Everything You Need To Know About Royalties Explained
The thought of royalties and everything surrounding it can often times be confusing to many. A lot of artist don't even know that there are different types of music royalties that exist. Below you will find a list of some that you should know. Tell us what you think and leave a comment. Thanks.
Performance Right
Performing right royalties are paid to songwriters and publishers whenever their songs are performed. It is based on a songwriter’s and publisher’s right to perform the work – or cause a sound recording to be heard – in public. Performance right royalties are paid on terrestrial radio plays of songs and songs played in clubs, in restaurants, in bars - anywhere music is played publicly. The royalties are also collected whenever someone does a cover version of their song.
Print royalties are generated from sheet music for writers or publishers only. These royalties are typically bundled with performance rights royalties
Digital Performance Right
Digital Performance Right (DPR) is the right of the sound recording copyright owner to perform or cause his/her sound recording to be performed via digital transmission. DPR royalties are paid to record labels and performers for the performance of their sound records via digital transmissions, i.e. satellite TV and digital cable, non-interactive websites (including re-transmissions of terrestrial radio), interactive webcasting services, and satellite radio.
Foreign
In addition to US copyright royalties, there are many types of foreign copyright royalties that you may be entitled to collect. Music royalties and copyright laws differ greatly by country. Many of the U.S. royalty organizations mentioned on this website have agreements with foreign royalty organizations that could benefit you. We encourage you to sign up with US royalty organizations for worldwide royalties collection. By permitting the US organizations to represent you worldwide, you are benefitting from the domestic and international experience held by the legal teams in these organizations. If you opt to attempt to collect foreign royalties directly from the foreign organization, please make sure that you have not already authorized a US organization to collect the money for you.
Hometaping
Hometaping royalties are generated from the sales of blank media such as CDs, and digital audio home recording devices such as standalone CD burners, DAT recorders, music centers or servers, and portable satellite radio devices which have recording capabilities.
Mechanical
Mechanical royalties are paid to songwriters for the use of musical compositions for use on CDs, records, and tapes. . Payment is based on sales of the CDs, records or tapes. For instance, when a record label presses a CD of a song, a mechanical royalty payment is due to the songwriter. If the songwriter has a publishing deal, then the publisher gets a percentage of the songwriter’s mechanical royalties.
Rental/Public Lending Rights
Rental and Public lending rights are exceptions to the distribution right and must be explicitly provided for in a country’s laws. Rental means making available for use, for a limited period of time and for direct or indirect economic or commercial advantage.
Lending means making available for use, for a limited period of time and not for direct or indirect economic or commercial advantage. For example when it is made available through establishments that are accessible to the public, i.e. public library.
Rental is more likely than Lending rights to require the payment of remunerations to performers and copyright owners. One country that has a large rental market is Japan. AARC collects Japanese rental royalties for its members.
Sales
The most common royalty you may think of is a royalty generated from sales of music, either at a retailer or digitally online. These royalties are not administered by an organization, but privately contracted between the artist and record label.
Synchronization Right
To use music in a motion picture, the producer must acquire the right to record the music in synchronized or timed relation to the pictures in a film, video or DVD. Synchronization royalties are generated from music tied to a film, TV show, commercial, or background music. These royalties are usually distributed with performance rights royalties.
(Source): Music Royalty Terms and Definitions