Royalties are how musicians can earn money for a living and support their careers 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; copyright owners can be songwriters, recording artists, recording labels, and composers – there is a copyright law regulating and protecting an artist’s works, including music royalties.
Types of music royalties
Mechanical royalties
Physical or digital production and distribution of copyrighted songs will generate mechanical royalties including 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; as 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
A copyright owner earns performance royalties when people perform, play, and stream their copyrighted songs in public.
Any music played in public places will obligate the management to pay commissions as it will automatically be a mini-performance. For example, a restaurant plays the song Home by Michael Buble, so the song’s copyright holder should be receiving royalties from this.
The same regulation applies to terrestrial radio stations, televisions, shopping malls, and other public spots that stream music. Broadcasting a songwriter’s or a publisher’s work publicly, Public Performance Organisation (PRO), who serves as a middleman, will deliver royalties to them.
Synchronisation royalties
An artist obtains synchronisation royalties when their copyrighted music undergoes pairing or syncing 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
When someone reproduces a publisher’s copyrighted music in printed media, they will receive print music royalties. Print royalties are payments that are typically delivered directly to the publishers. 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 sold copies.
How do music royalties work?
As discussed previously, a musician earns music royalties every time people use their copyrighted songs. If you are a musician, you deserve to get the payments when someone broadcasts your music to the public, such as streaming services or radio. Besides that, you also earn 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 rule exists to protect and consider an artist’s works as intellectual properties; for a piece to be a copyright, it must be a sound recording or songwriting in the music industry.
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 intellectual property because when people remake a song, the recording, the artists, studio, and time will be different from the original ones.
Songwriting copyrights
Anyone who contributes to the song creation will receive songwriting copyrights. 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
The author of the work receives these exclusive rights. 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.
If multiple songwriters contribute to a song , they will get an ownership percentage. 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 the public places or radio stations play your music.
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 an 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 protected under MRSS’s copyright law:
Public performance rights
Public venues such as shopping malls, retail stores, restaurants, and cafés 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 available online once the MRSS grants the licence.
You can learn more about Singapore’s regulations on copyrights and licenses by accessing MRRS’s website here.
Copyright and licensing breakdown
PRO will protect every piece of registered music as 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 need 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 – master recording and songwriting copyrights. The master recording artists and the songwriters deserve payments regarding the distribution of their work once their song airs publicly.
Licensing
Licensing relates to the permission of the music usage, commonly for commercial purposes. Anyone who wishes to use someone else’s intellectual property must apply for a license. Once they receive the licence, they can use the songs to support their projects, and the copyright owners can receive their payments.
Conclusion
After discussing how musicians earn income from royalties, you now understand how you can receive more payment from your work. You may also realise that their commissions came 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.
You can negotiate and determine the amount through a legal agreement. Think thoroughly during the process to ensure the results will suit your ideal.
