Composers are sometimes commissioned to produce a piece of music and they will earn a commissioning fee up front. Sometimes that will be supplemented down the line by royalties. Most composers don't get an upfront fee and their income is based entirely on royalty income. Royalties are the payments due to the artist for each time their work is used. Quite often, these can be very small amounts, but if there are many uses, then they add up. Hopefully it is enough for a composer to make a living, but not always. Each time a work is heard on the radio, for example, there should be a royalty paid by the broadcaster to PRS, which is then passed on. With a CD there is a fixed royalty. It's something like 6.5% of the retail price of the CD is paid to the publisher by the record company through MCPS, which licenses it. That 6.5% is then paid on to the publisher who passes on a share to the composer in accordance to the agreement between the composer and publisher. So if you think of a CD, these days a CD costs less and less. It is not a lot of money.

– Sarah Faulder, Chief Executive, Music Publishers Association

Royalties in music are income derived from the copyright of a musical work. This income is derived in a number of different ways. These include:

When a concert work is performed then income is received through a charge made by the composer/publisher for the performing organisation (eg. orchestra) to hire the performing materials. If the work is registered with the PRS for Music, then performance income is also received from the PRS (or from its affiliated societies in other countries if the performance is outside the UK). The composer and publisher will each receive their respective shares of performance fees directly from the PRS.

When a concert work is recorded then income is received through a charge made by the publisher for the performing organisation (eg. orchestra) to hire the performing materials for the recording. The recording company is also obliged to secure a mechanical license for the recording, paying a standard royalty per copy sold, and income from this is distributed to the composer/publisher.
When an opera or other dramatic work is performed, or when a concert work is used in a dramatic context such as a ballet, the PRS will not collect or pay out performance royalties and the composer or publisher will charge the performing organisation directly. Dramatic performances where performers move around the stage are generally classed as grand rights, which indicates this direct charge from the composer/publisher rather than payment via the PRS. The charge can be a fixed sum or, more often it is a percentage of the box office income for the event. Recordings of dramatic performances are also licensed directly by the composer/publisher.

Income is received from the PRS for broadcasts.

A charge is made directly by the composer/publisher for synchronization usage (ie. use of music as the soundtrack for a film or advertisement).

When a work is published for sale then the publisher pays the composer an agreed percentage of the retail price for each copy sold.  

Emma Kerr

Contributed by: Emma Kerr, Head of Promotion at Boosey & Hawkes Music Publishers

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