We explain how artists get paid for their creative work.
Royalties, not to be confused with music licenses, are the payments that go out to artists when their work is used in some capacity. Royalties are paid for several different forms of licensing and usage, including mechanical, public performance, synchronization, and print music. Generally royalties are paid once the copyrighted work is broadcast or performed in any way. The four types of music royalties are:
Mechanical royalties are paid upon physical reproduction of an artist’s work. For example, when a record company produces records they need to pay royalties every time a single copy is reproduced. This is most often negotiated on the front end of contract between a music publisher and record label. These royalties apply to any physical format of music, including vinyl, cassette, and CD productions.
Public performance royalties are the most wide-reaching, common form of royalties that are issued to musicians. By definition, public performances pertain to any performance of copyrighted material. This can include, but is not limited to, airing music on radio, live performances, performances recorded for film or television, and playing copyrighted work over stereos in public spaces. Most often performance royalties are paid to performance rights organizations (PROs) such as BMI or ASCAP. The PROs collect the royalties and pay them out to the artists that have signed with them as representation, after taking a cut for operating costs.
Sync royalties are paid for copyrighted music that is paired with visual media of any kind, including films, commercials, and online/streaming video and advertisements. These royalties are often negotiated on the front end of the licensing process, and are paid based on how many times the song will be used, and for which audience.
Print royalties are the simplest and least common form of payment that is paid to an artist. This type of royalty applies to copyrighted music that is transcribed to a print piece, like sheet music, and then distributed. Royalties are paid to the copyright holder based on the number of copies made of the printed piece.