The Song Pays Everyone: How the Music Industry Is Connected
By Written by Peter McVeigh
Every job in music starts with a song. Here's who you'll work with, how each of them gets paid, and why working harder for each other benefits everyone.
Every job in the music industry starts with someone writing a song or a piece of music. No song means nothing to record, nothing to perform, nothing to license and nothing to collect. Managers, labels, publishers, bookers, engineers, accountants and lawyers all earn their living from work that begins with a composer or songwriter.
That doesn't make everyone else less important. A song on a hard drive earns nothing either. It needs people to record it, release it, register it, perform it and protect it. The writer is the start of the chain, but the chain only pays when every link does its job.
This guide looks at the people you'll work with, what each one does and how they get paid. Most importantly, it looks at why working harder for each other benefits everyone, and what it costs when someone doesn't.
How the money flows
One song can create several kinds of income, and each one passes through different people.
A single song might be recorded, released, played on the radio, streamed, licensed for a film and performed in a venue. Each use creates work for someone and income for several people. If the writer doesn't register the song, the money can stall. If the band plays badly, the next show gets harder to sell. If the label doesn't promote the record, fewer people find the song. A weak link costs everyone connected to it.
Two kinds of incentive
People around an artist usually get paid in one of two ways, and each creates its own reason to do the job well.
Paid on a percentage or a share. A manager, booking agent, publisher or record label earns more when the artist earns more. Their income rises and falls with yours, so your success is their success.
Take a manager. If they work harder and the band does better, their commission grows. There is a second reward too: a manager with a successful band gets noticed, and more artists and industry people want to work with them. Both sides have a reason to do well.
Paid a flat fee. A tour manager, session musician, live sound engineer, recording engineer, accountant or lawyer is usually paid for the job, whether the record sells ten copies or ten million.
That doesn't mean they have less at stake. What they are protecting is their reputation. A tour manager gets the same fee on a great tour and a chaotic one, but do the job badly and they may never be hired again. Do it well and they get recommended to the next band, and the band after that.
So one group is working for a share of tomorrow's money, and the other for tomorrow's phone call. Good teams understand which is which, and treat people accordingly.
The people you'll work with
You'll find short definitions of industry terms and jobs in our Documents section. Here, the focus is on what each person contributes, what they stand to gain, and what happens when they don't deliver. Fees below are common ranges, not fixed rules, so always check what your own agreement says.
Manager
What they do: A manager looks after the whole career. That covers planning, finding opportunities, building the team, negotiating alongside your lawyer and keeping everything moving.
How they get paid: Usually commission, commonly 15 to 20 percent of what the artist earns.
Why working harder pays: Every opportunity they create raises their own income. A visible success also brings other artists to their door, along with better relationships at labels, publishers and promoters.
If they fail: The artist loses time, which is hard to get back. The manager earns 20 percent of very little, and develops a reputation as someone who signs acts and goes quiet. Word travels fast in a small industry.
What they need from you: Songs, a reliable work ethic, honesty and quick answers. A manager can't sell a band that misses rehearsals or ignores emails.
Publisher
What they do: A publisher looks after the song. They register works, collect income around the world, pitch songs for sync and to other artists, and may set up co-writes.
How they get paid: A share of the song's income, or an administration fee. The figure depends entirely on the type of deal.
Why working harder pays: A publisher's income comes from songs being used. Every placement, cover and correct registration earns money for the writer and for the publisher.
If they fail: Songs sit in a catalogue earning nothing, or money goes uncollected because a registration is wrong. The writer may have given away rights and received very little effort in return. Writers talk to each other, and a publisher known for sitting on songs will struggle to sign good ones.
What they need from you: Finished songs, correct splits agreed with your co-writers, and a willingness to write.
Record label
What they do: A label funds, releases and markets recordings. Depending on the deal, that can include advances, recording budgets, marketing, radio promotion and distribution.
How they get paid: Usually from the recording's income. They often recoup their spending from your share first, which is why you should understand any deal in full before you sign. Our guide to record deal advances covers this in detail.
Why working harder pays: A label's return comes from recordings finding an audience. Success also makes the label more attractive to the next artist and to radio and media contacts.
If they fail: The album comes out to silence, and the artist may still owe the label money. A label can also lose out when an artist underdelivers, so the risk runs both ways. That is why bad deals rarely stay good for anyone for long.
What they need from you: Great recordings, delivered on time, plus an artist willing to promote them properly.
Royalty collection agency
What they do: These organisations license music use and pay the people who own the rights. In the UK and Ireland that means PRS for Music, PPL, MCPS and IMRO. In the USA it means ASCAP or BMI, The MLC and SoundExchange.
