I made a track with my friends, how do we split the royalties?

Reading time: 6 min

In music, the border between friends and collaborators is often blurred, especially when you are just setting out in the business. While creating a song with several people is a wonderful experience that brings several complementary talents together, it is also a professional adventure. Whether you are part of a band or you make a ‘featuring’, meaning a collaboration on a track, it is important to discuss the business side of this with your friends.  

Business means money, so the key lies in defining who does what and for how much. These conversations may seem painful, but they are necessary to avoid any confusion. To help you feel relaxed around creating a track with several other people, we will explain which roles each person can have, how to define the split, aka the distribution of income, and who gets which musical rights. Ready? Let’s go.

Which roles do the collaborators in a song take on?

While there are many different roles in music creation, here we will focus on the two main families involved. As you read the following, bear in mind that each individual may take on several roles from either family, and that each role may be held by several people.

The original composition family

Generally, a piece starts with a musical composition and perhaps also with lyrics. The people involved in this are the songwriters, and they are protected and paid by copyright. If you participate in the creation of the lyrics, the score or the composition, you are part of it. Same for the beatmakers, or people who go over the composition (arrangers) and review the lyrics (adaptors).

Once the composers wish to commercialize their work, they sometimes turn to publishers, whose mission is to find musicians who would like to perform the composition. Such a collaboration is formalized by a buy-out agreement that indicates the distribution of copyright between the two parties.  

The performance family

At this point, the work takes shape and becomes a performance – ie. it is played and sung and recorded. Those involved in this stage of the process are the performers, and they are protected and remunerated by master rights. If you sing in the chorus, or play an instrument, this is your team. To get a clear picture of this, just consider the people on stage during a concert (excluding any dancers, but you get the idea).  

For this part of the process, it is the producer, if there is one, who manages the financing, notably by making a recording studio available. The collaboration between the performers and the producer is established by a recording contract that determines the distribution of royalties between them all.

To understand who gets which rights, you can separate out the skills of all the different people who contribute to a song across the stages of its creation: on the one hand, those who participate in the score and lyrics, protected by copyright – the authors and composers, including beatmakers, arrangers, adaptors – and on the other hand, those who perform the composition, protected by the master rights – the singer, the chorus, and the various instrumentalists. It is possible for one person to do a little bit of everything, or to have several people working on the same task.

How do we split the income between us?

The split depends on the situation. Already, if you and your buddies are using a publisher and/or producer, everything is determined in your publishing and recording contracts. If not, you are self-produced and it’s up to you to discuss. It is impossible to cover all possible permutations, but to help you get some idea, we will give one example of each case, with some indicative figures taken from professionals in the sector, so you can use this as a general guide.  

The Bright Division

We start with a band signed to a label! The members are:

  • James on vocals and writing lyrics
  • Amy in the chorus and co-writing lyrics
  • Sara on keyboard and beatmaking
  • Mike on guitar, who helped Sara with the composition

They signed an artist contract (also called exclusive recording agreement), which includes a publishing (or licensing) contract and a distribution contract. They negotiated to receive 15% of the revenues generated by their song. In exchange for the remaining 85%, their label finances their recordings, their marketing and their promotion – in short, everything outside the creative process; everything required to market their music.

In practical terms, this means that they split the remaining 15% equally. Why? Because everyone has a role in the songwriting and in the recording.

Every situation has its own label deal. It's important to remember that the pros recommend that everyone – even beginners – negotiate 15% of the revenue generated by their music when they sign.  

The Trap

We continue with the independents and, to simplify, the members are the same as at the Bright Division, the difference being that here they are not produced by a label and manage without a publishing contract.  

James and Amy decide that James gets more copyright royalties than Amy because he wrote the chorus while Amy is more of an adaptor. Sara is on the same level as James, as she created everything from scratch before Mike refined it. James and Sara share 80% of the royalties thanks to their involvement in the writing of the lyrics and the composition, while Amy and Mike each take 10%.  

For the master royalties, it is simpler: they decide to divide the money equally. Even if she takes less space on stage, Amy has made her home studio available for the recording, and that counts!

What it gives in figures, 6 months after the release of their song in streaming and after a tour of indie festivals:

Copyright royalties generated = $10,000  

  • 40% for James = $4,000
  • 40% for Sara = $4,000  
  • 10% for Amy = $1,000
  • 10% for Mike = $1,000

Master right royalties generated = $40,000

  • 25% each = $10,000 per person

As a result, James and Sara earn $14,000 each, and Amy and Mike $11,000 respectively.

It’s simple. In a self-produced collab, you agree on who does what. This gives you who gets which rights, then, from there, you split the income by percentage. It can vary according to the involvement of each individual if there are, for example, differences in working time and number of verses vs choruses performed, or in financial investment in the material.

How do we receive our shares?

By streaming

If you are with a label, it takes care of the royalties and it is the label who pays you according to the agreement made between you.  

In self-production, you can do the same as The Trap and register on Bridger to get your copyright royalties. Where master royalties are concerned, you will have to figure it out with your digital distributor, aka DistroKid for The Trap. The principle of these services is very simple: in order to receive all your royalties, simply register online on each platform (Bridger & DistroKid) and indicate the percentages, bank info, and email addresses of each person involved.

On TV, radio and in public places

In order to get the master royalties from broadcasts in public places and on TV or radio, you have to register with a Collective Management Organization (CMO) dedicated to performers. This is valid for Europe but not for the US, where there is no master rights collection for TV or radio or for public places.

To receive copyright royalties, you will need to register with a CMO that deals with songwriters.

The way you collect your income depends on the channels where your song is distributed. For streaming copyright, Bridger does the trick. For streaming master royalties, a digital distributor like DistroKid or TuneCore that doesn't take any commission is a good solution. If your song is played in public places or on TV and radio, you have to pay membership fees to a CMO dedicated to performers on the one hand (except in the US) or to songwriters on the other hand.

What do I need to remember?

To figure out who gets which rights on a track, separate out the competences of each contributor across the different stages of creation. With a label, each situation has its own artist’s contract. In a self-produced collaboration, you agree on who does what to know who receives which rights, then you divide the income by percentage. It may vary according to specific circumstances – for example, differences in working time or financial investment in the material... Finally, the way in which each individual receives their income depends on the channels where your piece is diffused.

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