What Are Sound Recording Royalties?

For most of us, singing or playing an instrument is a pastime with campfires, long drives, and showers serving as our concert venues. But for those with a calling to music, it’s a profession. The difference between enthusiasts and experts includes the practical side of being a creator — like getting paid. Music royalties are among the most reliable sources of income for musicians, and sound recording royalties are essential for performing artists. 

But what are sound recording royalties? This post covers everything you need to know about this form of passive income.  

What are sound recording royalties?

Sound recording royalties are the payments made for the ability to use a specific recorded version of a piece of music. These payments go to the rights-holder(s) of that version. 

There are two major categories of musical rights: composition rights and master/sound recording rights. Composition rights refer to the musical arrangement itself — the orchestration of the notes, lyrics, etc. — and are most commonly held by songwriters. Master/sound recording rights refer to a particular recorded version of a piece of music, and performing artists typically have those. As a consequence, sound recording royalties are usually paid to performing artists. 

While a single type of artistic right — master/sound recording rights — generates sound recording royalties, they actually can refer to several different kinds of royalties. Sound recording royalties can make their way to performers’ wallets whenever: 

• A physical or digital copy of a recording is sold: These are reproduction royalties. It’s important to note that reproduction royalties are distinct from mechanical royalties, which relate to this kind of transaction but connect to the composition rights.  

• A recording is streamed on the internet or played on satellite radio: These are performance royalties.

• A recording is used as part of a multimedia production like movies or ads: These can be synchronization royalties or performance royalties, depending on the deal’s structure.

Now that we’ve defined sound recording royalties, let’s take a deeper look at what kinds of performers receive them. If you’d like to review music royalties in general, check out this blog.

What kinds of performers receive sound recording royalties? 

Music is inherently collaborative — even most self-sufficient solo acts rarely create an entire recording by themselves. As a consequence, many individuals may receive sound recording royalties for helping to bring the performance together. 

Let’s use the pop hit “Love Me Harder” as an example of how this collaboration can break down. The performing artists can include the featured artist — Ariana Grande and The Weeknd — non-featured vocalist — Sibel — and the non-featured musician —  Niklas Ljungfelt. Other contributors, like mixers and sound engineers, can also receive royalties as well if the featured artist requests it.

How much are sound recording royalties?

The types of royalties involved and the deal’s terms determine the size of sound recording royalty payments made to performing artists.

For reproduction royalties, the amount the artist receives varies based on the percentage they are entitled to per copy sold and the number of copies sold. That percentage is negotiable, so a big-time artist like Dua Lipa will have greater leverage than most performers — allowing them to demand much higher royalties rates. 

For performance royalties, the amount the artist receives is also the product of a negotiation, but there are some industry goalposts. Streaming services like Apple Music, for instance, pay creators $0.01 per stream, while Spotify’s range is a bit lower  — between $.003 and $.005. 

For synchronization royalties, the amount the artist receives is — you guessed it — negotiable and is deliverable in a single, upfront payment. The deal’s size is determined mainly by the production’s creative budget and the artist’s notoriety. These payments can range from hundreds to hundreds of thousands of dollars. 

We’ve used the term artist broadly here, but each of the payments above can be broken down further and distributed among the various performers that contributed to a given recording. Featured artists, non-featured artists, and non-featured musicians can all take a slice of the royalty pie, with the size of the cut usually corresponding to the performer’s contribution.  

How are sound recording royalties collected?

While performance rights organizations (PROs) and publishers collect royalties based on composition rights, distributors usually collect sound recording royalties. Artists don’t typically deal with distributors directly, as their label often acts as an intermediary. It is the distributor’s responsibility to collect the royalties due from the record stores, ecommerce platforms, streaming services, and other organizations and return the payments to the label, who then pays the artist. On the other hand, independent artists will need to work with a music aggregator or distributor to collect sound recording royalties.

Your art deserves to be rewarded, and the right partner can help ensure you’re getting the payday you’ve earned.  At Trqk, we understand the difficulties of compensation in this industry because we’re musicians and music execs ourselves. Our experience inspired us to contribute to a more transparent and fair music creator economy through technology. Our platform, TrqkIQ™, combines data science and business intelligence to identify revenue opportunities that others may miss.  

Interested in maximizing your creative earnings? Get in touch!