Most people don’t realize there are different types of music royalties and that said royalties are generated in a variety of different ways. First, it is important to know and understand all the different types of music royalties.
1. Mechanical Royalties
Mechanical Royalties are generated through physical or digital reproduction and distribution of your copyrighted songs. This applies to all music formats old and new such as vinyl, CD, cassette, digital downloads, and streaming services. For example, record labels pay a mechanical royalty to a songwriter every time they reproduce and sell a CD of their music.
Mechanical Royalties are usually paid out by your record label if you are signed, or through your music distribution service if you are independent.
2. Performance Royalties
Performance Royalties are generated through copyrighted songs being performed, recorded, played or streamed in public. That’s right, even playing a recording of a song is considered a performance. This isn’t limited to coffee shops but also includes terrestrial radio (AM/FM), television, clubs, restaurants, bars, live concerts, shopping malls, music streaming services, internet radio, and anywhere else the music plays in public.
Performance Royalties are made up of two parts, Songwriter Royalties, and Publishing Royalties.
Performance Royalties are collected by Performing Rights Organizations (PRO).
3. Synchronization (Sync) Royalties
Synchronization, or Sync Royalties for short, are generated when copyrighted music is paired or ‘synced’ with visual media. Synchronization licenses give the license holder the right to use copyrighted music in films, television, commercials, video games, online streaming, advertisements, and any other type of visual media. Sync licenses are generally sold by Music Publishers.
On another note, a synchronization license does not include the right to use an existing recording with audiovisual media. That’s right, if you want to use your favorite artist’s version of a song, the licensee will also need to purchase master use license before using copyrighted music with a new audiovisual project. So unless your plan was to re-record a brand new version of the song you just licensed, you will have to contact the appropriate record label to purchase a Master Use License in addition to the sync license. Again, this goes for any audiovisual media even YouTube.
4. Print Music Royalties
Print Royalties are not as common for recording artists but are a common form of payment for classical and film composers. This type of royalty applies to copyrighted music transcribed to a print piece such as sheet music and then distributed through a print music publisher. These fees are often paid out to the copyright holder based on the number of copies made of the printed piece
