Music Industry 101

The Rules of
The Game.

Understanding royalties is the difference between a hobby and a career. Here is everything you need to know about how money flows in the music business.

Every Song Has Two Sides

1. The Master

This is the actual sound recording (the .wav file). It captures a specific performance.

Typically Owned ByLabel or Artist
Primary IdentifierISRC
Paid ByDistributor (DistroKid, etc.)

2. The Publishing

This is the underlying melody and lyrics. It exists before the song is ever recorded.

Typically Owned BySongwriter & Publisher
Primary IdentifierISWC
Paid ByPROs (ASCAP, BMI) & The MLC

The "200%" Rule

In music publishing, it helps to imagine that every song generates two separate checks, each representing 100% of its respective share type. Together, they make up the total publishing income.

  • 1

    Writer's Share (The Creative Half)

    Paid directly to the songwriter by the PRO. This share recognizes the creative work of writing the song.

    Golden Rule: This share belongs to you. In standard deals, you should never give this up.

  • 2

    Publisher's Share (The Business Half)

    Paid to the entity responsible for collecting royalties and licensing the song. If you don't have a publisher, you are your own publisher.

    The Negotiable Part: When you sign a publishing deal, this is usually what you are splitting or giving away in exchange for services/advances.

Common Deal Types

Self-PublishedYou keep 200% (All Income)
Co-Publishing DealYou keep 150% (75% of Income)
Full Publishing DealYou keep 100% (50% of Income)

Total Publishing Income

Paid via PRO (ASCAP/BMI)
Writer's Share100% of Writer Side
Paid via Admin/Publisher
Publisher's Share100% of Publisher Side
*When entering splits in SplitChord, you are defining the Copyright Ownership, which serves as the basis for both shares.

Who Collects the Money?

PROs

Performance Rights Orgs

Collect royalties when your song is played publicly (Radio, TV, Live Venues).

ASCAPBMISESACPRS

SoundExchange

Digital Performance

Collects royalties for non-interactive streams (Pandora, SiriusXM). Pays Master owners & Artists directly.

US OnlyDigital Radio

The MLC

Mechanical Licensing Collective

Collects mechanical royalties from streaming services (Spotify, Apple Music) for Songwriters/Publishers.

Interactive StreamingDownloads

The 4 Codes You Need

UPC

Universal Product Code

Assigned by your distributor. Tracks the actual release (Album/Single).

ISRC

International Standard Recording Code

Assigned by your distributor. Tracks the MP3/WAV file.

ISWC

International Standard Musical Work Code

Assigned by your PRO. Tracks the lyrics & melody.

IPI

Interested Parties Information

Your unique songwriter ID number assigned by your PRO.