Music Royalties in African Music – Part1
Recently, Nigerian Artist, Mr Eazi publicly stated that he wants his fans to benefit from his royalties. The fans of an artist account for more than half of the royalties that an artist will earn.
Mr Eazi’s offer allows his fans to earn as well whenever they stream his song, the same way he earns. Sounds exciting? Yeah, it does.
Music royalties are payments received by rightsholders (artists, labels, songwriters etc.) in exchange for the right to use their intellectual property (which in this case is the song). The money is distributed between the rightsholders based on the agreements between them.
Royalties are, however, not as straightforward as you may believe. Different types may accrue to a song, which will be distributed to various rightsholders.
Not all royalties which a song generates goes directly to the artist. Some are collected by the Performing Rights Organisation (PRO) or Collective Management Organisation (CMO).
They then distribute it to the rightsholders, often the record label (where the artist is signed to one), and the publisher.
To demonstrate the concept behind royalties, see the illustration below.
Mr A has a female dog (Lavish) which he wants to breed. He enlists his friend Ms B who has experience in breeding female dogs and selling their puppies. Ms B agrees to help Mr A if she gets half the price for each puppy.
Ms B contacts her colleague Mr C who has a male dog (Cyprus), and he agrees to let Cyprus mate with Lavish if he gets 10% commission of each puppy.
After a successful mating process, Lavish produces 7 puppies, and each is sold for £1,000. The parties involved will share the £7,000 based on the agreed percentage. In the end, Mr C gets £700, while both Mr A and Ms B get £3,150.
Music royalties are quite similar to the illustration given above. Mr A is the artist/songwriter/, and Lavish is the talent. Ms B is the record label who has experience in monetising the talent while Mr C is a third party which assists in monetising the talent. The puppies are the finished musical work, which can be sold/consumed.
When the profits come, each party gets their share, based on the agreement between them and the rights they hold.
As stated earlier, music royalties are not so straightforward. A significant reason for this is that there are two different rights in a single song – the Composition/Publishing (the harmony, melody and lyrics, the SONG) and the Master (the song’s sound recording).
Understanding this is crucial as each of these rights attract different royalties.
The different music royalties that can be accrued to a musical work are:
- Mechanical Royalties;
- Public Performance Royalties;
- Synchronisation Royalties;
- Neighbouring Rights Royalties;
- Streaming royalties;
- Digital Royalties;
- Sampling Royalties; and
- Print Royalties.
Each of these royalties is gotten from either one right or both. For example, Public Performance Royalties are earned on the composition/publishing rights and collected by the artist’s publisher. At the same time, Neighbouring Rights Royalties are paid to the sound recording rightsholders (often the record label).
On the other hand, Streaming Royalties are accrued on both rights, i.e. the composition/publishing and the sound recording. In contrast, Synchronisation Royalties can be accrued on only the composition/publishing or both, depending on the circumstances.
In the next article, we will discuss each kind of royalties accruable to each musical work.
Lastly, stay up to date with all you need to know about African music at SOA, right here.
I am a Nigerian qualified lawyer with over 3 years of post-qualification experience. I’m an alumnus of the University of Lagos and the Queen Mary University of London where I completed a master’s degree in corporate commercial law with a distinction. I’m also a drummer, a lover of dogs and an avid gamer.
Over the years, I have offered corporate and commercial services to companies, businesses and start-ups and provided advisory services to artists and record labels. I currently work with Laude London, a music management consultancy firm which offers publishing, sync placement, branding, and A&R services to artists.
Music Royalties in African Music
