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Understanding Royalties

Understanding Royalties

"Royalties are the salary and the Provident Fund of authors, and the assets they will bequeath to their heirs."
-Achille Forler

When you are starting out as a musician, you're doing pretty much everything yourself. There's nobody to help you. You have to learn how to do everything yourself. During this learning curve, the IPRS will be your mainstay; it will guarantee that you will get the money that is owed to you. So make sure the very first thing you do is become a member at IPRS and register your work accurately.

Now let's go back to the start and understand what royalties actually are.
A royalty is a legally-binding payment made to a musician, for the ongoing use of his or her originally-created works. Musicians receive such payments whenever their originally-recorded songs are played on the radio or television, used in movies, performed at concerts, bars, and restaurants, or consumed via streaming services. In most cases, royalties are revenue generators specifically designed to compensate the owners of songs, when they license out their assets for another party's use.

Different types of royalties

  • Sync Royalty
  • Performance Royalty
  • Mechanical Royalty

What is Sync Royalty?

Sync royalty is paid to songwriters and publishers for use of a song as background music for a movie, TV show, or commercial. Short for "synchronization," sync rights are tied to the reproduction of a song when coordinated with advertisements, television, film, or another system.

What are performance royalties?

Performance royalties are the fees music users pay when music is performed publicly. Music played over the radio, in a restaurant or bar, live events, or over a service like Spotify or Saavn is considered a public performance. Performance Rights Organizations or PROs, collect author/composer performance royalties from music users, and then pay the author/composer and rights holders. TV royalties are paid by the TV station for the broadcast of a show, film or commercial with your music on it. This is not to be confused with the actual placement of your songs in TV, film or commercials which is a sync royalty. Don't forget that you can also get paid for your live performances, so be sure to submit your set list.

What are mechanical royalties?

Mechanical royalties are Per-unit payments made for the reproduction of copyrighted musical compositions paid to songwriters and artists when music is reproduced (think CD or vinyl) and also when music is streamed (streaming mechanicals) or when downloads are purchased. Services like Spotify or Apple Music are a hybrid of 'performance' and a 'mechanical') so they pay both performance royalties and mechanical royalties to songwriters and artists.