Royalties

Royalties

What are royalties?

Royalties is an agreement between musicians (i.e. writers, composers, etc) and those who want to use their music for their own purposes. Musicians get their royalties by having their music played on TV/film (this would be known as a synchronization fee), radio, record sales (both physical & digital), merchandise & live performance, amongst other things.

Licensing is very important in regards to royalties because if a venue (can also be a public place like a store) plays music, then it's mandatory for them to purchase a PPL & PRS license (read below for more on PPL & PRS). The relevant societies will then collect the money and gives them to the relevant musicians (writers, composers & performers) as royalties.

There are three main collection agencies (In the UK) when it comes to royalties: PRS, MCPS & PPL.

PRS (Performing Rights Society):

PRS collects royalties and pays them to the writer(s) (both instrumentation & lyrics) when a song of theirs is performed live and that doesn't just mean concerts, it also includes if the song was played in the public (radio, TV, etc). Those who write lyrics to songs get a PRS royalties rate of 50% AT LEAST.

MCPS (Mechanical Copyright Protection Society):

MCPS royalties are paid to a songwriter whenever a copy of their song has been made, however if the songwriter is apart of a band, then it isn't unheard of for the songwriter to share the MCPS royalty with the band. However, MCPS royalties can work a bit more complicated and difficult for the songwriter. For example, it can work in ratio of "numbers of albums made:numbers of albums sold" and other ways so it can work in the advantage of the label, especially if they are major.

PPL (Phonographic Performance Limited):

PPL collect royalties from recorded music and distribute them to the recordings artists whom performed on the recording. This also includes sold CD's, music played through TV, radio, etc. If you run a business and you want to play music for the background, you'll need a PPL license if you're going to play music on the grounds of your business (i.e. inside the store) and the employees of the business can be counted as the "general public", so licensing is a MUST for businesses that want to play music.


What is copyright?

The right to prevent other people from copying your work and using it for their own benefits (in this case, recorded music & lyrics), so this allows the copyright owner to do what they want with the work and protect it, however, copyright works differently in the case of songs and recorded songs. When it comes to songs, the initial copyright owners would be the songwriter who wrote the lyrics and composes who wrote the song, but when it comes to recordings, the owner of the copyright would be whomever arranges the recordings (including booking and paying for studio time) and that could be the record label, for example.



The importance of royalties & copyright and what the industry might be like without it

In the music industry, royalties & copyright are perhaps one of the most important things. If the music industry didn't have these two things, in my opinion, it would be a much more crooked & shady industry and law would be much more involved than it is now and it would also be much less appealing.

For instance, why enter an industry doing something that you love when there's a high chance you won't get as much money as you'd deserve or even get any? why enter an industry where there's always a chance you can get screwed by anyone at any moment? why enter an industry where you make a great song and see someone else take credit for it?

When it comes to this topic, the questions can go on and on for days, however there have been some cases in the past & present concerning this specific matter. In my opinion, the following examples can give us an indication of what the industry might be like without things such as royalties, licensing & copyright.

Below is a video about Milli Vanilli and their tragedy (In my opinion, I think wasn't their fault as I felt they taken advantage of, however this happens in the current music industry). However, the reason I shared this was because I felt this can strongly represent of one aspects of the industry, especially if it didn't have the things in questions (royalties, licensing & copyright).

In this case, if the industry didn't have these things, you would have millions of people running around claiming things they can't do (i.e. sing) and get all the credit for it. However, the focus would be more on the labels (especially the major ones) because they would solely take advantage of people that have aspirations and push them into deals that would make them puppets so they sing & dance on stage to pull in money (and I wouldn't be surprised if they chose people who were "eye candy") or they would find talented people who can make hits and push them in a deal where they must work for their label and ONLY their label so you can't work with another, let alone sign with another (look at Ma$e with Bad Boy Records) just so they can fuel income for the label and the worst part of it; none of them will probably get paid. On that note, the industry would be a much more violent place behind closed doors.