Music Royalties Deep Dive (Part 3): Royalties Flow for Independent Artists + How To Survive Spotify’s Royalty Policy Changes
I’ve kept you on the edge of your seats since the last blog… And finally, the long wait is over!
Topics to uncover:
How to survive Spotify’s royalty policy changes?
Royalties Flow for Independent Artists in 2024
How To Master Fan Relationships?
If you need a refresher on what we’ve covered so far, visit these links:
With Spotify’s new royalty model at the start of the year, independent artists, unfortunately, are the most affected.
“Starting in early 2024, tracks must have reached at least 1,000 streams in the previous 12 months in order to generate recorded royalties.”
Please read the complete information on the new policies here – Modernizing Our Royalty System to Drive an Additional $1 Billion toward Emerging and Professional Artists.
That said, how can independent artists survive Spotify’s royalty policy changes?
Invest in a quality label or distribution partner.
Free distribution sure is tempting. But what assures you that they can combat artificial streams? Do they help strategize distribution tactics with you? More often than not, the answer is NO. Do not risk your music for the sake of saving a few bucks! Remember, you and your team worked extremely hard to get your music out in the world… So why jeopardize all that time and effort?
Look no further, our partners at FreshNoise Distro got you!
Optimize your release strategy.
It sure is exciting to release all your music at once. However, this is not always the best strategy. If you’re releasing singles, it’s best to space them out 4-6 weeks apart. If you’re releasing a full album, it’s best to release 1-3 singles before releasing the full album (again, everything should be 4-6 weeks apart).
Releasing with this kind of timeline allows time to build momentum as listeners begin to discover your music. Once the momentum is built, that’s the time to push for the next release. Then, strategize again. Level up the game!
Use the “Waterfall Release Method”
Image Credit: iMusician
What is the “Waterfall Release Method”?
This is one of the most effective ways to build momentum for a new project while also increasing your chances of landing coveted editorial playlist spots. To put it simply, this is a trick to re-use the ISRC from your previously released song.
What are the benefits of a waterfall release strategy?
Build hype and momentum. Releasing singles over time creates anticipation for the full project and gives each song more time to gain traction.
Boost streams. With each new single, the previous tracks are also included, so their streams continue building. This helps all the songs gain more visibility on Spotify.
Increase chances of landing on editorial playlists. You get to pitch each new single to Spotify’s editors, giving you more shots at getting playlisted vs. dropping the whole album at once.
Engage fans over a longer period. Rather than dropping everything at once, you release bits of content to keep fans engaged for weeks or months leading up to the full release.
Avoid long gaps between releases. Releasing singles on a consistent schedule ensures you always have something new coming out, which Spotify’s algorithm favors. Long periods of inactivity can hurt your visibility.
How to do the waterfall release strategy with FreshNoise Distro?
Create a new release from your dashboard.
Track 1 of your new 2-track release will be your new song (upload as you usually do).
For track 2 of your new 2 track release, you are going to re-use the ISRC from your previously released song which should be available within your distributor (that’s us!). Or, use the Find Your ISRC Code tool from our Artist Resources page.
Once the release is delivered and has populated Spotify for Artists, we will use the newest song to pitch to editors for playlist consideration.
Try to keep your Spotify profile clean.
Be careful with the playlists you pitch your tracks to.
Playlisting plays a crucial role in the success of every music. Without this, it’s extremely hard to grow your presence on Spotify and get new ears listening to your music.. Let’s be honest, playlisting is challenging and costly – and notorious for scams. Fortunately for you,we have some TRUSTED and VETTED resources to help with this!
Communicate with your fanbase.
Strategize. Widen your audience reach. Relate to your fanbase. Perhaps, even build a mailing list – giving them first dibs on the pre-save, and letting them listen to a part of your upcoming release to make them want more; plus, every pre-save boosts your streams once your song is out!
Use multiple platforms to gain/grow your audience.
Grow your social media presence. Strategize your content. Be consistent. And again, relate to your fanbase. Doing so will pique and/or keep your audience’s interest and will ultimately trigger the algorithm, leading to listens and streams… furthermore, loyal fans!
Invest in advertising and PR.
Make a noise. Keep the buzz going. Use direct advertising – sounds heavy, indeed. But do you know that you don’t necessarily have to spend big bucks to advertise? You read it right, you can spend as little as a dollar per day on ads. The best deal here is that it particularly reaches your target audience, empowering you and your music with better impressions.
Regularly generate music reports.
Track your music data. Review analytic reports. Learn how to interpret, read, and analyze them. Nothing beats reliable data to help you and your team strategize your next move, which indicator needs improvement, which release is doing the most and least number of streams, what content is engaging the most, etc. Use your knowledge and the given data to hit your goal.
Royalties Flow For Independent Artists In 2024
Image source: Figma
As mentioned in our last blog, the royalties flow for independent artists is quite simple – if you, as an independent artist, funded and created the studio recording of your release, then you are the master rights holder, and you must get paid the royalties through your music distributor (yep, that’s us at FreshNoise Distro!)
On another note, if other creators are involved in the production of your music release, nonetheless, the below flowchart should help you better understand and visualize how royalties flow.
Major Record Labels
Image Source: Indie Music Academy
A particular range of royalty shares with a record label varies depending on the artist's level. Here’s a quick reference to give you an overview.
New Artist: 13-16%
Mid-level/ Emerging Artist: 15-18%
Renowned Artist: 18-20%
Never will you see a 50% cut from a major record deal. However, if you sign with an Indie Record Label, your cut could be as high as 50%.
Indie Record Label
Mechanical Royalties pass through a mechanical licensing or publishing administrator for independent labels, who takes 15-20% of your royalty earnings. The publishers then take another 50% on top of the latter before the earnings reflect on the composer’s deposit account.
Aggregators and Sound Recordings conversely take a percentage of every sale before the independent label gets paid. Lastly, the musicians get their pay cut.
Independent Musicians
Like most independent artists not signed with any record nor tied with indie labels, Digital Distribution Services like FreshNoise Distro are every independent artist’s partners. For a small fee, we digitally distribute and release your music across a variety of streaming platforms and music retailers.
“Do digital distributors take a cut from my music royalties?”
With all transparency, yes, we do. Digital distributors take around 10-15% royalty commission on every stream and/or sale – a much more favorable portion for you than the hefty cut of either a big record or an independent label. And since DDS’ only requires a small percentage of royalty commission, artists get a payout of roughly 85-100% of the music royalty, depending on which service you use.
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How To Master Fan Relationships?
Gone are the days when fans find it difficult to connect with their beloved artist. We are now in the digital age, where platforms evolve and algorithms shift. Thus, building an artist-fan relationship has become more crucial than ever, most especially for independent musicians. But why is it so important for artists and music marketers to build connections?
“Staying close to your audience is priceless. It’s like having a direct phone line amidst all the social media noise, creating a space where your fans feel valued.”
So how can you maintain this connection?
Build your foundation.
Redefine engagement strategies.
Consistent Content and Engagement
… And that, my friend, is for another blog. Come back next month for more indie talk and hacks to conquer the world of independent music!
Stay updated!
