MusicRadar

Are you ready to make music your business?

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The music industry in 2011 is a strange place indeed, with not even those who've been working in it for years knowing precisely what the future holds. However, systems for making money remain in place, and anyone who's thinking seriously about turning their music into cold, hard cash would do well to have at least a basic understanding of how they operate.

Hence this guide: it won't tell you everything about the music business, but it should be enough to give you a basic understanding of what makes it tick and to make you think about how you might become part of it.

Record companies

The 'traditional' path to music industry success involves your record being heard by a record label that'll sign you as an artist to release it. Better still, they'll release a body of your work which might span an EP, album or multi-album deal.

Effectively, the label acts as an investor in you and your project, paying for studio time, mixing and mastering and, hopefully, an advance, which is money up front and in your pocket to tide you over until your cut of the money from sales - known as royalties - starts coming in.

The label will also handle documentation for the release including royalty splits that detail what percentage of every pound earned gets paid to you and any co-writers and what percentage goes back to the label to cover their initial investment and, hopefully, generate a profit so that they'll be able to invest in you again.

Your cut of your music

The Mechanical Copyright Protection Society (MCPS) pays royalty shares on copies of your track. This means that the more units you sell, the greater the amount will be, but it also means that if your song ends up on compilation CDs, is used on DVDs or even placed inside a mechanical toy, you'll get paid.

Say a compilation album has 20 tracks on board and one of them is yours. That means you get 5% of the MCPS money generated by sales.

Publishing your music

Publishing is exploitation of your track in any form and publishing income can be gained from a wide number of sources. The term dates from when songs were literally 'published' and sold as printed sheet music but these days publishing money is earned whenever a song is played on the TV, radio or on a film soundtrack, when it's covered by another artist, when it's performed live, when it's played in Topshop's changing rooms… the list goes on.

In theory, whenever your track is aired in public you'll get paid. This system works thanks to collection agencies such as PRS in the UK or ASCAP in the US, which monitor such airings and collect and distribute the money accordingly.

TV, movies and more

One of the major growth areas in music publishing – and an increasingly important revenue booster for artists releasing their own material – is having music synced to TV, film and videogame projects. The advantages of sync are obvious: you'll be paid to have your track used; you'll generate a fresh revenue stream if your song makes it onto the film/TV show's soundtrack; and you'll raise awareness of your record as it'll reach a potentially huge audience who might not otherwise have heard your track.

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