Introduction to Music Royalties

Royalties are how musicians can earn money for a living. If you are a musician, you need to understand this in order to support your career in the long run. 

Learning about music royalties allows you to estimate how much money you should be earning from your creations. Musicians who work under a record label will generate royalties differently than independent musicians.

What are music royalties?

Music royalties are payments that the track’s copyright holder receives. The copyright owners can be songwriters, recording artists, recording labels, and composers. Anything related to music royalties is regulated under copyright law to protect the artist’s works.

Types of music royalties

Mechanical royalties

Physical or digital production and distribution of copyrighted songs will generate mechanical royalties. This royalty type includes various music formats, such as vinyl, CD, digital download, and other forms of published works.

If you are a musician who signed with a label, your record label will pay your mechanical royalties. Besides that, if you are an independent artist, you will need to cooperate with music distribution services such as CD Baby, Ditto, or Distrokid to receive mechanical royalties.

Performance royalties

The copyright owners will get performance royalties when copyrighted songs are performed, played, and streamed in public. For example, when a restaurant plays the song Home by Michael Buble, every song’s copyright holder should be receiving royalties. This happens because any music played in public places is considered a mini-performance which obligates the management to pay commissions.

The same regulation applies to terrestrial radio stations, televisions, shopping malls, and other public spots that stream music. Public Performance Organisation (PRO) serves as middlemen that deliver royalties to the songwriters and publishers when their works are broadcasted to the public.

Synchronisation royalties

Synchronisation royalties are obtained when the copyrighted music is paired or synched with visual media. However, synching music with visual media requires a synchronisation license before using the music in films, televisions, commercials, and other types of visual media.

Print music royalties

Print royalties are payments that are typically delivered directly to the publishers. This kind of royalty is commonly received when the copyrighted music is reproduced into a printed media. The formats can vary from musical notation to song lyrics or both of them.

Once the publishers have collected the royalties, they will distribute the fees to the copyright holders based on the number of copies sold.

How do music royalties work? 

It has been discussed before that music royalties are earned every time people use copyrighted songs. If you are a musician, you deserve to get the payments when your music is broadcast to the public, such as streaming services or radio. Besides that, you also deserve the commissions if someone wishes to record and distribute a cover of your song.

Music royalties rely heavily on the copyright laws that regulate the permissions to use and remake. The rules exist to protect the artist’s works because they are considered as intellectual properties. Two types of copyrights are attributed to the music industry, which we will discuss below.

Sound recording copyrights

Sound recording copyrights, also known as master copyrights, belong to the owner of the master sound recording. The rights can belong to the artists, record labels, recording studio, or the parties that finance the recording.

Master copyrights stand as its intellectual property because when people remake a song, the recording, the artists, studio, and time will be different from the original ones.

Songwriting copyrights

Songwriting copyrights are given to anyone who contributed to the song’s creation. The parts include the notes, melodies, chords, rhythms, lyrics, and the other pieces that support the original recording. 

Exclusive rights of copyright

Copyright law in Singapore protects the owners by giving them a bundle of rights. Providing copyright holders with some exclusive rights is one of the strategies.

Here is the list of copyright owners exclusive rights:

  • Reproduce the original work
  • Publish the original work
  • Perform the original work
  • Communicate the copyrighted work
  • Adapt and create variations to the original work

These exclusive rights are commonly given to the author of the work. However, this is not always the case. The author may have sold the copyrighted work to another party, which they have agreed to lose their rights over their creations. Hence the law will adjust based on the situation. 

Who receives profit from music royalties?

Songwriters

Songwriters are the artists who compose the music and write the lyrics of a song. Songwriters can receive either mechanical, performance, or synchronisation royalties. The royalty they receive depends on the usage of their music. 

Ownership percentage will be applied if multiple songwriters contributed to a song. It is also known as a split sheet, where they have a written agreement on how much each songwriter will receive from their music. 

Publishers

Publishers can either be a person or company responsible for ensuring that the copyright holders get paid for their music. A music publisher will obtain the songwriting copyright in exchange for royalties.

Publishers are also responsible for issuing licences for people who use the music they represent. They monitor and collect the licensing fees. The publishing royalties will get split between the publishers and the songwriters.