How they get paid: Usually by deducting costs or fees from what they collect. The rules differ by organisation, so check each one.
Why working harder pays: Their whole purpose is to collect and pay accurately. Members and licensees need to trust them for the system to work.
If they fail: Money reaches the wrong people, or arrives late, and members lose confidence.
What they need from you: This is the one relationship where most of the work is yours. They can't pay you for a song you never registered, or a setlist you never reported. A wrong split or a missing writer can hold up payment for everyone on the song.
Booker
What they do: The word covers two jobs. A booking agent represents the artist and sells shows. A venue booker or promoter buys shows and sells the tickets.
How they get paid: Agents commonly take a percentage of the artist's show fee, often 10 to 15 percent. A promoter keeps what remains after the costs and the artist's fee.
Why working harder pays: An agent who builds an artist from small rooms to larger ones earns more each time. A promoter who sells out a show makes money and gets the artist's next tour.
If they fail: Badly routed tours and half-empty rooms cost everyone money, and the artist can lose a town for years. A promoter who doesn't promote, or doesn't pay, soon finds agents won't offer them acts.
What they need from you: Turning up on time, promoting the show to your own audience and being easy to deal with on the night. A promoter who loses money on you is unlikely to book you twice.
Live sound engineer
What they do: They make the band sound good in the room. That means working from your channel list and stage plot, setting up, running the soundcheck and mixing the show.
How they get paid: Usually a flat fee per show or tour, or a wage from the venue.
Why working harder pays: A great mix makes the band look better and gets the engineer asked back. Bands who tour together talk, and a good engineer can build a career on those recommendations.
If they fail: The audience hears a bad show and blames the band. The engineer's phone stops ringing, and the band may lose fans it worked years to win.
What they need from you: A clear tech spec, arriving on time, gear that works and basic respect. An engineer who gets your stage plot a week early and a thank you at the end will go further for you next time.
Recording engineer
What they do: They capture the performance. They set up microphones, run the session, manage the files and often have a strong influence on the sound of the record.
How they get paid: Usually a day rate or a project fee. Some negotiate a credit or a share, depending on their role.
Why working harder pays: The finished record is their advert. A credit on something that sounds great brings in the next client, and often at a higher rate.
If they fail: Lost files, poor takes and missed deadlines waste your budget. A record that has to be redone can use up the money meant for promoting it.
What they need from you: Songs that are rehearsed and ready, clear decisions and paying on time. Time you waste in the studio is your own money.
Session musician
What they do: They play on recordings and at shows, bringing their skill to someone else's music.
How they get paid: Usually a flat fee. Depending on the country and the recording, they may also be owed performer royalties, so keep records of what you played on.
Why working harder pays: Much session work comes through word of mouth. If they arrive prepared, play well and are good company, they get the next call. They also get recommended to producers and other artists.
If they fail: Arriving unprepared on a paid session costs everyone time, and they may simply never be called again. Nobody announces this. The phone just goes quiet.
What they need from you: Charts or demos in advance, clear pay agreed up front, credit where it's due and prompt payment. The musician who gets paid late tends to be busy next time you call.
Accountant
What they do: They look after the money side: tax, expenses, income from many different sources and the records you need to keep.
How they get paid: A fee, often fixed or hourly.
Why working harder pays: Musicians mostly find accountants through other musicians. One who understands royalties and touring income, and saves clients from nasty surprises, gets recommended.
If they fail: Late filing and missed expenses can cost you money, and can lead to penalties. You remain responsible for your own tax return, so this is one to take seriously.
What they need from you: Tidy records, receipts and honest answers, given early. Even the best accountant can't fix a carrier bag of receipts the day before a deadline.
Lawyer
What they do: They read, explain and negotiate your contracts, and advise you when a deal or a relationship goes wrong.
How they get paid: Usually hourly or a fixed fee. Some music lawyers agree other arrangements, so ask at the start.
Why working harder pays: A lawyer whose clients get fair deals builds a reputation among artists and managers. As those clients grow, the lawyer's work grows too.
If they fail: A clause that was missed can follow you for your whole career. That's why a specialist music lawyer is worth seeking out.
What they need from you: Bring them in before you agree to anything, not after. A lawyer can improve a deal you haven't signed. They can do far less with one you have.
And one more: the tour manager
A tour manager is the clearest example of a flat-fee job. They look after schedules, travel, money on the road and everyone's wellbeing. Their fee doesn't change if the tour is a triumph, but their future does. If the tour runs smoothly, they get hired again and recommended to others. If it falls apart, they may never hear from that band or its manager again.
