Understanding the intricacies of royalties in music can be challenging. Such as the many sources from which royalties are earned. As well as the methods of collecting them. Royalty law works differ between countries, as well as the many people and companies engaged in music production.
This article sets out very simply how royalties in music work. It also gives you valuable advice on how to get royalties for your music, increasing your income! Keep reading for everything you need to know!
We can define royalties in music as the fees paid to rights holders for each use of their music.
Royalties make up a significant slice of the music industry, as a kind of passive income. Learning how to earn money from the usage of your copyrighted music can significantly increase your earnings.
Sometimes you can get fees instead of/on top of royalties, however. You can read more about that in our article about Music Licensing Fees.
To earn everything possible from your music, you need to know how to collect music royalties and what all the different types are. That’s where this article comes in!
To start understanding how royalties in music work, you should know a few things about music rights.
First, stop thinking about your song as a single deal. Your song exists in at least two forms. The first being as a composition (a musical work with or without lyrics). The other being as a sound recording (also known as a master recording).
Therefore, music copyright is split into two main sections.
One of which being Publishing Rights, which belong to the owners of the music composition. The second is Master Rights, which belongs to the owners of the master recording.
Cover songs provide a simple example of how this works.
Let’s say Artist B records a cover of Artist A’s composition. Artist B only owns the rights to his own recorded version of the composition and gets paid royalties for his master rights only.
But, Artist A still owns the composition and earns royalties because Artist B recorded a cover version of Artist A’s song.
This is a simplified example just to give you an idea! But you might also need to consider the role of the performers, session musicians and publishers. As well as any rights holders who are engaged in the work.
For additional information, check out our guide on Music Rights!
Royalties in music are divided into several different types, often paid out in different ways. Here are a bit more about them.
Neighboring Rights Royalties apply to master recordings performed or broadcast in public.
Simply put, they are similar to public performance royalties. But apply to ownership of a recording and the performers/instrumentalists on a recording.
For more information, check out our article on Neighbouring Rights!
Print Music Royalties apply to copyrighted music transcribed to a print piece. Such as sheet music. They are then distributed through a print music publisher.
These royalties are generated when a printed piece is created. Based on the number of copies made.
Unless you have basic knowledge on who pays royalties for music and how each type is collected, getting royalties for music can be tough going.
But don’t worry, here comes an easy explanation!
If you are thinking about streaming music, it could be a little tricky trying to calculate your prospective music royalties by yourself. This is due to the multitude of factors involved. Such as music publishing royalty rates.
Performance rates are negotiated each year between Performance Rights Organizations (PROs) and the music service providers. While Mechanical Rates, unless otherwise negotiated, are determined by statute.
Given this, a music streaming royalties calculator is definitively the best choice. You can try this out with our very own Royalty Calculator! Just insert an estimated number of streams and, in less than a second, you will have an idea of your streaming income!
After the calculations, you’ll need to know how to collect the royalties.
Fortunately, there are a lot of music royalty companies that can do it for you. You just need to understand which companies are right for you!
Music royalty companies provide intermediary services between copyright holders and parties who use copyrighted works.
Joining one or more royalty companies will help you get royalties for your music. Let’s see how music royalty management works.
Performance Rights Organizations (PROs) collect public performance royalties, while Mechanical Rights Organizations (MROs) collect mechanical royalties.
Summing up, the main types of royalties are collected and distributed as follows:
It’s important to remember that music royalty companies change from country to country. With that in mind, here are a few examples.
We provide a complete article comparing ASCAP vs BMI vs SESAC. Check it out to help make your choice!
Mechanical royalties are also due to you, of course. But they work differently. You should make your consideration based on your country. In many countries, some royalties companies collect both performance royalties and mechanical royalties. So you may not need an MRO.
Finally, if you are a master rights holder or a performer/instrumentalist (such as a featured artist) neighboring rights royalties could be due to you. Even then, your country could be the deciding factor.
Getting royalties for music is one of the best ways to boost your music business. If income from royalties is due to you, you should learn how to claim it.
This article has set out all the basic knowledge you need to get royalties from your music. You will have learned about all the basic tools needed to start or boost your adventure in the music business.
To summarise, here are the main tips to help you on your way:
Now it’s time to get started!
Don’t forget to share this article with your fellow musicians and give us a tag on your socials @musicgateway! We would love to hear what you think about this guide, so feel free to share your thoughts in the comment section below! If you found this helpful, make sure to check out our article on How To Copyright Your Music!
Here at Мusic Gateway, we have recently started offering a selection of royalty-free music! We also have a massive music library full of incredible tracks. This is not royalty free, however, we have the copyright holder information and so we can help you license any track in our library very easily! Check it out today!
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