Royalty Benefits
*Written by Bianca Kirkham
Royalties, what does that
actually mean in the music industry? Artists write and perform songs all the
time, but have you ever wondered how they actually get paid for the music they
make? Think back to the time you last heard a MC Hammer song on a commercial or
a song on Pandora by the artist known as Future. Singers and song writers have
rights to their own music-after all, they did create it. The creation and
streaming of their music is how they acquire a pay check. In other words, this
payment of funds is called royalties.
Royalties are a percentage
of gross or net profit or a fixed amount per sale to which a creator of a work
is entitled, which is agreed upon in a contract between the creator and the
publisher, agent, and/or distributor. These terms and agreements must be signed
off on a legal document such as a contract. The contract that states the
payment of accrued royalties shall be generated semi-annually on the first day
of two selected months that all parties have agreed upon. For example, the
first annual payment maybe on December 1st and the second on June 1st.
According to the Copyright Royalty Board, the 2016 rates for commercial
subscription services is $0.0022 per-performance, and for commercial non
subscription services is $0.0017 per-performance. There are several types of
royalties such as, performance royalties are for performances in front of an
audience, and mechanical royalties are paid by the record label to the
publisher for the phono records, digital audio tapes, and other manufactured
formats. These are copyright registrations that entitle a musical composer to
performance royalties whenever the musician's composition is performed
publicly, over radio, or in restaurants, bars, or other public places.
Now that you know how
artists receive royalties, the question is where exactly does the money
actually come from? How is the money generated? A distributor collects
royalties directly from stores/streaming on behalf of the label. These
distributors are part of a performing rights organizations by the names of
Broadcast Music Inc. (BMI), American Society of Composers, Authors and
Publishers (ASCAP), and Society of European Stage Authors and Composers
(SESAC). These organizations are responsible for collecting income on the
behalf of song writers, performers, and musicians. In an industry like this,
members desire accountability for their artistry, and these royalties aid
artist receive their cut for the hard work they have put in. This information
is provided to encourage you to research payment methods for recorded songs and
performances.
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