The 4 Different Types Of Music Publishing Royalties And How They Differ

Considering the complexity of the different types of royalties in the music publishing landscape, it is almost impossible to survive without the support of dedicated catalogue management and royalty accounting software. With more active players than ever, the music industry generates different types of music publishing royalties all the time, which might be received in different formats and at different intervals. Curve can streamline these processes: from ingestion of the royalty files to calculating specific royalty rates for each different right type, to ensure accurate and transparent reporting to rightsholders.

These are the four main royalties in music publishing:

1. Performance Royalties

Performance rights refer to compositions (songs) being publicly performed. Live performances, airplay on radio or TV, and even streaming, are examples that generate Performance royalties. Performance royalties are managed by performance collection societies in each territory, also commonly referred to as Performing Rights Organisations (PROs). These organisations are government-mandated to manage the performance royalties within their borders, and reciprocal agreements between these PROs mean all catalogue is globally represented and royalties are collected and paid. PROs pay the publisher and the writers directly, essentially splitting the royalty due between these parties. The common split is 50/50, but some PROs have their own splits, which usually lean in favour of the writers.  Performance royalties are an essential part of a publisher's royalty distribution, and the royalty files for this income type can get rather big! With a software solution like Curve, processing and matching these royalties will be automated to save the headache of manual matching, calculations and royalty rate calculations.

2. Mechanical Royalties

Mechanical royalties are the traditional bricks and mortar of the music industry. They are due whenever a song is reproduced, whether that's on a vinyl, CD or even in a stream. In principle, Mechanical rights are a fairly simple concept. However, the execution and management of these rights vary around the globe, making them the most complex of all royalties in music publishing.  Each territory has mandated mechanical collection societies that collect mechanical royalties on their members’ behalf. As a publisher, you might receive your royalties from different parties: in some territories, labels pay these royalties directly to the publishers, but in others, the labels pay the royalties to the collection society, which then pays the publisher. To make matters even more complex, each territory can have its own calculation basis and rate for mechanical royalties. These complex rules can easily lead to incorrect royalty processing if all these rules have to be applied manually.

Software such as Curve can navigate the complexities of mechanical royalties with ease. Labels are relieved of the time-consuming manual task of calculating and distributing their mechanical liability, while publishers can easily ingest the royalty files they receive and pay these mechanical royalties to their rightsholders efficiently and accurately.

3. Synch Royalties

The name Synch comes from the word Synchronisation, which gives a hint to what these royalties are for: they are for the synchronisation of music and (moving) picture, such as film, TV shows, adverts and games. When music is used in any of these media, a synchronisation fee needs to be negotiated. These fees are decided between the producers of the images, often with the help of a music supervisor (internal or external) who will find the music, negotiate the fee, and the rightsholders. When music is used in a sync project, a deal will need to be made with both the master and publishing rights holders, and the resulting royalty is payable directly to them. These fees are a lucrative income stream for rights holders: statistics suggest that synch royalties now account for 17% of music publishing revenues. It's no wonder many labels and publishers have their own teams proactively pitching songs to be used for synchs!  

Because these royalties are payable directly from the producers to the rightsholders, there often aren't any royalty files associated with the fee. This makes it hard to include those royalties in your statements in an accurate and transparent manner. Curve can ingest this type of music publishing royalties for you in a standardised format, which you can easily ingest into the platform and treat like any other regular royalty file, making the process seamless and easy.

4. Print Music Royalties

Print music royalties encompass any ‘print’ form of music. This can include traditional scores as well as modern digital reproductions. If you ever sing along to songs using Spotify's lyrics feature, for example, that's technically a print reproduction! Less obvious examples of print royalties include merchandise with lyrics on them or the use of lyrics in a book. Since there are many different use cases for print, which are often licensed by the producer of the items directly, royalties might be received at irregular intervals and in inconsistent formats. Curve's software will save you from the nightmare of manually processing these music publishing royalties. Instead you can quickly create royalty files for these royalties, ingesting the royalty files and easily calculating the correct royalty rate for this specific right type.

What Next?

If you want to ensure that the four main types of music publishing royalties and associated reporting are covered, Curve can help. For more information, take our video tour or get in touch with us.