How 10 Major Songwriters Make Big MoneyCalculating song royalties is a tricky business, but it's clear that these rights holders are raking it in
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The-Dream, the R&B singer and behind-the-scenes power player, recently boasted of a $15 million payday for writing Rihanna's 2007 smash "Umbrella." True? "When you have a cross-over song, it just makes more and more and more money," says Tom DeSavia, a vice president at Notable Music, a 50-year-old music publisher founded by the late songwriter Cy Coleman. "They just make shitloads of money from every source."
But our guess is The-Dream is exaggerating. Every time a track or record sells, all the songwriters receive a total of 9.1 cents in mechanical-royalty payments. (This can cause all kinds of crazy examples of "mailbox money." Famously, Curtis Stigers covered "(What's So Funny 'Bout) Peace, Love and Understanding" on Whitney Houston's 1992 The Bodyguard soundtrack. It has gone on to sell 17 million copies in the U.S., which means the songwriter, former British pub-rocker Nick Lowe, has received checks for roughly $1.547 million in his mailbox.) "Umbrella" has sold 4 million tracks and was included on 2.72 million sales of the Good Girl Gone Bad album, meaning all four songwriters (including rapper Jay-Z) shared $611,520, not counting worldwide sales.
Of course, there are a lot more ways for a songwriter to make money. If the song appears in a movie, TV show, videogame or commercial, the publisher or record label makes a deal and the writer gets a certain (usually large) amount in licensing royalties. And a massive hit like "Rolling in the Deep" or "Poker Face" can make as much as $500,000 per year just in radio royalties. Plus, songs create royalties when they're performed in concert – by anybody – as well as at awards shows or sports events. They also draw (small but growing) royalties from streaming online – Spotify, YouTube, Rhapsody and others. "Over a lifetime? Millions, if the song becomes a standard and hangs around for 20 or 30 years," says Seth Saltzman, a senior vice president for the American Society of Composers, Authors and Publishers, which makes sure its 400,000 members receive the royalties they're due. "Lots of different income streams that could happen."
Here's a run-down of how much 10 songwriters have made off recent blockbuster hits. The figures refer to mechanical royalties based on U.S. track and album sales as of January 2012, according to Nielsen SoundScan. Each movie and TV deal is different, so we have no idea how much extra money these songs made from licensing. Also, we can't say how the money is divided up among each songwriter and his or her publishing company – in a typical deal, a major publisher will take half of an inexperienced writer's total royalties, sources say.
By Steve Knopper