Music Career Finder

Start Here:

1. 1. Are you a Musician/Performer or are you just looking for a career in the Music Business? *This question is required.
2. 2. What are you most interested in? Select as many as you like. *This question is required.
Female DJ using mixer during live DJ set

DJ

Asian female singer in studio with mic

Singer

Music Director with headphones around her neck in the on-air studio at the radio station

Music Director

Closeup on an Orchestrator's hand writing notes on sheet music

Orchestrator

Young Black male Drummer playing the drums

Drummer

Young female Audio Engineer with soundboard in recording studio

Audio Engineer

Young female Pianist at piano

Pianist

Young black male Music Producer in recording studio

Music Producer

Mastering engineer using mixing console in recording studio

Mastering Engineer

Record Producers working in a music studio

Record Producer

Female Guitarist in recording studio

Guitarist

Songwriter with acoustic guitar writing lyrics in notebook

Songwriter

Lyricist listening to music and writing ideas in her notebook

Lyricist

Ceiling of opera theatre with crowd taking their seats

Opera Singer

Personal Manager in the recording studio with the band he manages

Personal Manager

Young female Bassist with her band

Bassist

Music Teacher showing bass to young male music student

Music Teacher

Concertmaster playing his violin

Concertmaster

Close up on a Composer's hands playing the piano

Composer

Director of A&R wearing headphones

Director of A&R

Royalties. The mere mention of the word scares most inexperienced musicians away from even attempting a career in this industry.

Some think the process of collecting money from their music is much, much simpler than it is, while many others realize it can actually be much, much less direct than it ought to be. So, are music royalties really that complicated? Well…yes, in a word.

It can take a lot of looking at definitions over and over in order to understand what’s going on and what money comes from where, and many in the business don’t even have a proper grasp on what’s happening (so don’t feel you’re alone in your confusion). However, if you’re going to make it as a musician, you need to have at least a base-level understanding of what music royalties are, how they are generated, who collects them, and why.

I could write 10 articles on this subject and still not cover every aspect of this technical side of the business, but here is a rundown of the basics, for those who could use a little help.

These are the types of music royalties you need to know about:

  • Master-generated royalties
  • Recording royalties from download sales and streams
  • Neighboring rights royalties
  • YouTube recording royalties
  • Publishing-generated royalties
  • Performance royalties
  • Mechanical royalties
  • Print royalties

Before We Dive In

There is a lot to discuss when it comes to music royalties, but before we can dive in too deep, we have to start by explaining one thing upon which the entire royalty system is based: every song you hear has two separate components, at least as far as music royalties are concerned. One is the master copyright and the other is the publishing copyright.

Here’s a quick explanation of which is which:

A master copyright is the sound recording (typically just called the master or the sound recording) you actually hear. It doesn’t matter if it’s on a vinyl record or on Spotify — what you hear is the master.

The publishing copyright concerns the pieces that make up your favorite songs. This specific copyright focuses on the lyrics, the melody, the composition.

If you’re a bit confused, perhaps you can think about it like this — you can steal a master by ripping it straight from YouTube (which remains a huge problem). If you do that, you have the song in your possession.

You can steal the publishing parts if you sample a song without permission, use the same progression of notes, or even a section of lyrics, all without getting the a-okay from whoever owns the copyright. 

It is vital you understand the difference between publishing and the masters, which is how I will refer to them from here on out in this article.

Royalties

Every musician knows royalties are important…but what exactly are they? Put simply, a royalty is an “agreed portion of the income from a work paid to its author, Composer, etc., usually a percentage of the retail price of each copy sold,” according to Dictionary.com.

Royalties pay a rights holder for the use of some kind of intellectual property, so while they don’t only pertain to music, that’s obviously what we’ll focus on in this piece.

Back in the day, music royalties were very simple, as much of the music industry was a simple retail business. People would walk into a record store and buy something, and there was only one kind of radio. In just the past decade or two, royalties have become incredibly complex, and now there are a number of kinds of music royalties coming in from dozens, if not hundreds, of sources.

As the industry continues to change, new types of music royalties pop up and their value shifts. They have taken over from pure sales in regards to how the business functions and how many musicians and Songwriters (not to mention their teams and even their record labels) make their money.

