In popular culture and everyday conversations, we throw around the word royalty and assume it simply means receiving money over time because you have contributed to a song. This assumption is way too oversimplified as royalties are nuanced and vary based on your role in the industry. There are mechanical, performance, synchronization, and print music royalties (and others), which then apply only to various individuals including publishers, artists, labels, songwriters, and so on.
The Different Types of Royalties
A synchronization royalty, also known as a sync royalty, allows others to use the music and synchronize it with another medium like commercials, movies, and TV shows. For example, while watching a TV show you might recognize the background music as a popular song on the radio, or that a commercial for a new phone features a new artist’s song as well. A mechanical royalty applies when a record label distributes a copy of a copyrighted song. Given their rise in recent years, streaming services also fall under this royalty. Another form of royalty that frequently applies is a performance royalty. Every time a song is performed live, played in a restaurant, or streamed publicly, fees are collected by performance rights organizations and then passed on to those who have rights to the copyrighted song.
Royalties for Different Roles
Those involved in the music industry include the performers, songwriters, agencies, record labels, and publishers. Given that they offer different expertise, they receive royalties accordingly. The record labels are one of the biggest players in royalty income. They receive many of the mechanical and performance royalty payments. Most often, the artists themselves receive their royalty income from their live performances of copyrighted songs. Furthermore, a songwriter can receive income from a variety of royalties. While there are more roles that can be discussed, most of them can receive royalty incomes from multiple sources based on how the song is produced, distributed, and performed.