In our previous lesson, I explained the concept of music streaming royalties, the mode of operation and many more.
Also, the difference between music right and streaming royalties were clearly explained in our previous lesson.
In this very lesson, I would be explaining the types of music royalties in details.
READ: Streaming Royalty Calculator For Digital Music Streams (How To Calculate Earnings)
NB: Information pertaining to music royalties is somewhat complicated , sometimes same type of royalty can be paid in a different manner, depending on the context of use.
Now, lets begin with our topic, types of music streaming royalties.
Basically, there are six (6) main types of music royalties.
1. Streaming Royalties
Streaming Royalties are the royalties that a musician makes once his/her songs are steamed/played on streaming platforms like spotify, itunes, google play, pandora, tidal, Shazam, boomplay, audiomack, soundcloud, apple music and many others.
NB: One must sign up with music aggregators or distributors in order to get their recordings (Songs) copyrighted and monetized on the digital music streaming platform.
2. Mechanical Royalties
Mechanical Royalties are the type of royalties Musicians make anytime their copyrighted composition is duplicated or reproduced and distributed in either physical or digital form.
Example includes; the reproduction of cassette, compact disks (CDs), copying or downloading of songs, Vinyl, amongst others.
3. Neighbouring rights and Royalties
Take note, there are two basic types of copyright in music;
a. Composition right
b. Sound recording right
Neighbouring right is very similar to public performance royalties, except that the royalties of neighbouring rights are paid out to the copyright holder of the sound recording, performing artists and or recording labels.
Neighbouring right royalties are collected by Publishing Right Organizations (PROs), such as Ascab, BMI, SESAC, PRS, etc in their respective market, and then distributed to sound recording owners.
In most part of the world like Ghana, terrestrial radio does not Compensate sound recording owners – whereas airplay in other countries does generate neighbouring royalties.
4. Public Performance Royalties
Public performance royalties are royalties that are collected when portion of a song composition is featured or played in a commercial environment.
Public Performance Royalties can be categorized into two main sessions;
a. The royalties paid by music streaming services.
b. Royalties generated by conventional public broadcasters such as Tv channels, clubs, pubs, radio, restaurants, venues, etc.
The Public Performance Royalties are also managed, collected and distributed by Publishing Right Organizations (PROs).
(Public Performance Royalties have a broader concept beyond this article, In our next article Kingsmotion would give a detailed account on how it works and how artists can patronize to increase their earnings).
5. Sync Licencing Fees
Sync licensing fees are paid out when music is synchronized to any other type of content, including video content for ads, TV shows, movies, video games, and — though this is pretty rare — audio-only sync. Anytime a song is used memorably as a component of any other type of content.
In order to sync a song, music users need to get a license from both sound recording and composition owners — accordingly, the owners of both subsets of music copyrights earn money on sync licensing (which makes sync licensing different from other types of royalties).
6. Digital Performance Royalties
Detail explanation would be given in our next contest due to the nature of its operation.
