🎼What are music royalties?

Before we try to understand music royalties, let us first understand what royalty is. A Royalty is a fee that an asset owner charges when someone uses their asset. They can also set a royalty interest, a particular share of the profit, that they will receive whenever someone gains profit from their work. As you are using someone else’s work, you will have to pay for its rights.

Music royalty is revenue generated every time a music creator's intellectual property is used. In other words, royalties are remuneration for the consumption of music.

For example, royalties will be generated when a song is streamed on Spotify. Spotify has to pay rights holders for various different types of royalties.

In the music business, royalties are one of their main sources of earnings. They make up a significant slice of the music industry, as a kind of passive income.