Royalties - GTIMUSIC

The Types and the collection
Types of Royalties
• There are different types of royalties.
• Each is derived from a separate and distinct
Types of Royalties
The four potential sources of royalty revenue in the
music recording and publishing industry are:
• Mechanical Royalties
• Public Performance Royalties
• Synchronization Fees
• Print music income
Mechanical Royalties
• Mechanical Royalties arise from the Mechanical
Licence. Originally when a recording was
reproduced it was done mechanically, using
mechanical piano rolls.
• This is the licence to reproduce copyrighted works
on a sound recording.
– the recording of composed music on CDs, tape or
digital format
Mechanical Royalties
• Writer/Publisher Mechanical Royalties
– Paid by the record company to the
– In the U.S.A set by Congress based on a
statutory rate
• Recording artist mechanical royalties
– Between 8-25% of suggested PPD
(published price to dealer – whole sale
unit price)
Mechanical Royalties
• In the UK the mechanical royalty rate is 6.5% of the
retail price or 8.5% of the published price to dealer
• In Europe the mechanical royalty rate paid to the
publisher is about 6.5% on the PPD.
What is covered by mechanical royalties?
• Mechanical reproduction used to mean a physical product
such as vinyl, cassette tape or CD, DAT, Minidisc.
• In the digital era music is delivered by other means, such as
download of a computer file containing music onto an MP3
player or computer hard disk.
– This is treated as a physical reproduction as accepted
in the EU and confirmed in the 2003 amendment to
the 1988 Copyright Designs and Patents Act.
Collection Agencies for Mechanical
– PRS for Music (UK)
– MCPS (Ireland) (via IMRO)
– HFA – Harry Fox Agency (USA)
– SACEM (France)
– GEMA (Germany)
What can the MCPS licence?
– The MCPS issues licences on behalf of most UK
– The MCPS can only licence the mechanical reproduction
of a song if it is a straight cover (a faithful reproduction of
the original by someone other than the original
• If it is not a straight cover the MCPS does not have the authority
to issue a licence – permission has to be asked from the writers or
Public Performance Royalties
• Public performance royalties are paid by music
users for songs in the operation of their
businesses and broadcasts based on the exclusive
right to perform publicly copyrighted works.
• They are paid to songwriter/publisher
Performance Royalties
PROs (Performing Rights organizations) collect royalties for songs they
– IMRO (Irish Music Rights Organisation)
– SESAC (The Society for European Stage Authors and Composers)
– BMI (Broadcast Music, Inc.)
– ASCAP (American Society of Composers, Authors and Publishers)
– PRS for Music (UK)
– SIAE (Italy)
– GEMA (Gesellschaft für musikalische Aufführungs- und
mechanische Vervielfältigungsrechte) (Germany)
Synchronization Fees
• They are paid by music users for synchronizing music with
their visual images based on the exclusive right to
reproduce and distribute copyrighted works and to prepare
derivative works of copyrighted material.
• Due to composer/songwriter or publisher
• These are strictly contractual in nature and vary greatly in
amount depending on
– the subjective importance of the music
– the mode of production
– the media used
• The royalty payable is that of mutual acceptance but is
conditioned by industry practice.
Types of Royalties
• Print music income: paid by music printers for
sheet music and folios based on the exclusive
right to distribute copies of copyrighted material.
Music Publishing Organizations
• Music Publishers' Association of the United
States (MPA)
Examples of Music Publishers
Breitkopf & Härtel
Universal Music Publishing Group
EMI Publishing
ATV Music (Michael Jackson’s company which
owned most of the Beatles copyrights)