Music Royalties Explained

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.  

Mechanical 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 royalties for the artist. Furthermore, these groups issue the licenses which permit businesses to host live performances or play songs publicly, and they then distribute the licensing fees amongst the artists, depending on the frequency of their song usage. 

Blanket Licenses

In circumstances where a set amount of music is required for a certain amount of time, a blanket license may be used, as individual song licenses can become complicated to manage. This form of royalty is also managed by performance rights societies and allows businesses to have access to a large number of songs by an artist if they are registered with a specific society. Blanket licenses vary largely in pricing as they depend on how often a business uses a song and how large an audience they reach. 

Publishing Deals

If a songwriter signs a publishing deal, then their publishers may help them to handle the administration of the music. They help in areas such as seeking licensing opportunities for their writers, issuing licenses for their songwriter’s work, and in turn, they collect a percentage of the royalties and other sources of income generated by the songwriters that they represent. In most cases, publishers usually are members of the same performance rights societies as the songwriter that they represent, and they therefore allow these groups to manage the royalty collection. 

Synchronization Royalties

Synchronization royalties are generated when an artist’s copyrighted music is paired or ‘synced” with visual media. If a business wishes to use copyrighted music in commercials, tv, film or on any other form of visual media then they would have to possess a synchronization license, which gives them the right to do so. In regards to classical and film composers, they may receive print royalties for copyrighted music which has been transcribed to a print piece such as sheet music and distributed forward through a print music publisher. 

Chase Lawyers Are The Only Experts That You Need

The legalities around music royalties can be complicated and daunting. Therefore, when reviewing royalty contracts and negotiating new ones, we at Chase Lawyers are the professionals in the area that you need. Our attorneys are not only expertly-versed in the law, but due to their lengthy involvement in the music, film, and television industries, they also have the practical knowledge and experience to deal with any issue which may arise. Our boutique entertainment law firm represents successful clients from the United States, Latin America, Europe and Asia and entertainment Lawyer Miami, Michael Epstein has led a highly successful career as an independent record label owner, DJ, and recording artist who has operated across different musical genres. Your professional royalty concerns are protected and are also given the opportunity to grow in our practice. Therefore, don’t hesitate to reach out to us so that we can discuss how Chase Lawyers can help you and your music royalty concerns.