How to earn money with virtual concerts

When it comes to sampling many people may only think of rap music from the 90s with samples from dusty jazz records. But sampling today is perhaps more popular and widespread than ever, largely due to many new possibilities. An analysis of Tracklib shows that in 2019 15% of all songs in the top 100 of the Billboard charts and even 59% of all top 100 albums contained samples.

This is by no means limited to HipHop, but is also frequently used in R&B, Latin, Pop, Dance or even Rock music. Of the top producers in 2019, 83% said they had used samples during their career.

The art of sampling is widely used, but at the same time you can read that artists have been sued, albums have postponed or songs have not been released due to problems with sample clearing. We explain to you how it works.

Popular myths about sampling

There are numerous rumors around the topic, most of which are however simply wrong.

Sampling is allowed up to a certain length

Wrong: There are many incorrect reports that you may sample e.g. six seconds or 4 bars. There is no such regulation and the length of the sample is not relevant.

If I change the sample, I can use it

Wrong: Whether you use a loop, chop the sample, change the pitch or whatever, it still remains someone else’s intellectual property. Of course, you can argue about whether you really want to give money away when the original is no longer recognizable at all. But do you really want to go to court for that?

If I replay the sample, it is not a legal problem

Half-true: You actually only need one of two permissions. More on this a bit later.

How to clear samples

To be really on the safe side, you need two permissions:

• Master Rights (usually from a label)
• Rights to the composition (publisher or artist himself)

On the one hand you need the approval of those who have the master rights to a song, which in many cases is a label. On the other hand, the authors, i.e. lyricists and composers, must also agree that you use their work. These rights are often held by a publisher or otherwise directly by the artist. Unlike the cover of a song, the rights holders can forbid you to use a sample at any time.

The first step is to find out who actually owns the rights to the song you want to use. It is therefore very important that you write down which samples you used in a song, otherwise things will get even more complicated. If you buy beats on the internet, make sure you check with the producer whether he has used samples and if so, whether they have been cleared. If not, this can come back to you.

Who owns the master rights is usually relatively easy to find out, since it is usually the label that releases the song. In many cases this can be determined with a simple Google search.

It is a little more complicated to find out who worked on the composition and the lyrics and who represents them. If you are dealing with releases from the US, the databases of ASCAP or BMI are recommended. Apart from that there is nothing else but a lot of research.

If all of this is too complicated for you, you can also hire a company that specializes in sample clearing. But of course they will demand their share and it won’t be cheap in general.

What are the costs of Sample Clearing?

As soon as all the rights holders have been found, the negotiations begin. At least if one receives an answer to the inquiry at all, which is apparently not always the case with independent artists. Provided they like your song and give you the permission to release it, it will cost you something.

How much depends of course on various factors like the artists’ popularity.

A fixed advance payment is usually required both on the master side and from the composers. According to various reports, this is often between 2,000 and 10,000 dollars each. In addition, for the master rights one gives away about 3-10% of the income of the song. Even more usually goes to the composers, but it should not be more than 50%. If you cannot afford such a high advance payment, you can negotiate a higher participation. Of course it would also be possible to try to settle everything with an advance payment, but especially for independent artists this might be a big risk.

As you can see, it is complex and in many cases expensive to clear samples. The more obscure the sample source is, the more difficult it is to find the rights holders. And the better known the sampled artist, the more expensive it gets.

Let’s get back to the topic of replaying samples: In this case you don’t need the master rights, because you are not using the existing song to which the label has the rights. But you still need the permission of the composers, because you have used their intellectual property by playing their melody.

Does anyone really notice if I do not clear the song?

If you don’t clear the sample and your song only has a few thousand streams, it is almost certain that no one will notice. However, this can change very quickly if your song goes through the roof. Then the tactic of “just checking to see if I get caught” is anything but recommended. If the rights holders still want to negotiate, you are certainly in a worse negotiating position and will have to give up a lot of percentages. In the worst case, a lawsuit may even be filed and this can be expensive. Furthermore, your distributor is obliged to remove the release from the stores if you have used uncleared samples.

If you want to be on the safe side, it is worthwhile to get the rights to the samples. By the way, we are not only talking about music, this also applies to samples from movies, games etc..

How do I get legal samples without much effort and expense?

Of course the problem was identified already and there are several sites where you can easily get samples.

Tracklib: The site gives you the opportunity to sample a wide range of original songs and to clear them at fair conditions and above all with little effort. You also pay a monthly subscription fee. Many famous artists like J. Cole, Lil Wayne, DJ Khaled, Brockhampton or Mary J. Blige already used the service.