There are two kinds of music royalties, which are based upon the two different components discussed above: the master and the publishing. Each one of those has three specific royalties that fit under one of the two labels which we will dig into.

Up first are master-generated royalties.

How much are royalties for a song?

Caleb J. Murphy (CareersInMusic)

There are multiple types of royalties for different uses, so the amount you earn can vary widely (see below for the different types of royalties). The one type of royalty we can quickly mention is the mechanical royalty rate (set by the United States government), which is $0.091 per CD sold or digital download.


How are royalties calculated in music?

Caleb J. Murphy (CareersInMusic)

There are different factors that come into play when calculating music royalties, such as the type of royalty being generated, the location of where the royalty was generated, the company that must pay the artist royalties, and many other things.

Generally speaking, every song has two rights attached to it: composition rights and master recording rights. The songwriter(s) own the composition rights and whoever records the song owns the master recording rights. Every time a royalty is generated for a song, both songwriter(s) and recording artist(s) earn a portion of the royalty.


What are the 4 main types of royalties?

Caleb J. Murphy (CareersInMusic)

The main types of music royalties are mechanical royalties, performance royalties, micro-sync royalties, and print royalties.

  • Mechanical royalties are generated when someone streams or buys your music.
  • Performance royalties are generated when you or someone else performs your song in public, which includes live performances, an establishment playing your music over its sound system, songs played on TV, and radio stations playing your music.
  • Micro-sync royalties are generated when your music is paired with moving images, such as on YouTube, TikTok, TV, film, or video games.
  • Print royalties are generated when your sheet music is sold.

Hey, what do you think about trying our new Music Career HelperMusic Career Helper really quick? It’s totally free and could help get your career moving fast! Give it a try. It’s totally free and you have nothing to lose.

Master-generated Royalties

These royalties are generated whenever the master is used in some way. Sounds simple enough, but there are a few different kinds of master-generated royalties to look at.

1a. Recording Royalties From Download Sales and Streams

These are perhaps the most basic and simple to understand of all music royalties. Whenever you buy a song on iTunes or Amazon, a music royalty is generated. Those are very straightforward, and it’s almost like when things were truly easy to grasp, back when stores were the primary way people bought music. The same thing happens whenever people stream a song on Apple Music, Spotify, or any of the dozens of other sites, though the royalty is much lower.

This money is typically collected by the company distributing the music, which is then usually paid to the label, and a part of that is paid to the artist. These days, many up-and-coming musicians work directly with the distributor, cutting out the label entirely.

1b. Neighboring Rights Royalties

The entity that owns the sound recording (usually a record label or the artist themselves, which is common with underground acts) earn what is called a neighboring rights royalty anytime a song is played publicly. This may mean your tune is chosen to air on Pandora or SiriusXM, on TV, or perhaps even in a restaurant or store — though unless it’s a major chain or well-known business, the owners may not be doing so legally, and if it’s not registered, no royalty is generated.

1c. YouTube Recording Royalties

While payout rates are notoriously small, every royalty generated matters, and YouTube can be big business for some artists who get lucky. When an advertisement is added to a video (any kind of ad, and there are a number of them), the Google-owned company makes money, and so do the rights holders behind the sound recording.

Publishing-generated Royalties

Just as master royalties are generated from any use of the master, the same can be said for publishing royalties. But when would the publishing copyright be utilized?

Here are three examples that differ from the ones we just went over in the previous section…though in some instances, both kinds of music royalties will be paid, so keep an eye out for repeats. Also, if something appears to be in both sections, it means the performers and the Songwriters and Producers are being paid, which isn’t the case for all kinds of royalties.

2a. Performance Royalties

Performance royalties are generated whenever a specific song of any form (a remix, the original, a cover, etc.) is performed in public or broadcast in some way. Say for example we’re looking at Adele’s “Rolling in the Deep.” If someone listens to this song on their local top 40 radio station, a performance royalty is created.

If the song is remixed and included in the set of a DJ at a club, a music royalty is generated. If the single is performed by a Cover Band on America’s Got Talent, the same thing happens. If Adele’s version is used in an advertisement or played in a bar or soundtracks a TV show, Adele and her co-writers make money.

