Examining the different kinds of music royalties that songwriters, publishers and recording artists receive.
Before we examine the different kinds of royalties which exist, we must establish that there is an important difference between songwriter/publisher royalties and recording artist royalties.
Songwriters and publishers earn royalties when their music is performed in public, whether on radio, television, clubs, restaurants or concerts. These music royalties are collected by Performing Rights Organizations such as ASCAP, BMI, and SESAC, and then distributed to the songwriter and/or publisher. Each country has its own P.R.O. Songwriters and publishers also earn money from recording sales.
Recording Artist Royalties
Recording artists don’t earn royalties on public performances. They earn royalties when they sell recordings.
However, since the Digital Performance Rights in Sound Recordings Act was passed in 1995, recording artists receive some form of royalties from public performance, which is limited to when their music is played in a digital format such as on the internet and on satellite radio.
Aren’t royalties a tremendous incentive for developing your songwriting skills?
Different types of music royalties.
The songwriter, publisher and recording artist earn mechanical royalties based on the number of recordings sold. This is paid by the recording company.
Here are the mechanical royalty rates which artists and publishers should receive, according to the US Copyright Act.
2003 – 8.0 cents per song.
2004 – 8.5 cents per song.
2005 – 8.5 cents per song.
2006 – 9.1 cents per song.
2007 – 9.1 cents per song.
So if you have one song in 2004 which you wrote and published, and a million albums are sold, the mechanical royalties you earn would be $85, 000.
These are earned from the public performance of a song, whether at shows, on radio, in clubs or in bars. This kind of royalty applies to the songwriter and/or publisher and is paid by Performing Rights Organizations, (as mentioned above).
The good thing about performance royalties is that the songwriter/publisher can continue to earn money for many years after a song’s success. Isn’t songwriting a great career? This is generally the biggest royalty generator for the successful songwriter and/or publisher. A number one song can easily earn as much as 3 million dollars.
Songwriters and publishers earn royalties because of the fact that they are the copyright owners of the song. If users of music, such as radio and TV stations want to use music, they must obtain a license, and that money is distributed to the copyright owner through the P.R.O.
Music Royalties – Synchronization Royalties
This deals with a song being played as background music, whether it’s for a film, a commercial, or a television program. In such a situation the song is spoken over.
If the song is synchronized into a movie, the movie company pays royalties to the songwriter and publisher for showing the movie to the public. If, and when soundtracks are sold, the songwriter and publisher, as well as the recording artist earn mechanical royalties.
Music Royalties – Foreign royalties
Songwriters and publishers also earn foreign royalties when their music is used in other countries.
When sheet music is printed, the songwriter and/or publisher earn print royalties.
Audio Home Recording Act of 1992.
Since 1992, manufacturers of recording devices, such as CD burners and tape recorders, and manufacturers of blank recording media such as blank CDs, blank tapes and blank DVDs, are required to pay royalties to the register of copyrights.
As far as I’m concerned, this makes a lot of sense, because of the fact that songwriters, publishers and artists lose a significant amount of money when unauthorized copies of their music are made.