Have you ever wondered who gets paid when your favorite song is played on the radio or streamed on Spotify? The answer isn’t always as straightforward as you might think. In fact, there are a lot of different people who can potentially receive royalties from a single song.
In this course, we’ll dive into the world of music royalties and unravel the mystery of who gets paid when your music is played. We’ll cover everything from the two main types of royalties (performance and mechanical) to the different parties involved in the royalty chain.
But first, let’s take a quick look at some of the most common misconceptions about music royalties:
- Misconception #1: Only the artist who sings the song gets paid.
- Misconception #2: Record labels keep all the royalties.
- Misconception #3: Royalties are only paid when a song is sold.
These misconceptions are all false. In reality, there are a number of different people who can potentially receive royalties from a single song. These include the songwriter(s), the composer(s), the recording artist(s), the record label, the publisher(s), and any other parties who have contributed to the creation or distribution of the song.
Music Royalty Recipients
Music royalties are payments made to the owners of copyrighted music when their work is used in certain ways. The specific parties who receive music royalties can vary depending on the type of use, but they typically include:
Songwriters: Songwriters receive royalties when their compositions are performed publicly, such as when songs are played on the radio, in concert, or on streaming services. They also receive royalties when their songs are reproduced in physical or digital formats, such as when they are sold as CDs or downloaded online.
Composers: For instrumental pieces, composers craft the musical tapestry, weaving melodies and harmonies.
Recording artists: Recording artists receive royalties when their recordings are sold or streamed. They may also receive performance royalties for certain types of public performances.
Publishers: Music publishers are companies that represent the rights of songwriters. They collect royalties on behalf of songwriters and typically split the royalties with the songwriters on a 50/50 basis.
Record labels: Record labels are companies that produce and distribute sound recordings. They collect royalties on behalf of recording artists and may also receive royalties for certain types of public performances.
Performing Rights Organizations (PROs): PROs are organizations that collect and distribute royalties for public performances of music. They work with businesses that use music, such as radio stations, concert venues, and streaming services, to collect royalties and then distribute them to the appropriate copyright holders.
In addition to these primary recipients, there may be other parties who are entitled to a share of music royalties, depending on the specific circumstances. For example, producers, session musicians, and other contributors to a sound recording may also receive royalties.
How Do Royalties Get Paid?
The journey of royalties from their source to the hands of the rightful recipients is a complex one. Performing Rights Organizations (PROs) and Mechanical Licensing Collective (MLCs) play a crucial role in collecting and distributing royalties to the relevant parties.
PROs, such as ASCAP, BMI, and SESAC, track and collect performance royalties for their members, ensuring that songwriters, composers, and publishers receive their fair share. MLCs, like the Harry Fox Agency, manage the mechanical licensing process, ensuring that royalties are paid for the reproduction of songs.
The amount of music royalties that each party receives can vary depending on a number of factors, including the popularity of the music, the type of use, and the terms of any contracts that are in place. However, music royalties can be a significant source of income for songwriters, recording artists, and other music industry professionals.
Protecting Your Assets
It’s essential for musicians to protect their intellectual property and safeguard their royalties. Here are some key steps:
- Copyright Registration: Register your songs with the United States Copyright Office to establish your ownership and legal protection.
- Pro Affiliation: Join a PRO to ensure your performance royalties are collected and distributed accurately.
- Publishing Agreements: Carefully review and understand any publishing agreements you enter into, ensuring fair compensation for your work.
- Royalty Audits: Regularly audit your royalty statements to verify that you are receiving the correct payments.
