🎼How do music royalties work?

To start understanding how royalties in music work, you should know a few things about music rights.

First, stop thinking about your song as a single deal. Every song exists in at least two forms.

• Composition - a musical work with or without lyrics

• Master recording

Therefore, music copyright is split into two main sections:

• Publishing Rights, which belong to the owners of the composition.

• Master Rights, which belongs to the owners of the master recording.

Understanding royalties using a simple example of Cover songs.

Let’s say Artist B records a cover of Artist A’s composition. Artist B only owns the rights to his own recorded version of the composition and gets paid royalties for his master rights only.

But, Artist A still owns the composition and earns royalties because Artist B recorded a cover version of Artist A’s song.

This is a simplified example just to give you an idea! You might also need to consider the role of the performers, session musicians, and publishers, as well as any rights of holders who are engaged in the work.

The music royalty revenue flow broadly takes place over three steps :

Step 1: The distributor directly collects royalties from the streamers.

Step 2: The distributor gives the royalties to the music labels.

Step 3: Music labels distribute the royalties among the artists.

If an artist is not with a label, the artist will collect the recording royalties directly from the distributor.