Artist’s Performance Royalties
Performance rights organizations track and pay royalties to song writers, publishers, and musicians for use of their works. Royalties are paid to an artist based on a complicated credit system using a formula with weights assigned for a variety of factors, including the following:
- Use: weight based on the type of song or performance (theme, underscore, or promotional).
- Licensee: weight based on the station’s licensing fee, which is determined by the size of the licensee’s markets and number of stations carrying its broadcast signal.
- Time-of-Day: weight assigned according to whether the performances are broadcast during peak viewing or listening times.
- Follow-the-Dollar: factor based on the medium from which the money came (radio play, live performance, TV performance, and so on).
- General Licensing Allocation: based on fees collected from bars, hotels, and other nonbroadcast licensees.
These amounts are multiplied together, and then a radio feature premium is added, if applicable, to arrive at a total number of credits for the particular artist, or his or her credit total for a particular reporting period. Royalties are usually split among the writer, the publisher, and possibly a performer if the writer does not perform his or her own work. The proportion that each party receives is called the share value. All of the money collected for the reporting period divided by the total number of credits for all performers is called the credit value. An artist who wants to figure out what money he or she will receive for a period has to multiply the three factors; credit total, share value, and credit value.
- 1. Ziam wants to know how much his royalty will be for a song he has written. How will it be calculated? Write the steps or the formulas that will be used to calculate his royalty payment.
- 2. Ziam has written a popular song entitled “Going There,” which has been recorded by a well-known performer. He recently received a royalty check for $7,000. If Ziam gets a 0.5 share of the royalties and the credit value is $3.50, what was the credit total that his song earned? Write out the problem in the form of an equation and solve it.
- 3. Ziam quickly published another song, “Take Me There,” that is played even more often than “Going There.” If his first song earns 4,000 credits and his second song earns 6,000 credits, what will the royalty payment be from the two songs if the credit value remains at $3.50?
- 4. Ziam is considering an offer to perform his own songs on a CD to be titled “Waiting There.” In the past he has written, but not performed, his music. If Ziam’s royalty is 0.12 of the suggested retail price of $15.00, but 0.25 of the retail price is deducted for packaging before Ziam’s royalty is calculated, how much will he receive for sale of the CD? Write your answer in the form of an equation and solve it.