These music royalties are collected by what are known as PROs, but we’ll get into this later.

2b. Mechanical Royalties

This kind of music royalty gets its name from when music was actually replicated mechanically, such as when vinyl and CDs ruled the world. Every song had to be reproduced, and the same process now happens when a tune is purchased digitally or streamed, as it is all the same song, just reproduced over and over again. Mechanical collection societies gather all these royalties and pay them out to the proper Songwriters and Producers regularly.

2c. Print Royalties

These are perhaps the rarest and least valuable kind of music royalties around today, but they’re still worth going over!

Print royalties are generated whenever music is reproduced in print, such as when a Piano Teacher buys a book featuring the notes to a well-known song or when a young music lover buys the sheet music for their favorite Billie Eilish song on a particular instrument. As you can imagine, print royalties don’t drive the industry like the other forms do.

Performance Rights Organizations

Okay, so now we know how music royalties are generated and the many different forms they take…but where does all this money go? Is it being wired straight into your bank account, or do you need to go somewhere to collect it? I mentioned PROs above, and here’s where they come in.

PRO stands for performance rights organizations, and they are typically (not always, but usually) responsible for facilitating the use of copyrights and collecting music royalties for their owners. These organizations take the money when, say, a song is played in a restaurant, but not when a CD is sold or a track is featured prominently in a movie.

PROs also lobby for the rights of Songwriters and attempt to make the industry fairer for smaller artists, though we won’t get too far into it, as that could be an entirely separate piece. (You can read our recent blog on how the Music Modernization Act plays into all this here.)

In the U.S. (we’ll stick to one country for now), there are four groups you should be aware of, as they handle the vast majority of these kinds of transactions. You will likely work with at least one, if not all, of the following if you end up collecting music royalties from a number of different projects over a long period of time: ASCAP, BMI, SESAC, and SoundExchange.

Additional Resources

So those are the basics, but if you want to learn more, or perhaps if you want to read what I’ve just put down in different words (sometimes that helps!) here are some places where you may get the help you need. I suggest you start with the PROs, which all have explanations of what they do and what music royalties are, which I have found helpful in the past.

You Get Paid First

Royalties work like a special bonus for those holding the rights to something valuable. Think of it as a slice of the earnings derived from the use of a specific asset–which is the song. What sets royalties apart is the priority they give to the rights owner. Those people get paid first, beating out anyone else, such as shareholders for dividends and executives of major companies for their salaries. The priority ranking is recognition of the role they played in making that asset profitable, a sort of upfront acknowledgment that their creative input laid the foundation for its success.

Are royalties paid every time a song is played?

Hugh McIntyre

Royalties are indeed paid every time a song is played, and those payments are an integral part of the music industry’s compensation structure. As a songwriter or a music rights holder, you earn royalties whenever your song is performed, streamed, broadcast, or used in various commercial settings.

These royalties are collected by performance rights organizations (PROs) like ASCAP, BMI, or SESAC, which track and monitor the usage of music. The amount you receive depends on factors such as the platform, audience size, and the specific terms of your licensing agreements. There is much more to say on this topic–read on for all of that information–but the basic answer is yes.

When Are Royalties Paid?

When it comes to getting those royalties, it’s not a random payout. They almost always follow a set schedule, and they are often doled out monthly or quarterly. It’s a systematic approach, mirroring the usage and profitability of the asset.

These scheduled payments offer more than just financial stability; they’re a way of expressing gratitude for the ongoing success of that creation. Royalties are a dependable income stream for millions of creatives.

What Are Music Copyrights?

Music copyrights serve as a legal framework that grants exclusive rights to the creators of musical works. Essentially, when a piece of music is copyrighted, it means that the individual or entity holding the copyright has the sole authority to reproduce, distribute, perform, and license that specific intellectual property. This legal protection ensures that others cannot utilize the musical creation without obtaining explicit permission from the copyright holder.

Whether in the context of commercial ventures, artistic collaborations, or media usage, the copyright holder retains control over how their musical creation is utilized, reinforcing the principle that creative ownership is a legally recognized and protected right.