Good and bad relationships
The clearest lessons come from real careers. These public examples show what happens when incentives line up, and when they don't. The four stories below come from published reports, and the short scenarios after them are made up to show how this works at a smaller scale.
Good: Ed Sheeran and Stuart Camp
Stuart Camp has managed Ed Sheeran since before Sheeran had a record deal. Camp heard a demo CD while another artist was looking for a tour support act, went to see Sheeran play in Leeds, and the two got on straight away.
The lesson is in the timing. Camp backed an artist when there was little money to take a percentage of, and that commitment grew with the career.
Good, with sharp elbows: Peter Grant and Led Zeppelin
Led Zeppelin's manager Peter Grant demanded 90 percent of the gate around 1972 and 1973, when the usual split was reported as 60-40 in the artist's favour. His commission rose with the band's money, so he had every reason to fight for it.
The warning is that a good deal for one link in the chain can squeeze another. Promoters still need to make a living. Grant could demand those terms because of the band's drawing power, and very few acts ever have that leverage.
Bad: Colonel Tom Parker and Elvis Presley
Parker took 50 percent, while Judge Blanchard Tual later noted that the standard was 10 to 15 percent. Tual also found that Parker had never registered Presley's songs for royalties, and that he had defrauded about $7 to $8 million over three years. The case was settled out of court in 1983.
This shows how a manager's interests can drift away from the artist's. When someone is paid so well that they no longer need the artist to do better, the shared incentive disappears, and so does the protection.
Bad: TLC and CrazySexyCool
TLC's CrazySexyCool sold 14 million copies worldwide. Yet in 1995 the group filed for bankruptcy, declaring debts of $3.5 million. Their deal reportedly paid 56 cents per album, split three ways, and they alleged that costs were then recouped from them. They were reported to have earned under $50,000 each a year, and the dispute took two years to settle.
The lesson is that a hit doesn't protect you from a bad contract. It is exactly the sort of deal a specialist lawyer should read first.
Everyday examples
These made-up scenarios show the same forces at work for an independent band.
Who: Good relationship: Bad relationship
Manager and band: The manager finds a support slot. The band promotes it hard and the room is full. The promoter books them again, and everybody's next deal gets better.: The band ignores emails and misses a deadline. The manager stops pushing and starts looking at other acts.
Writer and publisher: The writer delivers songs with splits agreed. The publisher lands a sync. Both get paid.: Co-writers never agreed splits. The sync is ready, but the paperwork stalls and the client picks another song.
Band and sound engineer: The band sends a stage plot in advance. The engineer is prepared, the show sounds great and they're happy to work together again.: Nothing is sent, the band arrives late and soundcheck is lost. The show suffers, and everybody blames everyone else.
Artist and session player: The player gets demos early and is paid within days. Next time, they make room in a busy diary.: The player is paid three months late. Next time, they're suddenly unavailable.
Band and promoter: The band shares the show and helps sell tickets. The promoter makes money and offers a better fee next time.: The band doesn't mention the show. The promoter loses money and doesn't book them again.
Band and accountant: Records are kept all year, the return goes in on time and there are no surprises.: The band hands over a year of paperwork at the last minute. The bill is higher than it needed to be, and penalties are possible.
How to build the right relationships
The music industry is smaller than it looks. The engineer you were rude to in a small venue may be mixing a festival stage in five years. Reputation is the currency every person in this article shares.
1. Know how each person gets paid. Then you'll know what motivates them, and what they stand to lose.
2. Be worth working with. Write the songs, finish the work, answer your emails and turn up on time. People give their best to artists who give theirs.
3. Pay people properly and promptly. On a flat fee, your reputation as a payer is a big part of what you're offering.
4. Get it in writing. Clear agreements protect friendships. Agree splits, fees and terms before the work starts.
5. Take advice before you sign. Have a specialist read anything long term.
6. Say thank you, and give credit. It costs nothing, and people remember it.
7. Walk away when the incentives no longer line up. If someone gets paid regardless of how you do, or you've stopped delivering for them, have the honest conversation.
It all comes back to the song. A songwriter's work creates the money, and everyone else's work helps that money reach the world. When each person works harder for the others, the whole chain gets stronger, and the first person to benefit is usually you.
This article is for general information only and isn't legal or financial advice. Deal terms and fees vary, so get professional advice for your own situation.
Sources
https://musicbusinessworldwide.com/key-songs-in-the-life-stuart-camp
https://www.wbur.org/hereandnow/2018/11/26/led-zeppelin-peter-grant-manager
https://www.biography.com/musicians/elvis-presley-colonel-tom-parker-relationship
https://beat.com.au/the-dark-tale-of-tlc-going-bankrupt-in-the-90s/