Splice: No original songs but royalty free samples, partly from world famous producers, are available at Splice. According to their own promotion they have millions of sounds from drums to vocals or different instruments. You pay a monthly amount as well.

There are also several other sites where you can download so-called Sample Packs or Royalty Free Samples. It is recommended to always study the conditions carefully, as these may not always be used for all purposes and unfortunately there are many less serious providers on the market.

Conclusion

Legally speaking, the situation is clear, a sample, no matter how short or alienated it is, must always be cleared. In reality it is an enormous effort and also a cost factor, especially for smaller independent artists. Often you are faced with the decision whether to take the risk or to work without the sample, even though the sample might be the element that makes your song a hit. In addition, it is certainly worthwhile to try out the numerous new alternatives.

Recently Kanye West criticized the mechanisms of the music industry with several tweets. Using iGroove as an example, we will show you that many of these requirements are already met when working with an independent distributor.

With iGroove, you always keep the music rights, and you have the option to switch to another distributor at any time. There is no contractual obligation. You will not only receive 80% but 92% of the revenues.

Limited terms only exist for advance payments. The duration can be chosen by yourself and thanks to our ‘best deal guarantee’, you can switch immediately in case you find a better deal somewhere else.

Even better: no contracts at all. At iGroove, you only need to accept the terms and conditions and – being musicians ourselves – you will understand them easily (no lawyers needed). All costs are transparent, and you only pay for what you need.

There is no exclusivity. This means at iGroove you can release some of your songs with us, but you can also release others through other distributors. You choose.

iGroove is a Spotify Gold Partner and does not have any side deals with Spotify. Neither do we have any middlemen involved. All revenues that are distributed to us by the DSPs get immediately passed on to the artists.

Thanks to our sales trends and statements you always keep track of your income. You can see how much you earn per song, at which store and in which countries etc. With our app, you can check these figures any time while on the road. Further, you can see your estimated streaming revenues for the next 6, 12 and 14 months.

In your iGroove account, you have everything in one place. From all your releases to statistics, payouts and services. If you took an advance payment, the contracts are stored there as well. All this information can be downloaded at any time.

The difference between a loan versus an advance payment from iGroove is that a loan must always be fully repaid. However, with an advance payment, iGroove takes on the risk that the amount cannot be recouped. The conditions (duration & share iGroove) can be set by yourself and range from 1 to 3 years and 14% to 18%. Further you can select for which releases you want the advance (some backlog releases or a certain number of future releases). Again, you choose.  All costs and margins for covering the risk that the advance does not recoup are calculated by iGroove’s AI and are completely transparent for you.

Kanye’s manager adds: “When you hear the stories of a musician who hasn’t paid his or her taxes or has gone broke, it’s because it takes so long to get your money. Some creators only get paid once every six months.“

With iGroove, you get a monthly credit, and you can pay this money out at any time. The billing transparently lists how much you have received from each store and shows the exact number of streams and downloads.

Learn more about the benefits of iGroove.

At some point in your career as a musician you’ll have to make important financial decisions. For these career changing steps, you need as much reliable information as possible. If it is missing, there is for instance the risk that you make a wrong deal which will bind you for a long time.

This is where ’Muse‘ comes into play. ’Muse‘ is an Artificial Intelligence created by iGroove that calculates the future streaming revenues of your releases.

Dennis Hausammann, CEO and Co-Founder of iGroove, explains:

“Originally, we developed ‘Muse’ to calculate the the highest possible advances that we can pay out to artists. It was only later that we realized how valuable this information is for the artists in itself. Therefore, we decided to make it freely available to them. Now every musician can see how much money he/she is likely to earn through music streaming in the next few years. This gives the artists more financial security and enables them to make better decisions. I think this is the most revolutionary thing iGroove has created so far”.

Analysis report for future streaming revenues

Here you can request a detailed analysis report, which lists your future streaming revenues.

The analysis is divided into three parts:

Backlog: Here you can see how much you’ll earn with your already released music in the future.

Future releases: Since the streaming income of upcoming songs can vary a lot, there must be at least five singles and an album with at least 12 songs including 5 singles to make a reliable forecast.

Forecast per release: In the third section you’ll receive a separate, detailed forecast for each of your older releases.

In all three sections you can see how much you’ll earn with your music in the next 6, 12 and 24 months.

Similar to the calculation of the advance, anyone can have this analysis sent to them. Even if you are not an iGroove customer. For non iGroove customers we only need temporary access to the Spotify for Artists profile to have enough data for the calculation.

