Publishing Royalties Amongst a Pandemic: COVID-19’s Impact on Royalty Collection

We’re nearing almost a full year into the COVID-19 pandemic and it’s safe to say that the COVID-19 virus has upended nearly everything we took for granted: How we socialize, how we shop, and how we earn a living. Like everyone else, music makers have had to adapt on the fly, and some more than others. For working musicians attempting to navigate a new reality in which public gatherings like concerts are on hold indefinitely, an important question remains —how do you continue to earn money?

While there’s no one solution or answer to that question, there is a partial solution: The widespread availability of high-speed internet allows creators and fans around the world to enjoy live streamed concerts and connect more directly with fans through social media, among other virtual events. For many working musicians this virtual access has been a saving grace, but exactly how these events generate royalties remains unclear.

In this article, we’ll attempt to cut through the noise with some actionable information. The topics we’ll cover include:

  • Who actually gets paid for live streamed concerts?
  • Which platforms allow you to get paid (and pay royalties)?
  • Comparisons of domestic / US responses to COVID-19 and overseas approaches
  • Forecasting long-term impacts of COVID-19 on the music industry in general as well as on songwriters specifically

Ready? Let’s dive in.

Who Actually Gets Paid for Live Streamed Concerts?

As Rolling Stone and other industry publications have noted, COVID-19 has accelerated a trend that was in motion before the pandemic hit. Live streamed shows began almost by accident in 1993, when engineers at the Palo Alto Research Center tested their new internet broadcast gear during a show by local noisemakers Severe Tire Damage. The event was decidedly low-budget, but by the end of the following year, the Rolling Stones had hopped on the bandwagon, offering free live streamed footage of the first few songs from a concert in Dallas on the night of November 18, 1994.

The Stones’ event was underwhelming, at least by today’s standards. The feed was choppy and lo-res, the sound quality poor. Because so few home computers had the processing power (and a truly high-speed internet connection), it’s estimated that perhaps 1,000 fans in all tuned in. Then again, the live stream wasn’t really the point: It was essentially a teaser designed to drive sales of the band’s pay-per-view Showtime concert, at that time the cutting edge of home media consumption options. But in retrospect, it was a giant leap forward in terms of how we consume live music.

Why? Assuming the concert wasn’t simulcast on live television, the only ways one could consume live music back then were by actually attending the event, or by purchasing the footage on physical media such as VHS tape or DVD afterwards. Because editing and mixing are expensive—as is transferring the finished product to media—it was out of reach for most performing artists. The event cracked the door to a far less expensive and fleet-footed way of sharing content. From here on in, it was only a matter of time before the apparatus to commercialize it caught up. 

Those first live streams were free to watch, but this soon changed as faster internet and money-handling platforms like PayPal evolved. In 1995, the Seattle Mariners made history with the first live streamed baseball game. Crucially, viewers needed a $4.95 a month subscription to the ESPNET premium sports network. By 2008, the still-new YouTube had gained the clout and know-how to host the first “YouTube Live” event, featuring Katy Perry and will.i.am. Though billed as the kickoff to an annual event, the show garnered mixed reviews and the series was quietly scrapped. Fast-forward to April 2020, when—spurred by the realities of the global pandemic—Korean pop group BTS tested the waters with an event consisting mostly of pre recorded footage. Sensing opportunity, the group hosted Bang Bang Con: The Live in June, a live streamed concert event that drew a whopping 750,000 fans (and earned around $20 million dollars).

In today’s socially distant environment, live streamed concerts have replaced live events completely. And that raises a question about how these events are produced and shared. The question for you to consider is: Are you the “venue owner,” or do you partner with a dedicated promoter? Here are some thoughts on each.

Model #1: You Are the Venue (and Promoter)

It’s increasingly easy to host live streamed concerts yourself, typically via a streaming service such as YouTube Live, Instagram, Twitch, or Patreon. In this model, you decide what to charge viewers, if anything. Some established artists like P!nk, have treated these live events as a promotional giveaway. Others charge a subscription fee, use a pay-per-event model, or simply accept virtual tips during the performance.

Because the production costs are low—webcam, audio gear, lighting and sets, if any—nearly anyone can create (and monetize) their live streamed events. Depending on your budget, you can get by with a minimal setup for anywhere from about $100 on up. Fortunately, if you already self-record and produce, you’ll have most or all of the audio gear you could possibly need. In this case, all you’ll need are a camera and encoding software and/or hardware to complete the setup.

In some cases they’ll need to pay a subscription fee to the hosting platform, but these are typically minimal, on the order of $4.99 a month and up in the case of Twitch Prime (an expanded version of the hosting platform’s basic service plan).

