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In the music industry, royalties are payments made to musicians, songwriters, producers, and other rights holders for
the use of their work. There are several types of music royalties, each corresponding to a different way in which music is used or
distributed. Here's an overview of the main types:
These royalties are earned when a song is performed publicly, whether live or through broadcast. This includes radio plays, television
broadcasts, live concerts, or even music played in public spaces like restaurants or shopping malls.
- Performance Rights Organizations (PROs), like ASCAP, BMI, and SESAC in the US, collect these royalties on behalf of songwriters,
composers, and music publishers.
- These royalties are split between the writer, publisher, and sometimes the performer.
2.Mechanical Royalties: Mechanical royalties are earned when a song is reproduced in physical or digital formats, such as CDs,
vinyl records, digital downloads, and streaming services.
- Mechanical licenses: are required whenever a song is reproduced or distributed in these formats.
- For physical copies (like vinyl or CDs), mechanical royalties are paid to the songwriter and music publisher.
- On streaming platforms like Spotify or Apple Music, mechanical royalties are typically paid to the publisher, and then to the songwriter,
based on the distribution agreement.
3.Sync Royalties: Sync royalties are earned when music is licensed for use in visual media, such as films, TV shows, commercials, video games,
or online videos.
- Sync licensing involves granting permission to use the music, and the songwriter or music publisher typically receives the royalties.
- The amount can vary greatly depending on the type of project, the prominence of the music, and the platform.
4. Print Royalties: These royalties are earned when a song is reproduced in sheet music, songbooks, or other printed forms.
- Music publishers collect these royalties when their music is printed and sold, and they distribute a percentage to the songwriter and any
other stakeholders.
5.Neighboring Rights Royalties: Neighboring rights are related to the use of sound recordings, rather than the underlying compositions.
These royalties are earned when recorded music is broadcast on radio or television, or played in public spaces.
- These royalties are typically paid to record labels, performers, and session musicians rather than the songwriters.
- In the U.S.,SoundExchange collects and distributes these royalties, while in other countries, organizations like PPL (UK) or
SCPP (France) handle neighboring rights.
6. Digital Royalties: These are royalties earned from music streamed on digital platforms (e.g., Spotify, Apple Music, YouTube, etc.), including:
- Streaming royalties (both mechanical and performance) are paid to rights holders when their music is streamed on various platforms.
- This can include per-stream payments, and the way it's split can depend on the platform and the rights holder’s agreement
(e.g., record label, publisher, or independent artist).
7.Radio Royalties: Radio royalties are generated when a song is played on traditional radio, digital radio (like Pandora or SiriusXM),
or online radio platforms. These royalties are often divided into two types:
-Performance royalties for the songwriter (paid by PROs).
- Neighboring rights royalties for the performer and label (paid by organizations like SoundExchange).
8. Album and Song Licensing Royalties: When an artist or record label licenses their music to be included in compilation albums or
to be used in advertisements, these royalties are collected based on the terms of the licensing agreement. These royalties can
cover physical and digital licensing, depending on how the music is distributed.
9.Royalty Advances: These are upfront payments made to artists, songwriters, or labels based on expected future royalties.
Advances can come in the form of songwriting advances (for composers) or recording advances (for performers). While they aren't
technically "royalties" in the traditional sense, they function as a way for the rights holder to receive payment upfront before the
music starts generating revenue.
10. Cover Song Royalties: If another artist covers a song, the songwriter is entitled to mechanical royalties from the sales
of that cover. The rate for mechanical royalties on covers is generally set by organizations like the **Harry Fox Agency** in the
U.S. or the Mechanical-Copyright Protection Society (MCPS) in the UK.