How you benefit as a musician

The calculation of future streaming revenues is unique in the music industry and it helps artists with important career decisions.

Understanding the financial situation: As a musician, you probably prefer to be in the studio rather than working with Excel spreadsheets on your computer. As long as the money comes in, a musician doesn’t constantly calculate and reevaluate his/her financial situation. Thanks to our analysis, this is no longer necessary: without having to make calculations, you get a reliable forecast of your future streaming income and can assess your situation.

Planning security: Knowing how much you’ll earn with your music in the next six, twelve or even in the next 48 months gives security and simplifies the financial planning of the next steps.

Basis for decision-making: Concrete and reliable figures are enormously helpful in making important decisions. For example, if you are unsure whether you want to rely entirely on your income from music revenues, the forecast can help you make this decision. You can also see how much is still missing and how much you need to generate in other fields (concerts, merchandise, etc.).

Negotiation basis: The knowledge of future streaming revenues helps in negotiations with labels and distributors or in deciding whether an advance is actually needed.

Why does iGroove provide these numbers free of charge?

iGroove was founded with the purpose to help as many musicians as possible to increase their income so that they can live from their art. Thanks to the forecasts, we now know if this goal has already been reached or how much is still missing.

Another cornerstone of iGroove’s philosophy is transparency. We are doing well when our artists are doing well. That’s why we only want to offer services that are effective. You can only decide which services currently make sense to you if  you know your financial situation. Disclosing your predicted future streaming revenues to you should help you to make better decisions for your career.

What’s next?

As a further development of the analysis report, iGroove will release an app where you can check the forecasts for your releases at any given time. The future streaming revenues of your releases will be recalculated every night on the latest trend data. Additionally, we’ll offer you a preview of your next payouts. Since the stores have different payment schedules, it’s sometimes difficult to predict which part of the sales trends will be paid out when.

In a first step the app will be available for iGroove customers only, in a later version it will be available for everyone.

Do you have any questions about our analysis report?

Contact our support at support@igroovemusic.com or write us in the chat.

After we recently analyzed how much you earn per stream on Spotify, we’ve now looked at its biggest competitor: Apple Music.

Once again, we have collected a large amount of data based on the streaming numbers of the iGroove customers. Similar to Spotify there’s not a single amount per stream but various. The difference between the different countries are big although the gap is not as wide as on Spotify.

What causes the fluctuations in streaming payouts?

A big difference between the two giants is certainly that Apple Music doesn’t offer a free service. Exceptions are free trial months and special offers. With these, the PPS (Pay Per Stream) is much lower than with regular subscriptions and sometimes there’s no payout to the artists at all. If these trial months and offers were excluded, the PPS at Apple Music would be even higher.

At Apple Music, the differences are mainly due to the cost of the subscription. While in Turkey you can listen to Apple Music for the equivalent of 1.90 USD for one month, in Denmark you pay almost 16 USD.

In addition, the PPS differs enormously among the various subscription types. Streams from a normal subscription in Germany generate 9,780 USD per million streams. With a family subscription it’s only 5,025 USD. As mentioned, the payments are even lower in the test months or for special promotions.

Since fewer factors influence the PPS at Apple Music, the differences between countries are not quite as massive. The front-runner Norway surpasses the other countries by a maximum of six times, with the exceptions of Nigeria, Kazakhstan, India and Russia.

Let’s compare the 20 most important music markets according to IFPI (South Korea, Brazil and Argentina are missing on the list). You can already see the massive differences between the countries. While in India you get 2,303 USD for one million streams, in Norway, Denmark and Sweden it’s more than 12,000 USD. In the 17 most important music markets, one receives an average of 8,924 USD for one million streams.

The major music markets in comparison

How much does Apple Music pay per stream?

Like Spotify, Apple Music keeps 30% of the revenues for itself and pays out a share of the remaining 70% to the authors. The remaining amount goes to the rights holders via label or distribution.

Apple Music pays the artists according to a so-called pro-rata system. This means that all generated revenues are put into one pot (or into many pots depending on the country and subscription model) and then divided on a percentage basis according to the streams generated. If Apple Music has made 100 million in one month and you have generated 1% of all streams, you will get 1 million.

Assuming that one would have the same number of streams in each of the 50 countries evaluated, one would receive 6,872 USD for one million streams. This is just a little less of the amount Apple Music pays for streams from Germany (7,002 USD). As with Spotify, there are significant differences between the English-speaking countries: In the UK you get over 11,500 USD for one million streams, in New Zealand 9,239, in Australia 8,259, in Canada 5,438 and in the USA 7,640. Which means that you get 1,5 times as much in the UK than in the US.

