Royal(tie)s make Lorde a millionaire
She's not yet 17, but with a No 1 single in the United States, North Shore singer Ella Yelich-O'Connor - better known as Lorde - is set to be a millionaire by year's end.
Her single Royals topped the Billboard Hot 100 charts last week, selling 293,000 copies, bringing accumulated sales to 2.7 million.
Songwriting royalties alone have already made her six-figures, with industry commentators saying it was only a matter of time before her earnings would make her a teenage millionaire.
"I'd be very surprised if she wasn't teetering at that status right now," music producer Simon Grigg said of Lorde becoming a millionaire.
Grigg's Huh! label released OMC's How Bizarre - a song that topped American radio charts in 1996 - and he said singer Pauly Fuemana, who shared writing credit on the song, earned $5m from the tune in royalties before his death in 2005.
Fuemana's estate still receives annual royalties of around $50,000 from the song playing on radio or in television shows. Grigg said Royals seemed to be enjoying a similar level of success to "How Bizarre" and predicted similar royalty flows.
Lorde's success in the United States, where she is presently touring and unavailable for comment, is hard to overstate.
In the New Zealand charts Royals spent three weeks at No 1 before eventually reaching platinum status, signifying 15,000 sales. Based on last weeks' figures, the New Zealand sales of Royals - reached over a period of four months - are being matched every eight hours in the US.
There, royalties of US9.1c are paid to songwriters per single or album sale. The credits for Royals are split between Lorde, who wrote the lyrics and melodies, and producer Joel Little who provided the beat and vocal hooks.
Fairfax Media understands Little - a journeyman musician before turning his hand to production - had previously sold half of his publishing rights to EMI, later taken over by Sony/ATV music publishing. Little did not return calls.
Based just on sales of the single in the United States to date, the pair's share of royalties is worth $296,069.
Despite Little's sale, Grigg said these credits would be financially life-changing for the pair. "They're set for life now, and that's great - sometimes the little guys do win."
Publishing royalties are also due when songs are played by radio stations, and Royal presently sits fourth on the most-played charts.
APRA's director of New Zealand operations Anthony Healey said success in the US, which dominates the global music market, was the ultimate goal of musicians. "It is the holy grail, and given that no one has, in fact, ever cracked it like this before, she's done something really remarkable," he said.
Healey said despite Lorde being the youngest chart-topper in history, the most remarkable fact was that she had retained ownership of her publishing rights.
"Therein lies the extraordinary situation that Ella finds herself in - there wouldn't have been an unpublished number one hit for many, many years."
Healey said this rare, unattached status would spark a bidding war by major labels wanting to secure rights to her music, and could only end well for Lorde.
The division of other income from the music business - typically income earned from single and record sales - relies on notoriously murky recording contracts. Lorde's label, Universal NZ, which represents her internationally, was unwilling to comment on its deal. It said discussing contracts would "open up a can of worms that simply cannot be opened".
Tim Riley, of entertainment practice Dominion Law, said a 80:20 split between label and artists for recorded music income was typical, with the artists' management, in this case Scott Mclachlan, generally taking a one-fifth share.
Taking this as a model, sales of Royals in the US to date will have generated total income of $4.2 million.
After taking out the aforementioned songwriting royalties and Apple's 30 per cent cut for iTunes sales, the rest would be split between Universal ($2.2m), Lorde ($436,906), and Mclachlan ($109,227).
Riley said the kicker to this split for the artist was that proceeds were typically first used to repay a non-recourse loan (not personally guaranteed) granted by the record company to finance their development and recording costs.
"A good example is OMC, who ended up owing his record company a million bucks, because the reality is that every cent the record company spends needs to be recovered," Riley said.
Sales of the songs' rights for use in advertisements would be a lucrative move, but Lorde recently told Metro magazine she was rebuffing such offers.
Additional revenue from selling advertising alongside her YouTube videos, which have racked up more than 48 million views, and fees from licensing her songs to internet streaming services, are expected to be relatively small.
The analysis has focused on Lorde's debut single and didn't factor sales of the song elsewhere in the world, potential earnings from sales of her new album Pure Heroine, or touring income.
Music commentator Russell Brown said the artist was well-positioned to avoid the problems of Fuemana, who despite earning a river of cash from How Bizarre, died young and relatively penniless.
"It's a completely different situation. The business here is being handled a lot better - according to that Metro article her money's going into a trust where sensible adults are not spending it," he said.
Additional reporting Laura Walters
- Fairfax Media