Types of Music Royalties and Royalties Paid to Dancehall Artists
There are two main types of Music Royalties: performance royalties and recording royalties. For each composition, a performer will be entitled to both of these royalties. Performance royalties are the income from music performed or recorded on stage or screen. Unlike recording royalties, which are earned when a song is played in a movie theater, performance-based royalties are collected from online music services. This difference is significant, as it makes it possible for performers to generate more income from their work.
Mechanical royalties are paid to recording societies by performing rights organizations. For example, the US government sets a royalty rate for each CD or digital download. For sound recordings, the rate is 9.1 cents. If the government legislates a higher rate, the royalty rate is likely to change. Both the publisher and the publishing service pay the music royalties. However, the rate for both is subject to change. For audiovisual works, the publishing services will pay the publishing society.
Performing Right Society (PRS) and Mechanical Copyright Protection Society (MCPS) collect the music royalties for their members. SESAC, or the Society of European Stage Authors and Composers, collects music royalties from different avenues. A PRO will pay a songwriter a blanket license fee in order to release their work for public performance. This license fee is paid to all media outlets, including radio stations, television networks, live venues, and stores. For example, Dolly Parton receives royalty payments from Whitney Houston’s song “Respect.”
Another way that music is used in audiovisual productions is through mechanical royalties. The master rights are owned by the artist, but the songwriter or recording artist is not the owner of these rights. The publishing administrator collects these royalties and distributes them to the writer or artist. As long as the songwriter or artist owns the master, the publisher or performer receives the royalties. If a performance uses the recording, the performing right organization will receive the corresponding amount.
The music industry also includes print royalties. Although recording artists are rewarded royalties for performances, songwriters and recording artists are not rewarded royalties for performing songs in public. But they do receive print royalties based on the number of copies made. The songwriter or record company pays the publisher for every copy of a song. The publisher will then pay the artist a portion of the profits. This form of royalty is also known as neighboring rights.
Physical CDs are largely on the way out, but independent record labels still use them. For example, vinyl sales can apply the same concept to music royalties. If a song is used on a CD, the artist receives a 15% royalty. The remaining $8.50 goes to the record label. This is called mechanical royalties. If a song is used on the radio, the record label pays the producer a mechanical royalty.