Here’s what you need to know about music royalties. Music copyrights and royalties are two of the most complex issues in the music business.
WHAT ARE MUSIC ROYALTIES?
Recording artists, composers, songwriters, publishers, and other owners of copyrights receive royalties as compensation for the use of their intellectual property. This exclusive right to their work is granted by the United States copyright laws.
As well as licensing and usage, music royalties are generated. Music royalties fall into four categories: mechanical, public performance, synchronization, and print music.
Musicians are paid through royalty payments as their primary source of income. These agreements are outlined in contracts between the creator and the distributor.
WHAT ARE THE TYPES OF MUSIC ROYALTIES?
Royalties on music come in four different forms. Copyright is also assigned to each of the four classes. Musicians earn royalties in four different ways:
Copyrighted works may be reproduced and distributed physically or digitally by mechanical royalties. Music downloads, CDs, cassettes, vinyl, and streaming services all fall under this category.
When record labels press a CD of a songwriter’s music, they pay mechanical royalties to them. Alternatively, a copyright owner who is an independent distributor can collect mechanical royalties from a distributed digital music service.
2. PUBLIC PERFORMANCE ROYALTIES
Copyrighted performing, recording, playing, or streaming works generate music royalties. The term “public” means any place where you can hear your music, including radio, television, bars, restaurants, clubs, live concerts, streaming services, and any other location.
Performance royalties are collected by Performance Rights Organizations (PROs). A PRO organization like ASCAP, BMI, or SESAC negotiates and monitors licensing for performances. A PRO organization contains and distributes rights holder royalties.
A Performance Rights Organization must be contacted before you can collect public performance royalties. These royalties are split 50/50 between the songwriter and publisher. For 100% performance royalties, you need to register both as a writer and a publisher.
3. SYNCHRONIZATION ROYALTIES (SYNC)
Synchronization royalties are generated when copyrighted music is paired with visual media. Synchronization licenses have been issued to license copyrighted music for film, television, commercials, video games, online streaming, advertising, music videos, and other visual media.
As different as synchronization is from audio and video media, for example, YouTube videos are not covered by synchronization licenses. Before using copyrighted music with a new audiovisual project, a licensee will need a master use license.
A master use license and a sync license are required to use protected music in an audiovisual project. No matter how long or how short the sample is, it is welcome. It is necessary to have a master and sync agreement to sync YouTube wakeboarding videos with Jauz tracks.
4. PRINT MUSIC ROYALTIES
In general, copyright holders receive the least amount of payments via print royalties. Sheetmusic, for example, must be transcribed into a print piece and then distributed.
In addition, each copyright holder is responsible for paying those fees according to the number of copies sold.
Royalties are generated by using different music copyrights. The music industry and technology are evolving in such a way that new royalty streams emerge. While providing protection, they also generate revenue for musicians.
The complexity of royalties can make learning to navigate them seem overwhelming. You should now feel more confident about entering the music business after reading this guide.