In terms of PPS and population size the most interesting markets are the UK, Germany, France, Japan, Australia and the USA. Unlike Spotify, Italy, Portugal and Spain are also very interesting. One should also not despise the Benelux countries, Switzerland, Austria and especially the Scandinavian countries, which top the list.

Apple Music vs. Spotify

It is no secret that Apple Music pays significantly more per stream than its Swedish competitor. Thanks to our evaluation you can now see how big the difference really is.

Calculated on average for all countries, Apple Music pays 2.88 times as much per stream as Spotify. While the factor in the home market USA is 2.16, it’s almost 5 in southern European countries such as Greece. In Portugal even at an incredible 5.77.

In the list below you can see how much you get for one million streams in 50 different countries. You can also compare the numbers from Apple Music directly with those from Spotify. The factor shows how much more you get per stream at Apple Music. Finally, you can see how much the subscription costs for the two stores in the respective country.

Legend: For streams from Germany you get 7,002 USD for one million streams at Apple Music and 3,367 USD at Spotify. Per stream you get 2,08 times as much at Apple Music. If an artist generates practically only streams from Germany, he needs about 1.18 million Spotify streams to earn 4,000 USD per month, while 571,000 streams are already sufficient for Apple Music. 

For the consumer it hardly matters which service he chooses, as the subscription prices are roughly identical. As a musician, however, you benefit much more from Apple Music.

Streaming payout per country

In the past, it was quite easy to calculate how much you earn from a sale. It was pretty clear how much you get per sold CD or vinyl record you sold and also with the downloads it was predictable what you earn per song. But in the streaming age the whole story has become much more complicated. Even though there are various figures on the web about how much Spotify pays per stream, there is no such thing as one fixed amount.

Therefore it’ s not surprising that we receive many questions from artists, why there are fluctuations in their streaming revenues. We have collected and analyzed a huge amount of data to give you a detailed insight into how Spotify pays you. Important: we only analyzed the numbers of Spotify. The other streaming providers work with different calculation models.

As mentioned, there is not one single amount Spotify pays per stream, but countless different ones. This depends on many factors, but mainly on which country the stream comes from and whether the listener has a free or premium subscription.

If we compare 18 of the world’s 20 most important music markets according to IFPI (China and South Korea are not on the list because Spotify is not available there), we see that the values vary enormously. The payout for one million streams ranges from 850 USD in Argentina to 5,479 USD in Norway. On average, you get 3,222 USD for one million streams in the 18 most important music markets.

What causes the fluctuations in streaming payouts?

One of the most important factors is the subscription price. In India, for example, a Spotify Premium subscription costs only a fraction of what you pay in Denmark. While a premium subscription in Denmark costs the equivalent of 15.65 USD, a premium user in India only has to pay 1.60 USD per month.

Also, the advertising revenues vary between markets and of course they also vary from month to month in each individual market. At the same time, the number of premium subscriptions and the number of streams generated by the listeners changes every month. In short, the numbers are in constant change and so is the payout to the artists.

This means that it doesn’t only depend on the changes in your personal streaming numbers, but also how the “market” changes in general. If the number of your streams decreases but also the total number of all streams drops equally, you still earn the same amount. Overstated, you earn the same amount for 5,000 streams at a PPS (Pay Per Stream) of 0.001 as for a single stream at a PPS of 5 USD. It’ also possible that you generate more streams, but the PPS decreases and you still don’t earn more.

Here are the most important factors that influence how much you get per stream:

• Subscription price
• Subscription type (Free / Paid)
• Origin of the stream (country)
• Advertising revenue generated in the respective market
• Number of subscriptions
• Number of streams generated per month

How much does Spotify pay per stream?

Spotify keeps 30% of all revenues generated. Of the remaining 70%, a part is paid for the songwriters and composers and the rest goes via label or distribution to the rights holders of the song.

From the remaining share it’s calculated how many streams there were in total and how high the share of each artist is. Assuming there were one million streams per month and you have achieved 1,000 streams, you will receive 0.01%.

So far, so good. But it’ s not that there is only one cake, there are dozens of them. So there’s one cake for every market, every subscription level, and so on. This is where the (big) differences start.

We have analyzed our extensive data material and calculated how much you earn per stream in the different countries where Spotify is available. Not yet included are the Balkans, as Spotify was only recently launched there.

