Music Royalties And How They Work

Most professional recording musicians and songwriters hope to one day have a smash hit that saturates the airwaves and gains them more fans.
From: HW Fisher
July 5th, 2013 | 0 Comments

Most professional recording musicians and songwriters hope to one day have a smash hit that saturates the airwaves and gains them more fans. Partly that stems from a desire to see their art accepted and enjoyed by a large amount of people, but also the fact that a hit record, particularly one that has long term appeal, can generate serious income for them from music royalties.

In theory an artist should receive a royalty cheque every six months for the use of their music. Although most publishers will make sure you get a cheque you can’t be guaranteed that the amount is what you’re actually owed. Royalties are a complex and convoluted business, but by utilising a specialist royalty auditing team with a deep understanding of music royalties, you can ensure that you know exactly what you should be receiving.

The exact amount of royalties you receive will be stipulated in the licensing agreement drawn up between yourself and the publishing company. It pays to get professional legal advice from a company used to the often labyrinthine contracts that publishers and record companies draw up.

Once the percentage is agreed on it’s easy to think that you’ll simply receive an accurate statement with accompanying cheque at the agreed upon interval, however there are all manner of ways in which you can end up underpaid.

One of the main problems causing inaccurate payment of music royalties is the fact that there isn’t just a single royalty. There are in fact several different royalties and each one needs to be tracked and recorded accurately.

The type of royalty everyone knows about is called the performance rights royalty. Every time your song is performed in public you should receive a royalty. Public performance covers a live performance, airplay on the radio and the use of your song in public places such as bars or shops. The use of music in these capacities is monitored by the Performing Rights Society (PRS). Anywhere that wishes to use music in a public place must pay the PRS a fee, which they then pass on to publishers for distribution to artists. Likewise, all radio stations have to submit their playlists to the PRS for the same purposes.

A music royalty that is less well known is the mechanical royalty. This pays a royalty every time the song is physically reproduced, be it a CD single or album, a compilation or other format, including use as a ringtone or other non-human performance of the material. Collection and distribution of these is handled by the Mechanical-Copyright Protection Society, which works in alliance with the PRS.

Add to these two the synchronisation royalty (for use of the material on TV or film) and the publishing royalty (for sales of printed sheet music) plus the relatively new arena of digital royalties for downloads and digital radio, and it’s easy to see how the quantity of different royalties and their monitoring and collection leaves the artist open to either accidental or deliberate underpayment.

Royalty auditing specialists have intimate knowledge of royalty payments from both inside the music industry and from an external auditing perspective. By using their extensive experience they can make sure that your music royalties are being accurately reported, which means you’ll get what you’re owed for your creative endeavours.

For more information and advice from a specialist royalty auditing team, please visit http://www.hwfisher.co.uk/royalty-auditing-and-licensing