Royalty Payments Work?
What music finance companies help artists earn more?
Trqk
When it comes to helping artists get paid, we think Trqk is one of the best in the industry. We may be a bit biased, but our Music Royalty Intelligence system, TrqkIQ, keeps tabs on your music no matter where it's playing around the world — and ensures you get every performance royalty dollar it generates. It also highlights opportunities for you to earn more revenue.
Overall, Trqk provides three kinds of support:
Surfacing public performances: Our audio ID tech spots on-air performances of your music and uncovers any shortfall in the royalties you're getting for this usage.
Providing trend analytics: Our platform provides intuitive visuals that help you understand who’s playing your music, where they’re playing it, and how it’s being used. This feature enables you to discover trends and opportunities you would have otherwise missed.
Empowering relationship management: Trqk’s tech ensures artists are in the driver’s seat in their relationships with libraries, publishers, and production companies.
Sound Royalties
With the backing of industry superstars like DJ Khalid, Lil Wayne, Pitbull, and Wyclef Jean, Sound Royalties is a leading music finance company that helps artists get the financing they need to accomplish their dreams.
Built to serve this space, their offering includes many of the features you’d look for in a financing partnering:
Copyright protection: You’ll never lose the copyright to your work — no matter what.
Diverse pricing: Sound Royalties offers terms that cater to every artist’s budget.
Music-based financing: The financing is derived using the estimated market value of your work instead of your financial situation.
Industry experience: The company is staffed with seasoned vets that know where you’re coming from and can provide precisely the support you need to succeed.
To explore two more companies that support working musicians, read 4 Music Finance Companies Helping Artists Get Paid.
What are the best music finance jobs?
The musical artist isn’t the only one handling money in the music industry, of course. There are many different roles intersecting with finance, including:
Producer
While music producers wear numerous hats, their core responsibility is budget management. They ensure that every musical production is artistically excellent and financially sound, i.e., on time and on budget (OTOB). Most of the time, producers have to plan the recording sessions, handle album manufacturing details, supervise the marketing, manage the musicians, and get production across the finish line on the designated date.
Beyond these strategic, relational, and logistical challenges, producers are also expected to enhance the quality of the finished product. They oversee the entire recording and post-production process and have to provide helpful input at every stage.
Essentially, producers must balance artistic dreams and financial realities — drawing out the ideal output sitting right in the middle.
Business manager
Business managers help musicians with their finances — in other words, the business of making and managing money earned from their music. Managing a broad range of tasks, these professionals can help their clients handle their investments, insurance, taxes, tour financing, etc. They also are expected to work with a musician's agents, producers, and lawyers to further their career and navigate financial issues. On top of all this, business managers are increasingly expected to be on top of their client’s royalties payments and ensure they’re getting everything they’re owed.
Keep broadening your music finance career options by reading 5 Music Finance Jobs That Are More Than Crunching Numbers.
How to start collecting lost royalty revenue
Got an intuition you’re not getting all the royalty payments your music is earning? You’re not alone. There’s an army of artists who are losing out because of how difficult it can be to navigate the financial side of this industry.
This is a big reason why we created TrqkIQ. Designed from the ground up by musicians and for musicians, this Music Royalty Intelligence platform will help you earn everything you’re worth. Reach out to get started today.