In the table (at the bottom of the blog) you can see for 79 different countries how much is paid per stream and extrapolated to one million streams. As already mentioned, there can always be fluctuations, but these figures give you a good guideline.

You can see, for example, that for one million streams in Iceland you get almost nine times what is paid for the same number of streams in Morocco, Tunisia or Algeria. Assuming you had the same number of streams in each of the 79 countries, this would give you a PPS of 0.00203111. So for one million streams you would get 2,389.58 USD, which is about the same as in Uruguay or Spain. Many European countries such as Italy, Greece, Portugal, the Czech Republic, Hungary or Poland are below this average, in some cases even significantly.

But even in the English-speaking countries the figures vary considerably. While you get 4,912 USD per million streams in the UK or even 4,977 USD in New Zealand, the figure is 3,964 USD in Australia, only about 3,525 USD in the USA and even only 2,738 USD in Canada.

Summary

The evaluation clearly shows that it’ s not only important how many streams you generate, but also in which countries. For example, Iceland is by far the country with the best payoff, but with its less than 400,000 inhabitants the island state is still only moderately interesting. Countries with a large population like India or Mexico are of course attractive because of their size, but you have to generate multiple times as many streams as for example in the UK. If you consider not only the payout per stream but also the number of inhabitants, the most interesting markets are the UK, Australia, Japan, USA, Germany and France. This is no surprise, but our analysis also shows that the Scandinavian markets should not be forgotten and countries such as the Netherlands, New Zealand, Switzerland and Austria should not be ignored. On the other hand, if you have your core audience in Turkey, the North African states or even the Latin American countries, you have to make a double or triple effort.

Streaming payout per country

Advances have always been an integral part of the music business. When you think of this topic you usually consider advances for future releases. However, it is also possible to make money from your old releases – the so-called backlog. Thanks to iGroove’s world’s first artificial intelligence-based advance calculator , you’ll know the value of your backlog in a flash.

Why is the market value of my old releases interesting?

There are several reasons for it.

• Are you currently in negotiations with a label, distribution or management? Thanks to our calculation, you can present them with concrete figures and thus put yourself in a better negotiating position, especially if you are negotiating a deal that includes the backlog.
• Find out if the deals you made in the past were fair or if you need to negotiate better in the future.
• If you’re interested in joining iGroove or are an existing customer, you can quickly and easily request an advance payment.

How do I find out the market value of my releases?

You fill out this form (this is also possible if you are not an iGroove customer) and then our servers start calculating. Within 24 hours you will receive a detailed evaluation and a non-binding advance offer. The minimum amount for an advance is currently 2.000 Euro.

Can I freely choose the duration and commission?

Yes, you can change the offer as you like. Depending on your wishes, you can choose a term between one and five years. In addition, there is a range between 14 – 25% for the commission. Depending on the settings of the two sliders, the calculated advance amount will also change automatically, so you can find the ideal offer for you.

Once you have found the perfect offer, you can either print it out to start negotiations or have iGroove pay out the amount directly.

How long does it take to receive my advance payment?

As with the calculation of the advance, it’s important to us that everything is done as simply, transparently and without a lot of paperwork as possible. As soon as you have accepted the offer, a contract will be drawn up and digitally signed (legally binding). This saves a lot of time. If you’re not an iGroove customer yet, all you have to do is transfer your releases to iGroove and you’ll have the money on your account.

How do I transfer my releases to iGroove?

On the one hand, you need to request a takedown of your releases from your previous distributor, on the other hand, the releases need to be re-entered into the iGroove system. The most important thing is that you capture the same ISRC as you did with your old distributor. This also guarantees that all your streams and playlist placements are preserved. You can find more information here.  

By the way, the one-time release fees for your releases are on the house. So your release will be delivered to the shops for free and will stay there as long as you want it without any recurring costs.

Where can I see how much of the advance I have already recouped?

In your iGroove account, your advance contract is stored and you can always see how much of the advance has already been recouped. Every month you can see the latest payback based on your sales and you can see exactly how much you have recouped with which release. So you always have an overview of the outstanding amount. As soon as the advance payment has been recouped in full, you will receive your entire income paid out again minus the agreed commission. For example, if you set the commission to 20%, you will receive 80% of your earnings from now on.

If the advance is not fully recouped, iGroove bears the economic risk. Open amounts do not have to be paid by the artist.

Try the advance calculator now

Take a look at the interactive example of an offer now and request your non-binding advance offer yourself here.

Do you have any questions about our market value calculator or the advances?

Then contact our support at support@igroovemusic.com or write us in the chat.