Beyond concerts and performances, musicians have an alternative avenues to make money. Among the avenues is through large infrastructures in place designed to collect earnings for singers enabling them collect passive revenue.

The money made out of such means are referred to as royalties and it is one of the ways musicians can make money.

This guide provides an insight into royalties.

Music royalties are payments that go to recording artists, songwriters, composers, publishers, and other copyright holders for the right to use their intellectual property.

Music royalties are also generated for various types of licensing and usage. The main royalty types include mechanical, public performance, synchronisation. Royalties does not only work for music but also other copyrighted works.

Mechanical royalties generate music income for the physical or digital reproduction and distribution of copyrighted works while public performance royalties generate music income for copyrighted works performed, recorded, played, or streamed in public.

Synchronization royalties generate income for copyrighted music paired or ‘synced’ with visual media. Sync licenses grant the right to use copyrighted songs in films, television, commercials, video games, online streaming, advertisements, music videos, and any other visual media.

For print royalties, they only apply to copyrighted music transcribed to a print piece such as sheet music and then distributed.

How artists benefit  from royalties

Given the nature of the royalty industry, there are many different parties with fingers in the pot: some rights holders who are the final destination of the royalties, and some middlemen who collect royalties on behalf of rights holders and take a cut.

Recording artists are partial owners of a master recording. They get a share of all royalties on the master side; this includes the featured artists, who get the bigger share of the royalties, as well as non-featured artists. The exact percentage of the royalties that recording artists receive is determined by the deal they signed with the record labels and distributors.

Among the royalties that recording artists receive is streaming royalties, neighboring royalties, digital performance royalties and sync licensing fees (master use license).

Artists split the earnings with their recording rebels since they have a deal in place. Among the parties who get a share on royalties is the distributor.

Their job is to get an artist’s music onto the digital streaming platforms, promote the artist’s content and make it visible across the digital storefronts, and collect streaming royalties on behalf of the artists. In exchange — just like the PROs on the composition side — distributors take a percentage of the royalties or a flat fee for each payout.

In 2019, Rwandan artists also requested that concerned authorities necessitates consumers to pay royalties.