Just as constitutional rights protect the normal citizens of a country from oppression, the individuals who compose, write and record music have rights to protect the acts of their creation. In the absence of these rights, those who have dreams of focusing their energies and talents into creating music would be economically unable to that. This outcome would inadvertently shrink the artistic expression that exists today as well as that of the future generations. This paper aims to look at the universe of music royalties and explore some of the financial and business related issues of this industry. It aims to look at how music creators make money in this industry.
Royalties refer to the money that an artist makes through the legal use of his or her music. There are various ways in which music royalties result. A recording artist for example earns royalties when their recordings are sold in the form of cassette tapes, CDs amongst others. Contrary to popular thinking, recording artists do not earn royalties when their music is played through public means. For example, an artist does not make any money when their music is played on TV, on radio or even in restaurants and bars. This is a practice that has been long standing and that has largely drawn its basis from copyright law. In addition, one general agreement is that when radio and TV stations air an artists’ music, the artist is bound to sell more tapes or CDs. However, songwriters and song publishers earn royalties in such instances. The only instance where recording artists can early royalties from “public performances” is when this takes place through a digital platform. This can, for example, be through satellite radio or webcast.
Royalties also arise from music licenses. There are several types of music licensing and a corresponding royalty accompanies each one.
The first licensing is called mechanical licensing. Mechanical licenses usually refer to the permissions that are granted to second parties to mechanically reproduce music composed and recorded by an artist onto some physical media form such as a CD, a tape and so on, for the purpose of public distribution. The publisher of the music gives permission for reproduction of the music to take place. In this case, the corresponding mechanical royalty is usually paid to the songwriter, the recording artist and finally the publisher. The amount paid is dependent on the number of recordings that have been sold.
The other music licensing form from which royalties can arise regards performances. This license allows recorded music to be broadcast or performed live. In many instances, the performance rights license is usually in a “blanket license” form whereby the licensee is granted the rights to play a certain artist's collection for a certain fee. Individual recording license also exists. However, it is important to note that the performance royalty is only paid to a songwriter as well as the publisher when a particular song is performed on a live stage or media such as radio.
The other license from which music creators earn royalties is referred to as the synchronization license. This is a license required for musical compositions to be reproduced into a film, a television program, radio voice and television voice-overs, videos and even for phone calls and phone messages. It is called this because by using the music, one is essentially “synchronizing” the musical composition as the composition is performed on an audio recording to a TV commercial, a film, a video and voice- overs. Of one decides or wishes to use a distinctly recorded version of the song, one has to get permission from the artist’s record company. The permission is granted through a license referred to as a “master use." Synchronization royalties are usually paid to song publishers and writers when a song is used as background music for TV shows, movies or commercials.
The other royalty that is usually not very common is the one for prints right. This royalty is usually paid to music publishers and writers based on published on printed sheet music sales.
In addition to the royalties mentioned above, manufacturers of audio recording devices, especially the digital ones, as well as the makers of blank recording devices such as blank CD’S, DVDS and tapes are required by music copyright law to pay a particular percentage of their total sales to the country’s “Register of Copyrights." The purpose of this is to possibly compensate for the sales loss that emanates from unauthorized and illegal music copying.
As observed, there are is a wide variety of royalties that exist within the music fraternity. Most of these royalties, which usually stem from different modes of music licensing, ensure that artists are recognized financially for their acts of creation. However, the recent emergence of the internet has posed a serious challenge to music copyright as anyone who has access to the web can easily download free digital music and listen to it on the same electronic device used to download it. This translates to huge losses for artists, recording companies and distribution companies lose a lot.
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Hurst, Walter E. The Music Industry Book: Protect Yourself Before You Lose Your Rights & Royalties. Hollywood, CA: Seven Arts Press, 1981. Print.