Grand day aSa! If you made it this far I genuinely appreciate you for taking the time to read this all the way to this point! You're a W for that and I hope you somehow get a big bag of money for being awesome. This is the tenth and final helpful tip to consider on your music career journey. Tip ten is to Understand The Royalties Generated From Licensing your music.
Not understanding licensing royalties is like going to work every day and not knowing how the job will pay you. When you own your music, people have to obtain a license to use your music and will pay a fee based on the way in which they use your music.
Royalties can be confusing and complicated but I will do my best to make this easy to understand. There are a few ways you earn money from the use of your music (assuming you own the copyright to the music).
Mechanical License – Needed when someone wants to make copies of your songs or use the song. For example, if I start an online music store and I want to sell your music in my store. I’m going to need a mechanical license from you in order to sell your music in my online music store for digital download, just like iTunes. So, every time I sell a copy of your music in my store, I have to pay you. But I don’t pay you, I pay an organization that collects the money on your behalf. That organization is called The Harry Fox Agency. That’s a summary of the mechanical license.
Performance License – Needed when someone wants to play your music for other people. For example, if I started a streaming service and I want to let people stream your music in my streaming service, I need a performance license from you in order for me to legally make your music available for streaming on my platform, just like Spotify. I have to pay you a royalty, but I don’t pay you; I pay an organization that collects the money on your behalf. You’ve probably already heard of them ASCAP, BMI, and SESAC. That’s a summary of the performance license.
Synchronization License – or sync license is needed when an entity, like a corporation, movie studio, or advertising agency wants to use your song to be ‘synchronized’ to a video. For example, think about some of the songs you hear in movies, TV shows, commercials, and video games. The companies that produce those had to get a sync license to use the music you hear in the content. They typically would pay a flat fee for the sync license. That’s a summary of the synchronization License.