Don’t Forget Your Royalty Checks

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In the haste to reach the top of the music charts, many musicians will run right past a huge windfall of money without ever blinking an eye. That windfall is the Royalty Check.

What’s a Royalty Check?

In many intellectual industries, like writing, art or music, a royalty is paid to the creator of the work. In the music world, the royalty is a percentage of the money earned from the sale or use of a song or CD.

To understand why royalties are important, let’s take for example that you signed a contract allowing a producer to distribute your song via digital mp3 downloads and pay you 1% of the profits as royalties over your lifetime. Just for the simplicity of the figure, let’s assume he charges customers $1each to download the song.

At first it doesn’t sound like much. You made a penny because someone downloaded your song. Ok, now let’s assume this song just became a number one hit and it gets download one million times this week. That’s 1,000,000 pennies sitting in your royalty coffers… $10,000 for doing nothing more than recording one song and letting someone else market it for you. It’s easy to understand how important getting these royalty checks could be to a musicians financial stability.

It’s also easy to understand why the big recording labels might try to leave them out of your contract. It can and does happen. Historical examples of this kind of dirty dealing include accounts such as when Bethlehem Records bought the rights to the Nina Simone album “Little Boy Blue” for $3,000. If Mrs.Simone had retained her royalty rights, the album would have earned her well over $1 million in royalties.

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