The Difference Between Copyrights And Intellectual Property

Copyrights and intellectual property are related concepts, but they have distinct meanings and applications. Intellectual property (IP) is a broad term encompassing legal rights that arise from intellectual and creative endeavors. It includes various categories such as patents, trademarks, trade secrets, and copyrights.

Copyright is a specific type of intellectual property right that grants legal protection to original works of authorship. These can include literary works, music, art, and other creative expressions. Copyright provides the creator with the exclusive right to reproduce, distribute, perform, and display their work. It safeguards the specific expression of ideas rather than the ideas themselves.

In essence, intellectual property is the broader umbrella term covering a range of rights protecting creations of the mind, while copyright is a subset of intellectual property specifically dealing with the protection of original creative works. Intellectual property law, in general, aims to encourage innovation and creativity by providing creators with exclusive rights to their creations for a limited period.

Who gets the most royalties from a song?

Hugh McIntyre

The distribution of music royalties can vary, but the traditional split is often down the middle between the songwriters and their publishers, especially when it comes to compositions.

However, it’s essential to note that this is a generalization, and various factors can influence the distribution. The way a song is consumed, specific deals made by the artists, and other contractual arrangements can alter this split.

How Long Do Copyrights Last?

According to the U.S. government’s own copyright office, “The law automatically protects a work that is created and fixed in a tangible medium of expression on or after January 1, 1978, from the moment of its creation and gives it a term lasting for the author’s life plus an additional 70 years.”

That means that a song is copyrighted by those who created it and owned by them until 70 years after the last author passes away. These days, many hits are written by a number of people, so this law, and these timeframes, applies to all involved, not just the most prominent artist or songwriter or the musician who made it famous.

What Is A Sync?

In the music industry, a sync, short for synchronization, refers to the strategic pairing of music with visual media elements, such as films, TV shows, commercials, video games, or online content. This process involves synchronizing a piece of music with specific scenes, enhancing the emotional impact or narrative resonance of the visual content. The goal of syncing is to create a synergistic relationship between the auditory and visual components, amplifying the overall impact and resonance of both the music and the visual medium.

The significance of sync licensing lies not only in the artistic collaboration between musicians and content creators but also in the potential financial benefits for artists. When a song is selected for sync placement, artists receive compensation for the use of their music in addition to exposure to a broader audience. Syncs can be a powerful avenue for musicians to showcase their work in various contexts, elevating their profiles and contributing to the broader cultural fabric through the association of their music with memorable visual moments. And the money can be great, too!

Do artists get paid if their music is sampled?

Hugh McIntyre

When it comes to sampling in music, it is customary to credit the original song’s writers on the new composition. Those responsible for the original piece generally receive compensation, often in the form of royalties. However, the specifics of this compensation can vary widely.

Factors such as the negotiated terms between the parties, the extent to which the original song is incorporated into the new piece, and the overall stipulations of the agreement all influence the financial arrangements. It’s akin to a collaborative effort, where each contributor brings a distinctive element to the final creation.

While due credit is usually given to the original songwriters on the newly sampled track, the financial nuances are as diverse and nuanced as the musical intricacies themselves, and they are contingent upon the specific conditions outlined in each contractual agreement within the music industry.

Who Gets Paid For Syncs?

Sync royalties are a crucial source of income for musicians, copyright holders, and songwriters in the music industry. When a piece of music is chosen for synchronization with visual media, such as a film, TV show, or commercial, various stakeholders stand to benefit financially.

For musicians, the sync royalty represents compensation for the use of their music in the visual content. The payment they receive reflects the value added to the visual project by their creative work. The amount can vary depending on factors like the prominence of the placement, the popularity of the song, and the overall budget of the project.

Copyright holders, who may be the musicians themselves or the record labels they are signed to, for example, can also receive a share of the sync royalty. This compensation recognizes their ownership rights over the recorded music. Additionally, songwriters are entitled to a portion of the sync royalty, acknowledging the contribution of the musical composition to the overall synchronization.

Other individuals involved in the creative process, such as producers and publishers, may also receive a share of the sync royalty, based on their respective agreements.

Site Search
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Use.