The music industry has changed dramatically over the past decade, and with the help of technology that has led to the emergence of streaming services, artists and record labels have taken full control of music royalties. their creative works. It also made it easier to track revenue sources and set a uniform revenue percentage.
The compensation that rights holders (songwriters, composers, performing artists, etc.) receive for the licensed use of their music is known as music royalties.
There are 4 main types of music royalties in the music industry including synchronization royalties, performing royalties, mechanical royalties and printing royalties.
Synchronization fees are royalties paid to rights holders each time a song is synchronized with other content. The license grants the licensee or purchaser the right to use the music in visual work such as movies, TV shows, game advertisements, YouTube, or other similar content.
A recent example is the trailer for “Wakanda Forever” where Tems’ rendition of Bob Marley’s “no woman no cry” and Kendrick Lamars’ “Alright” played as the trailer’s soundtrack.
The right to the music generally belongs to the publishing house which represents the owner or the artist. Copyright is divided into two parts including mastery of sound recording and composition
When a director or producer wants to use a song for a project, they should contact the songwriter or publisher of that piece to ask for permission. The songwriter then offers the song at a negotiated price for one-time use. The cost then depends on various factors such as how long the song will be used, whether the song will be used as background music, commercials or movie trailers.
Factors also include whether the song will be used from the original recording or will be covered by another artist as we have done in musical films such as “Pitch Perfect”. The territory is also one of the factors that make up the agreement.
Performance royalties are also part of the fees that the composer receives if the work is broadcast on radio, television or the Internet.
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Mechanical royalties are royalties paid each time a copyrighted work is reproduced in physical or digital form. The songwriter is liable for mechanical royalties when their song is printed on physical form like CDs, vinyls, cassettes, used as a ringtone, or played on interactive platforms like Spotify, Apple Music, Boomplay, etc.
Interactive streaming platforms allow users to interact and demand what they listen to in order to generate mechanical royalties.
Mechanical royalties are paid by whoever obtains the mechanical license to reproduce or distribute your music and this can range from record companies or labels to anyone who wants to record a cover of your song. The songwriter also decides whether a share goes to another contributing co-writer or producer.
Execution royalties are royalties paid to a songwriter or publisher of a particular song each time the composition is released or performed publicly. They are also generated when songs are played on TV, radio, life events, restaurants, gyms, supermarkets, etc.
It should be noted that not all countries have enforced payment of performance royalties, so you don’t get paid when your songs are publicly performed in such places.
Printing royalties simply means you owe royalties every time your songs are featured in print. In recent times, the most common form is when your songs are written on lyrics sites (and you monetize them, i.e. they pay you to display your lyrics)
It is also necessary that you understand both types of music rights as some royalties are paid to the composition right owner and some to the Master right owner.
Two types of music rights: Master vs. Composition
The term “master” refers to the copyright for the specific expression of a composition which is established when it is made into a sound recording and which belongs to the performers and their record companies (if an agreement registration is in place).
Copyright for lyrics, melody and harmony belongs to the songwriters and their music publishers. When an authentic and original musical work is transferred to a tangible medium, such as a notepad, sheet music, etc., the copyright in the composition is secured.