How Does the Musician Get Paid?

Generally speaking, musicians have three sources of income from a record deal:

1) Advances

2) Royalties

3) Publishing income

Advances are usually paid in a lump sum, either upon signing or upon completion of the recording or both.

Royalty payments are paid as a percentage (or points) based on sales of the album. Royalty calculations are quite complex. They work differently in indie and major deals, and virtually every record company has a different way of calculating how much the artist is to be paid.

Publishing income is for songwriters, usually a percentage based on the use of your song by others. This includes when you perform your own material on an album (here, the record company is using your song).

You need to examine your contract carefully to make sure you understand how you will be paid – before you sign!