8) Royalties: what they are, conceptually
A royalty is not “a random payment from the music gods.” It is a structured concept:
A royalty is compensation tied to the use or exploitation of a rights-controlled music asset.
Royalties are different from:
- A salary (paid for time),
- A flat service fee (paid once for work),
- A prize (paid for winning),
- A donation (paid voluntarily).
Royalties are more like:
- Rent paid to use a property,
- Tolls paid to use a road,
- Fees paid to use a patented invention.
Why royalties exist instead of one-time payments
Because music can be exploited repeatedly, across time and contexts, by parties other than the creator. Royalties allow value to return to the rights holders as exploitation continues.
A one-time fee model would undervalue many works:
- Some songs become classics over decades.
- Some recordings appreciate as cultural artifacts.
- Some catalogs generate stable income long after release.
Royalties align compensation with ongoing economic reality.