Model #2: You Partner with an Established Platform

More established artists often partner with dedicated concert platforms such as Maestro, which has built an impressive roster of artists such as Billie Eilish and Tim McGraw. These events typically boast much higher production values, and correspondingly higher ticket prices. Quoted inRolling Stone, Maestro’s CEO Ari Evans estimated such events draw .5% to 2% of a given artist’s Instagram following. McGraw hasn’t disclosed how many fans attended his recent “Here on Earth” album kickoff experience. But given that he has 2.7 million Instagram followers, some quick back-of-envelope math tells us that, with a ticket price of $15 for his live stream, McGraw could have drawn anywhere from 135,000 to 540,000 audience members, and netted anywhere from $200,000 to $800,000 for the event.

Tantalizing though this model is, it depends on a level of recognition outside the reach of most artists just beginning their careers. So with that said, let’s turn to another important question about streaming and compensation: What about your royalties?

Live Streaming and Royalties

Fortunately for music makers, an increasing number of live streaming platforms allow for artists to be compensated, whether by using a subscription model (in the case of Patreon or Twitch) or allowing streamers to insert donation links (as does Instagram Live). We’ve also touched on other platforms, including TikTok, that allow songwriters and artists to earn one or both types of song royalties. Be sure to check out our past article for more information on the type of royalties you might expect.

So, should you expect those royalties to increase now that the music industry is so virtual? As with many things, it’s not as straightforward as we’d like. The legal landscape around streams and royalties have been clarified in the last few years (in large part due to the MMA, which Songtrust strongly supported), but despite the sudden and rapid growth in livestreaming due to COVID-19, most music creators haven’t yet seen or been paid many royalties.

Why not? In a guest column for Billboard, David Isrealite of the National Music Publishers Association points out that if a livestream concert is—like a real-life concert—truly a one-time event and not archived or repurposed, then hosting platforms should be acquiring performance licenses from artists’ PROs (Performance Rights Organizations). If on the other hand the footage from the livestream is saved and synced with music for later use, platforms such as Facebook Live, Twitch and Zoom (and platforms alike) should be purchasing licenses to cover such syncs. 

That said, it’s not yet clear whether or not these platforms are following the established guidelines. A welcome exception comes thanks in part to producer Diplo, who began streamed themed DJ sets earlier this year. A press release stipulated that the artists he plays will be compensated for their music, and the archived sets, available on YouTube, will continue to generate royalties to rights holders moving forward. 

Global Support

For rights holders outside the US, there are some bright spots. North of the border, the Canadian PRO, SOCAN, has set aside a special fund to assist artists deprived of their usual performance royalties. The Encore! initiative compensates performers with a flat $150 CAD payment for concerts at least 30 minutes or 10 songs long, and viewed by at least 100 people. 

In the United Kingdom, the leading collection society, PRS, has prioritized getting their members paid for live streamed performances via a licensing deal with three of the major platforms: Facebook, Instagram, and YouTube.

As proud supporters of independent music makers, it’s our mission to help make sure you have access to all the resources—and all the royalties—you deserve. If you’re interested in live streaming, this recent article will introduce you to many of the major streaming platforms and their pros and cons.

Looking Ahead: Impact of COVID-19 on the Music Industry and Songwriters 

When will things go back to “normal”? At present we can’t predict an end date to the pandemic or when the music industry might resemble something we all recognize again. With that said, what impact do we think COVID-19 will have on the music industry? Here are a few observations:

  • Live concerts will likely go dark until at least mid to late 2021, but this really depends on the country/territory. That’s the best current guess as to when the majority of the population will either have had access to multiple doses of a safe and effective COVID-19 vaccine
  • Physical sales continue to go down, although this isn’t directly because of the pandemic. This corresponds not only with fewer shopping trips by consumers but a general decrease in discretionary spending. 
  • Streaming took an initial hit too, but has already rebounded. What’s more, is the way we stream has changed: With fewer visits to gyms and commutes to work, on-demand streams are shifting from music to video. “Every day looks like the weekend,” says Spotify, which also reports greater interest in relaxing, ambient genres.
  • Pre-existing trends will accelerate, notably that, third-party platforms that weren’t major players in shaping music consumption will continue to be important factors in the way we consume and discover new music. For example, Travis Scott’s virtual concert in the video game Fortnite generated nearly 46 million views by nearly 28 million users.
  • Songwriters: take note. As the industry goes more digital, another already existent trend will likely continue. As reported before the pandemic hit, songs are getting shorter and punchier so as to generate more plays, thus more royalties.

Overall, there are some significant changes happening in the music industry that we can all get behind. Mainly, the way we consume music, but also in how music creators view their work amongst an uncertain backdrop. We urge songwriters and artists alike to take time to think about the current climate, do research into how your fans/communities are interacting with your music, and set new goals that fit in this new virtual era. Even more so, we urge you to use this time to get your business in order, especially your music publishing. 

As always, we here at Songtrust are here to support you and your music. If you have any questions about resources for music creators or other ways to monetize your work, or to get your music publishing set up, reach out anytime.

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