21/09/2025
Revenue and royalties are two different but related ideas in the music industry.
Royalties
Definition
Payments made to owners of intellectual property rights (such as publishers, songwriters, or artists) for the use of their creations are known as royalties.
Sync licenses (for use in TV shows, movies, and advertisements), live performances, streaming, radio play, and other uses are some of the sources of royalties.
Calculation
Royalties are often a percentage of the revenue generated from these uses.
Revenue
Definition
Sales, streams, performances, licensing, and other music-related activities all contribute to revenue.
Scope
Revenue encompasses all money coming in from music-related activities before any deductions or distributions.
Key Differences
Purpose
Royalties are a specific type of payment for rights usage, while revenue is the broader total income.
Distribution
Revenue gets distributed in various ways, including paying royalties to rights holders.
Example
Streaming Revenue
A streaming service generates revenue from subscriptions. Part of this revenue is paid out as royalties to artists and rights holders based on streams of their music.
To understand how money moves in the music industry and how artists and rights holders are paid, it is helpful to know the difference between revenue and royalties.