What are Royalties and How do I Earn them?

When you make a song, you automatically own the copyright for that composition. You would think musicians, publishers, labels and artists could only collect two royalty types from these two copyrights, but in fact, there are up to six types of royalties that can be generated from these copyrights and this will differ according to territory, law and configuration of the collection structure in a particular country.

Typically, a compositional copyright can generate four royalty types; mechanical royalties, performance royalties, micro-synch royalties, and print royalties. The type of royalty earned, and the party owed, depends on the way a piece of music is used in a particular instance, as well as the territory. Since there are two different copyrights in any piece of recorded music; one for the sound recording (master copyright) and for the music and lyrics (compositional copyright), there can technically be multiple different copyright owners, however, there are many cases where one rightsholder will own both copyrights.

Music royalties are payments distributed to you for the use and/or reproduction of your music. Although the definition of music royalties is fairly simple, defining these royalties by how they are earned is a little more complex. Anyone who writes or co-writes an original composition or song, and/or any owner of an original composition or song, is due royalties when their music works are used.

TYPE OF ROYALTIES

Performance Royalties

Performance Royalties are generated from the public performance of a copyrighted song. This can be broadcast (television, Radio), digital (Apple Music, Spotify, Tidal, etc) or in public (concerts, gym, malls, etc).

Mechanical Royalties

Mechanical Royalties are generated from the composition copyright of a song and are owed to the songwriter when an artist releases a song to the public either through a public performance or sound recording. This includes when an artist releases a song to be digitally streamed

Synchronisation Royalties

Synch Royalties are generated from copyrighted music, when it is “synced” with visual media. For example, a copyrighted song can generate sync royalties when it is used in a commercial or a video game.

Micro-sync Royalties

With the rise of user-generated content (UGC) in recent years (YouTube and social media platforms like TikTok and Instagram) another revenue stream has become available, this new revenue stream is commonly known as ‘Mirco-sync Royalties’. Micro-syncs are most often earned by music used in streaming video clips. Depending on where these usages occur, they can generate both performance and mechanical royalties. A common example of this would be monetized YouTube videos.

Print Royalties

Print Music Royalties are less common because they are generated when copyrighted music is transcribed to a print piece, such as sheet music and then distributed through a music publisher. Print Music Royalties are usually paid to classical music or film score composers.