What are Royalties?
Copyright laws are a necessary facet of day to day life for artists such as songwriters, authors, composers, and publishers in order to protect their exclusive rights to their work. Essentially, they ensure that payments in the form of royalties are made if someone wishes to use an artist’s work. However, understanding the intrinsics of royalties can become confusing, hence it may be helpful to have a breakdown in order to help an artist to determine the best form of royalty contract to fit their needs.
The music industry, in particular, relies on royalties as a primary form of payment for musicians. To begin thinking about the legalities which surround music, it is essential to realize that there are two different forms of musicians; songwriters and performing artists. The type of musician determines the form of copyright that an artist may seek. Songwriters possess the rights to the lyrics and melody of a piece of music and performing artists would possess the rights to a specific recording of a song, otherwise known as a master recording.
Therefore, there are specific royalties that are generated for various forms of licensing and usage. These may include mechanical, public performance, blanket licenses, publishing deals, print music, and synchronization royalties.
One of the more common forms of royalties is a mechanical royalty, which originated around the time when records were first made. This form of royalty is paid by record labels to a songwriter or performing artist for the number of albums that they press which feature their material. The rate of this form of royalty is negotiable and may vary between countries, but there should usually be a minimum rate to be paid. It is vital to choose the right type of mechanical royalty as sometimes they are paid on all of the albums that are pressed and in other circumstances, they don’t have to pay royalties on albums that don’t sell.
Performance Rights Royalties
When a song is performed live, a songwriter or performing artist should be paid a performance rights royalty. Live performance may take the form of a concert, or if a song is played to the public on the radio. Performance rights societies such as Broadcast Music Inc, (BMI) and the American Society of Composers, Authors, and Publishers (ASCAP) monitor media for public or live performances of songs and collect the