As a songwriter or music producer, understanding royalties is crucial to earning money from your music. Royalties are payments made to rights holders for the use of their creative work. In this article, we will explore the different types of royalties and how they are distributed to the artists involved in the making of a song.
Mechanical Royalties
Mechanical royalties are paid to the songwriter or music publisher for the reproduction and distribution of a song on physical media, such as CDs or vinyl records, and digital downloads or streaming services. The royalty rate is determined by law and is currently set at 9.1 cents per song per unit for physical media and digital downloads, and 1.75 cents per stream for interactive streaming services. Mechanical royalties are typically paid by the record label to the songwriter or publisher.
Performance Royalties
Performance royalties are paid to the songwriter and publisher for the public performance of a song, such as on radio, television, live concerts, or streaming services. The royalties are collected by performing rights organizations (PROs) such as ASCAP, BMI, and SESAC in the United States, and PRS and PPL in the UK. The PROs collect performance royalties from music users, such as radio stations and venues, and distribute the royalties to the rights holders based on the frequency of use and other factors.
Sync Licensing Royalties
Sync licensing royalties are paid to the songwriter or music publisher for the use of a song in movies, TV shows, commercials, video games, and other media. The fee for sync licensing is negotiated between the music publisher and the producer of the media. The royalty is typically split between the songwriter and the publisher.
Distribution of Royalties
The distribution of royalties is based on the ownership and percentage of rights of the different artists involved in the making of a song. For example, if a song has multiple songwriters and a music publisher, the mechanical and performance royalties will be split among them based on their ownership percentage. The songwriter will receive a percentage of the performance royalties based on the number of times the song was performed, and the publisher will receive a percentage of the mechanical royalties based on the number of copies sold.
In addition, there may be other rights holders involved in the distribution of royalties, such as session musicians, backup singers, and producers. These artists may receive a percentage of royalties based on their contribution to the song, as negotiated in their contract.
Conclusion
Understanding royalties is crucial to earning money from your music. Mechanical royalties are paid for the reproduction and distribution of a song, performance royalties are paid for the public performance of a song, and sync licensing royalties are paid for the use of a song in media. The distribution of royalties is based on the ownership and percentage of rights of the different artists involved in the making of a song. By understanding the different types of royalties and their distribution, artists can ensure they are properly compensated for their creative work.
