How does Songtradr make money?

  • Songtradr is an automated music licensing marketplace founded in 2014 by Paul Wiltshire. Music on the platform is licensed by companies for use in advertisements, movies, social media, and television content
  • Songtradr makes money by taking a commission from distribution royalties and sync revenue, with the latter experiencing growth due to increased demand for music from amateur filmmakers on YouTube. 
  • Songtradr offers three subscription plans with various perks and commission structures. The company takes a commission from distribution royalties and sync revenue for users on the free plan. However, these commissions are reduced or even removed for users on plans with an annual fee.

Origin story

Songtradr is an automated music licensing marketplace founded in 2014 by Paul Wiltshire. Music on the platform is licensed by companies for use in advertisements, movies, social media, and television content.

Before the idea for Songtradr was conceived, Wiltshire lived in Australia and enjoyed a successful career as a songwriter and producer for major acts such as the Backstreet Boys.

However, Wiltshire was also a musician himself and was frustrated that he wasn’t allowed to license much of his catalog after signing exclusive deals with publishing companies.

What’s more, his location in Australia made it problematic to develop good relationships with music supervisors based in Hollywood, California. 

Wiltshire then moved from Australia to Southern California and launched Songtradr thereafter.

The platform was designed to give musicians and rights holders an easy way to license music on their own terms and not be handicapped by their location or industry contacts.

Potential companies can browse Songtradr’s extensive catalog and listen to individual songs before cutting a deal with the musician directly. Importantly, the deal is non-exclusive, which means the musician is free to enter into arrangements with other publishers.

Songtradr is now the largest B2B music licensing marketplace with over 500,000 artists around the world. Revenue is projected to grow to $50.3 million by the end of 2021 with the company also planning to hold an IPO on the Australian Stock Exchange (ASX) at some time in 2022.

Songtradr revenue generation

Songtradr makes money by taking a commission from distribution royalties, which are earned when music is sold or streamed.

In some cases, the company also collects a commission on sync revenue, which describes music that is synchronized or paired with visual media such as movies and television shows.

In an interview with the Los Angeles Times, Wiltshire noted that so-called “micro-sync” revenue was the fastest-growing segment for Songtradr in terms of volume.

This volume is due to increased demand from amateur filmmakers on YouTube who require unique music for their video content.

Let’s now take a look at the subscription plans and their respective commission structures.

Subscription plans

The commission varies according to three plans that are offered to the music artist:

  1. Starter ($0/year) – with no hidden fees, intuitive payment splitting, custom artwork editor, and basic analytics and trend reporting. Songtradr collects a 40% commission on sync revenue and a 10% commission on distribution royalties.
  2. Lite ($19/year) – for musicians who want to remain free users but who wish to distribute their music through the Songtradr platform. In this case, the company collects a 40% commission on sync revenue but does not collect a commission on distribution royalties.
  3. Pro ($49/year or $5/month) – with all Lite features and unlimited distribution for up to 100 artists per account. Pro plan musicians are only charged a 20% commission on their sync revenue.

Read Next: Spotify Business Model

Related Business Model Case Studies

Spotify Business Model

Spotify is a two-sided marketplace where artists and music fans engage. Spotify has a free ad-supported service and a paid membership. Founded in 2008 with the belief that music should be universally accessible, it generated €9.66 billion in 2021. Of these revenues, 87.5% or €8.46 billion came from premium memberships, while over 12.5% or €1.2 billion came from ad-supported members.

Economics of Spotify Business Model

Spotify licensing deals affect its business model. The company runs on both a free service, which is ad-supported, and a subscription premium service. They have different economics. The ad-supported business had a 10% gross margin in 2021, compared to 29% of the subscription-based business. That’s because the more the content gets streamed on the platform, the more that increases royalty costs for Spotify. That is also why the company invested in developing its content. Thus, in part transitioning from platform to brand.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on cultural communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

YouTube Business Model

YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, generating more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.

TikTok Business Model

TikTok is a creative Chinese social media platform driven by short-form video content enabling users to interact and generate content at scale. TikTok primarily makes money through advertising, generating $4.6 billion in advertising revenues in 2021, thus making it among the most popular attention-based business models or attention merchants.

Twitch Business Model

Twitch started in 2007 as, broadcasting the life of Justin Kan, one of its co-founders, used to prove the concept of enabling anyone to broadcast their lives on the web. Once pivoted, Twitch quickly grew, and by 2014 it was acquired by Amazon for almost a billion dollars. Titch now makes money via subscriptions, bits, advertising, and merchandising.

Discord Business Model

Discord makes money in several ways, from its Discord Store, where users can buy premium games, to the seller shops, which primarily work with a 90/10 revenue share for developers and game sellers. And sellers can get more visibility on the platform by adding features to the game visibility.

Main Free Guides:

About The Author

Scroll to Top