Getting paid for the use of your , , or allows you to continue creating and making a living from your music.
Understanding how the money in the music industry flows, the kind of payments you may be entitled to, and what to do to get paid, is therefore essential if your goal is to build a music career.
There are four main types of payments to music creators: royalties, advances, one-off fees, and remunerations.
An example of which rights are implicated and how royalties for musical works and sound recordings may be allocated whenever a song is streamed, including master rights royalties as a subset of related rights royalties. Note that in common law countries, the terminology “related rights” does not exist, so these are simply called rights under copyright law.
What are royalties?
In the music industry, royalties are recurring payments for the right to use a musical work or sound recording protected under.
It’s an essential part of how and other get paid and make a living, namely:
and - they can receive royalties when the musical work is used
and - they can receive royalties when the sound recording is used
Royalties are recurring payments, which means each time a musical work or sound recording is used, its creators and other rights holders are entitled to payment.
The percentage each creator and other rights holders are entitled to depends on applicable law, agreed , and various agreements between creators, music publishers, record labels, and sometimes .
There are no standard rules, so royalty percentages are a key part of the negotiation of music .
What are advances?
Advances are payments made to creators before the musical work or sound recording is monetized. They form part of a contract with a music publisher or record label.
Advances may be recoupable and non-returnable.
Recoupable advances mean that once the musical work or sound recording has generated income, the music publisher or record label who made the advance will get refunded up to the advanced amount before paying any further income, such as royalties, to the creator. Recoupable advances provide cash to creators so they can continue creating. If the song is a success, the income the creator would normally earn will be used to pay back the advance. If the song does not earn more than the advance, the publisher or record label will bear the cost of the advance.
Non-returnable advances mean that a recoupable advance paid by the music publisher or record label will not have to be paid back by the creator even if the income does not surpass the advance, so it is an investment into the creator’s career, with the expectation that the creator will succeed and over time generate income for the music publisher or record label justifying the investment.
What are one-off fees?
One-off fees are payments made to performing , , soundtrack and other music creators in return for the use of their performance or musical work.
Such one-time payments to creators can be made against a full transfer of all the rights in the performance or musical work, under so-called or agreements, or as a single fee for single performance or use of a song. While one-off fees can be the right deal for some creators, it’s important that you understand the terms of the agreement and implications for your rights in the musical work or sound recording.
What are remunerations?
Remunerations to music creators occur when collect fees for the use of musical works and sound recordings, and pay rights holders a percentage of what they collected for the use of their musical works or sound recordings.
Remunerations from CMOs are sometimes also called royalties or payments. They are important part of what enables songwriters and performers to earn a living.
Visit our page on CMOs to learn more.
There are many ways musical works and sound recordings can generate income. Keep reading to learn more.
When do music creators get paid?
Different payments occur for different types of in a musical work and sound recording, and under various circumstances.
Typically, all this happens when income is generated from a musical work being performed or a sound recording being played, streamed, downloaded, or sold in physical formats such as CDs or vinyl. These are just a few examples, and there are more ways income can be generated. Keep reading.
Visit our topics on Music Creators’ Rights, Rights Transfer and Licensing, and Scope of Protection to learn more about rights.
The main types of rights generating payments for the use of musical works are:
Mechanical rights renumerations are paid to the rights holders of the musical work, whenever it is and , most of the time in a sound recording. This usually happens, for example, when the sound recording of the musical work is streamed, downloaded, or purchased as a .
Performing rights renumerations are paid to the rights holders of the musical work whenever it is performed publicly. Performed publicly means being played live or communicated to the public as a sound recording played on radio, TV, streaming services, in bars or restaurants, for example. These are sometimes also paid by music publishers to songwriters as royalties under their publishing agreement.
Synchronization rights are usually purchased or licensed against a one-off fee paid to the rights holders of the musical work whenever it is used with audiovisual media, for example, film, TV programs, video games, and websites. This could be by recording the musical work specifically for that use or by using a pre-existing sound recording of it.
Grand rights also are usually purchased or licensed against a one-off fee paid to the rights holders of the musical work whenever it is performed in the context of a dramatic performance, such as a stage performance, dance, or musical theatre production.
Print music rights remunerations or royalties are paid to the rights holders of the musical work. They are generated through the sale or use of the printed or digital sheet music or lyrics/of a musical work.
The main types of rights generating payments for the use of sound recordings are:
Related Rights—also known as neighboring rights, or rights under copyright law—royalties, remunerations, advances and one-off fees, are paid to the performers and other rights holders for the use of their performances and sound recordings, typically the artists, session musicians, and record labels. These payments are generated when sound recordings are made, sold, or communicated to the public through , similar to remunerations for a musical work, see above.
royalties or remunerations can also arise every time a video clip, movie or TV program using the sound recording is made available to the public. Most recording artists are paid royalties under their recording agreements and are entitled to performing rights remunerations.
Artists performing live are usually paid a one-off fee, as are some session musicians when contributing to the recording of a song.
Master rights royalties, renumerations and one-off fees are paid to the rights holders of the master rights in the sound recordings, typically record labels or artists, whenever their sound recordings are reproduced and distributed. Master rights are a subset of related rights, explained above, but can also be called copyright in countries.
You can learn more about rights and licensing in our Music Creators' Rights and Rights Transfer and Licensing topics.
How are payments to creators calculated?
How much creators get paid depends on many factors, especially the agreements between the various parties participating in the creation of a musical work or sound recording. So, most of the payments are a matter of negotiation, first as a result of with other songwriters or performers, as well as with any music publisher, record label, or distributor with whom you might have a deal.
And each country has its own copyright law that may impact when, to whom, and how much remuneration and other payments are due. may also have different rules or policies that affect this.
To find out more about remunerations and other payments you are entitled to as a music creator, contact your local CMO or your music publisher or record label representatives.
Quiz
Test your Royalties, Advances, One-off Fees and Remunerations knowledge
Image credit: Jacob Vidkjær, Playminds