Music royalty companies are essential for managing the distribution of royalties for musicians and songwriters every time a song or composition is played on the radio, streamed online, or performed publicly.

There are several types of royalties that these companies oversee, namely performance, mechanical, and synchronization royalties. Public performance royalties are created when music is played publicly, at a concert, on TV, or on the radio. Artists earn mechanical royalties when their commercial music is sold on platforms like iTunes or streamed on services like Spotify. Sync royalties are collected if it’s used in movies, commercials, or video games.

In the U.S., music royalty companies like ASCAP, BMI, and SESAC are well-known, each of which caters to different aspects of royalty collection and distribution. For instance, ASCAP and BMI are non-exclusive and represent a wide range of artists while SESAC is selective and often invites artists based on genre or popularity.

These companies receive fees from businesses, radio stations, and other establishments that play copyrighted music in their operations. They then pay a portion of these earnings back to their members, allowing artists to earn a steady income for their work.

In summary, music royalty companies ensure artists are compensated fairly, so artists can continue creating music. These organizations offer crucial support in an industry where revenue can be uncertain.