Entertainment Law: Understanding Royalties & How to Apply Them

 

Tools For Success: What Royalties Are & How They Can Benefit You

By Emily Kulinowski

According to an annual report by The Recording Industry Association of America, roughly 84% of revenue in 2021 came from streaming.

Musicians release their music to their audience in a variety of forms, and it’s important to receive funds when others use it. Applying for royalties is essential in order to not only establish you as the rights holder but to gain compensation when you let other people use your music.

What Are Music Royalties

Soundcharts defines royalties as “compensatory payments received by rights holders (songwriters, composers, recording artists, and their respective representatives) in exchange for the licensed use of their music.”

Music royalties are essentially the money a rights holder receives from institutions such as radio stations, venues, and TV channels for allowing them to use their music.

The addition of royalties can provide musicians with another revenue stream as the rights holder.

Royalties hold a lot of benefits for musicians, and it’s important to understand how they can help your career in the music industry.

1.Recurring Revenue

As creatives we often find ourselves making our income from a variety of places. Whether it’s gigs, teaching, or entrepreneurship endeavors, it’s important to keep track of where our money comes from.

Royalties are a great way to make passive income. This means that you’re making money without really having to think about it- your music is working for you.

Since royalties are payments made by distributors to rights holders, they can also be helpful in building stable income that investors like to see. Investors like to see a stable income, and royalties can provide a form of recurring revenue that can help you when you’re between gigs.

Even after a project or recording has finished you continue to reap the financial benefits. When you hold royalties, you as the rights holder receive payments when other people use your work. Having this additional recurring revenue is a great way to continue making a small amount of money alongside your main income.

2. Elevates Your Resume

Backing up your music with royalties and licenses can help you land jobs in the future because it shows you have experience and success under your belt.

Showing your music is ranking successfully or being used in other big projects shows investors, venues, and employers that you are a reliable and beneficial investment for them.

With your music registered with royalties you may find more opportunities over time. Never burn a bridge- it’s easier for someone to keep you in mind for a job when they are already familiar with you and your work.

You can use these previous experiences to gain more opportunities and show future employers that you are an asset and can provide financial and societal success for their organization.

How Royalties Work- The Den Collective

How Royalties Work- The Den Collective

3.Control Over Use

As the rights holder you hold the rights to your music, and that means you can have control over how your music gets used. 

Synch royalties occur when music is paired with visual media. Rights holders have the right to use their music in all forms of media from film, commercials, video games, etc.

If someone wants to use your music in their media they will can to get approval by you as the rights holder. If you don’t want to be associated with a project you don’t have to approve.

Performance royalties are also very common as they cover live performance, recordings, streams, or public plays. When businesses play music over the radio system that is considered public performance.

Print royalties aren’t as common, but these allow musicians and composers protection over the usage of their printed music. You can have control over how publishers and distributors use your music.

Having a say in how your music is being used outside of your personal use is important in controlling your image and career in the music industry.

4.Keeps Your Music Alive

Musicians create a large amount of music during their career. Oftentimes some of your music can be forgotten over the years. 

Royalties and licenses allow your music to thrive through other avenues. Tik Tok is a great example of this because many older or forgotten songs are trending on the app. 

Movies are also a great example because it gives an opportunity to bring music back to life. We get to relive old albums through new projects and apps is a great way for your audience to engage with some of their favorite music from you.

While making money from royalties is an obvious benefit, the longevity they can provide is an even greater advantage for musicians.

How Royalties Can Benefit You

Throughout your career there will be a lot of instances where your music is played or performed by someone other than you. Having your music registered with royalties will allow you to receive the necessary compensation for the usage of your music.

There are many benefits to registering your music with royalties, and understanding how they work can help you make the most of them.

The Den Collective partners with our entertainment lawyer Max Hass to provide sessions and resources on entertainment law. More information on Max’s upcoming series covering copyright & contracts can be found here. More about our resources in The Den can be found here.

Ensuring you are paid for the use of your music is essential in maintaining your career in the music industry. Myself and The Den Collective are here to support and help in any way we can!

 
Entertainment Law, Tips & AdviceEmily KulinowskiEmily Kulinowski, entertainment law, entertainment lawyer, royalties, recurring revenue, how royalties can benefit you, what are music royalties, music industry1 Comment