Let see, you’ve been making music for some time & finally excited about having your first piece of music be released. The one thing in your way…Royalties & Copyrighting. The music industry is a complex web of creativity, business, and legalities. Two of the most important aspects that every artist needs to understand are royalties and copyrights. Whether you're an independent artist, a songwriter, or part of a major label, understanding how royalties and copyrights work can significantly impact your career.
What Is a Royalty?
At its core, a royalty is a payment made to the owner of an asset. Whether that’s a song, a book, or a patent, it's a payment made in exchange for the right to use that asset. In the music world, royalties are payments made to those who own the rights to a piece of music. This includes not just the artists who perform the song, but also the songwriters, composers, and other key players who had a hand in bringing the music to life.
When music is played, streamed, performed, or used in various formats, royalties are paid out to these contributors based on their specific contributions. It’s like every time your favorite song plays on the radio, a chain reaction is set off, and checks are eventually cut for the people who made that song a reality. It’s an intricate system of compensation that ensures everyone involved in the creation and distribution of music gets their fair share.
Who Gets Paid Royalties?
Royalties can be divided among various parties depending on how the music is used. Here’s a breakdown:
Artists and Performers: They receive royalties from the recorded version of the song when it is sold, streamed, or used in other media. This includes payments from platforms like Spotify, Apple Music, and even YouTube.
Songwriters and Composers: If you wrote the lyrics or composed the music, you’re entitled to royalties every time the song is performed publicly or licensed for use in other media (like movies, TV shows, or ads).
Publishers: These are the entities that manage the copyrights of the songs. They collect and distribute royalties for the songwriter and composer, usually taking a percentage for their services.
Record Labels: They often hold the copyrights to the recordings themselves and collect royalties on behalf of the artists signed to them.
Several organizations, including performance rights organizations (PROs) like ASCAP and BMI, mechanical rights organizations (MROs), and labels, help facilitate the collection and distribution of royalties to the rightful owners.

Multiple Royalty Streams in the Music Industry
In the music industry, there isn’t just one type of royalty. Instead, there are multiple revenue streams, each linked to a specific type of copyright or use of the music. Let’s break down the different types of royalties:
Performance Royalties: These are generated when a song is played publicly, such as on the radio, at concerts, in restaurants, or even at your local gym. Performance royalties are collected by PROs, who distribute them to the songwriters, composers, and publishers.
Mechanical Royalties: These are paid to songwriters and composers whenever their music is reproduced, whether it's in the form of a CD, vinyl, digital download, or stream. Mechanical royalties are typically handled by mechanical rights organizations (MROs).
Synchronization Royalties: When a song is used in a movie, TV show, advertisement, or video game, the rights holder is paid synchronization royalties. This allows the visual media to sync the music with the images.
Master Royalties: These royalties are paid to the owners of the master recording of a song, usually the record label and the performing artist. Master royalties are earned when a song is streamed, sold, or licensed for use in other media.
Each of these royalty streams is connected to a specific type of copyright, and understanding this connection is key to making sure that everyone involved gets paid fairly.
Music Copyrights: Two Types to Know
Now, let’s dive into the legal side of things: Music Copyrights. Copyrights are what protect the intellectual property of songwriters, composers, and publishers. In simple terms, a copyright gives the creator exclusive rights over how their music is used, distributed, performed, or reproduced. There are two main types of copyrights in music:
Musical Composition Copyright: This copyright protects the underlying musical work itself which includes everything from the instrumental to the lyrics. It belongs to the songwriter or composer, and it is their ticket to earning royalties whenever their work is performed, reproduced, or licensed.
Sound Recording Copyright: This copyright protects the actual recording of the song. In other words, it belongs to the artist or band that recorded the song. The sound recording copyright comes into play after the song has been recorded, and it covers the specific version of the song that you hear on a CD, vinyl, or streaming service.
Sometimes the songwriter and the performer are the same person. For example, if an artist writes and records their own songs, they might own both the musical composition copyright and the sound recording copyright. However, in many cases, the songwriter and performer are different people. This is where things can get a bit more complex, as each person will have a royalty interest in their respective copyright.
How Copyrights Generate Royalties
The real magic happens when these copyrights are put to work. Each copyright generates royalties based on how the music is used. Here’s how it works:
Musical Composition Copyright Royalties: These royalties are earned from the use of the written song itself. For example, if the song is played on the radio, performed live, or used in a commercial, the songwriter and their publisher will receive royalties.
Sound Recording Copyright Royalties: These royalties come from the use of the recorded version of the song. For example, if the song is streamed on Spotify, sold as a digital download, or licensed for use in a TV show, the performing artist and their record label will receive royalties.
In both cases, the rights holders (whether it’s the songwriter, performer, publisher, or record label) will receive royalties based on how the music is used. Whether it's a publishing deal, a record label contract, or a self-publishing arrangement, the specific amount each party receives depends on the agreements they have in place
How Royalties Are Split
One of the most important things to understand about royalties is how they’re split among the different contributors. In general, royalties are divided as follows:
Performance Royalties: These are typically split 50/50 between the songwriter and the publisher. So, if you wrote a song and had a publishing deal, your publisher would receive half of the performance royalties, and you would receive the other half.
Mechanical and Sync Royalties: The split for these royalties can vary depending on the specific deal you have with your label or publisher. For example, in some cases, the publisher might take a larger percentage of the royalties, while in other cases, the songwriter might receive a bigger share.
Multiple Songwriters: When multiple songwriters collaborate on a song, the royalties are typically split according to the agreements they have in place. For example, if two songwriters co-write a song, they might agree to split the royalties 50/50. If there are more songwriters involved, the royalties might be divided based on the contributions of each person.
In some cases, songwriters may choose to self-publish their music. This means they retain full control over their copyrights and receive 100% of the royalties from their work. However, self-publishing also means taking on the responsibility of managing and collecting those royalties, which can be a lot of work.
Why Understanding Royalties and Copyrights Matters
Understanding royalties and copyrights is crucial for anyone involved in the music industry. These concepts are the foundation of how artists, songwriters, and other creators get paid for their work. Without a solid grasp of how royalties and copyrights work, you might miss out on valuable income or find yourself in a legal battle over your rights.
At the end of the day, royalties and copyrights are about protecting the creativity and hard work that go into making music. They ensure that everyone who contributes to a song gets the recognition and compensation they deserve. Whether you’re an up-and-coming artist or a seasoned pro, taking the time to understand these concepts can make a huge difference in your career.
So, the next time you hear your favorite song on the radio, remember that there’s a whole network of people working behind the scenes to make sure the creators of that song get paid. It’s not just about making great music, it’s about making sure that music can continue to be made & taking care of the fans who matter most.
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