Music Royalties Explained
The licensing, purchase, and use of copyrighted songs and recording generate music royalties. Artists—both songwriters and performing artists—collect royalties based on the type of distinct copyrights they hold. Songwriters typically hold the rights to the lyrics and the melody of a piece of music, while the performing artists hold the rights to the master recording (i.e. the particular recording of a song).
Both performing artists and songwriters usually assign their rights to a third party, who can manage them. This is done to simplify the process for the artist; the third-party will track where and how the song is being used and seek payment.
Performance Royalties
The performance royalties are generated when a song is performed publicly such as at a live performance (at a concert or a venue), through radio, television, cable, and others.
Synchronization Royalties
Synchronization royalties are generated when the music in question is used along with a visual image or images, such as a part of a film or television program’s soundtrack, during television commercials, or in video games.
Mechanical Royalties
The mechanical royalties are generated when music is sold in a physical format (CDs, Blue-Ray or DVDs), or in digital format (downloads).
Digital Royalties
The digital royalties are generated exclusively when music is streamed on a digital platform such as Spotify, Apple Music, Tidal, and more.
Sound Exchange Royalties
The sound exchange royalties are generated when music is streamed by webcasters, digital cable music providers, radio, and more.
Other Royalties
In addition, royalties can be generated when music is used in toys or novelty items, as a mobile ringtone, during stage productions, and more.