A non-profit organisation named Music Publishers (S) Ptd, or MPS, serves as Singapore’s representative music publishing company. The 12 music publishing companies in Singapore collectively control the music copyrights and associate with MPS.

Record labels

Record labels will market and distribute the artist’s original work. It’s common for record labels to obtain the master rights, but they are not eligible for the publishing rights. 

Record labels generate income from mechanical and public performance royalties. They issue contracts that allow them to use the recordings in exchange for royalty payments. The artist will then receive a flat rate or percentage of these record label royalties. 

Digital music distributors

Digital music distributors help independent artists and labels to get their music on online music stores and online streaming platforms. Digital music distributors can release music on Spotify, Apple Music, Beatport, and other streaming platforms. 

Digital music distributors will collect mechanical royalties for every music purchase, stream, or download. They will also collect performance royalties when your song is played in public places or broadcast on the radio.

Performing artists

Performing artists are people who perform the original work. They are not eligible for publishing rights unless they are also songwriters.

For example, performing artists can be those who only sing a song created by other artists. This commonly happens for musicians who haven’t developed their composition talent, yet they can still play the music that was composed and written for them.

Mechanical rights agency

Mechanical rights agencies will manage the mechanical royalties for the music publisher. They also issue the rights to anyone reproducing and distributing copyrighted musical compositions.

Sync licensing agency

Synchronisation licencing agencies have the right from record labels and music publishers to issue licences for synching music with visual media. They will distribute the synchronisation licence royalties to the master copyright holders. 

Sync licensing agencies typically work with music supervisors who work in the same field. These types of agencies serve as middlemen between the artists and the companies or directors licensing the music. 

Copyright registered by MRSS

Music Rights (Singapore) Public Limited or MRSS is authorised Singaporean music right and licensing company. As a collective management organisation (CMO), MRSS collects music and music video copyrights for its members, who are typically music producers. 

Furthermore, MRSS works closely with the Recording Industry Association of Singapore (RIAS). The organisation is responsible for being the official administrator of copyright licenses for any commercial uses of recorded music and music videos. They require anyone who wishes to sync music to visual media a synchronisation license from them. 

Here is the list of musical rights that are protected under MRSS’s copyright law:

Public performance rights

Public venues such as shopping malls, retail stores, restaurants, and cafes need to own MRSS’s license to play music in their place.

Reproduction rights

Entertainment centres such as karaoke bars and pubs must have an MRSS license to play video-on-demand on a TV monitor. The regulation applies to any form of music video that was previously re-recorded and reproduced on a computerised storage system.

Simulcasting and webcasting rights

Transmission of music videos on cable/IPTV and audio content on the internet requires MRSS’s license too. The regulations also require MRSS’ licence for re-recording and reproduction of music videos on cable/IPTV. 

Home karaoke and music video rights

Home karaoke systems retailers will need the content to be licensed by MRSS.

Communication rights

Communication rights require any electronic transmission of a sound recording or music video with an MRSS licence. Songs and music videos will be made available online once the licence is granted. 

You can learn more about Singapore’s regulations on copyrights and licenses by accessing MRRS’s website here

Copyright and licensing breakdown

Every piece of music registered in the PRO will be considered copyrighted works. The regulation disallows the use and distribution of copyrighted songs without any permission from the copyright holders. 

Anyone intending to use a musician or other artist’s work for commercial purposes is required to have a licence. That’s why it’s important to know the difference between copyright and licensing. 

Copyright

There are two types of music copyrights, they are master recording and songwriting copyrights. When a song is aired in public, the master recording artists and the songwriters deserve payments regarding the distribution of their works.

Licensing

Licensing relates to the permission of the music usage, commonly for commercial purposes. Anyone who wishes to use someone else’s intellectual property is required to apply for a license. Once the license is granted, the users are allowed to use the songs to support their projects, and the copyright owners can receive their payments.

Conclusion

Now that we have discussed how musicians earn income from royalties, you should have a better understanding of how you can receive more payment from your work. You may also realise that their commissions are generated from various sources, such as copyrights and licenses. 

If you are a musician or an aspiring artist, you can opt to register your intellectual property to the copyright companies. Once your works are registered, every party involved in the music-making process will get their payments through royalties. 

The amount can be negotiated and determined through a legal agreement. Think thoroughly during the process to ensure the results will suit your ideal.

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