How Are Royalties Distributed Among Band Members?

In the music industry, royalties are a primary source of income for artists. These royalties are generated through various means, such as album sales, streaming on platforms, licensing for movies and TV shows, and live performances. For bands, the proper distribution of these royalties is essential to ensure that all members receive fair compensation for their contributions.

In this article, we’ll explore how royalties are distributed among band members and what happens to these royalties when a member decides to leave the band and start a new one.

Types of Music Royalties

Composition Royalties: These royalties are paid to the songwriters for the music and lyrics of the songs. In a band, members who participate in songwriting will receive a share of these royalties. Composition royalties are divided into:

• Mechanical Royalties: Paid for the reproduction of music on platforms like Spotify, Apple Music, and album sales.
• Performance Royalties: Paid for the public performance of songs, such as in concerts and broadcasts on radio or TV.

Recording Royalties: These royalties are paid to the owners of the master recording, usually record labels, and in some cases, the artists themselves if they are independent. Recording royalties are primarily generated from sales and streaming.

Synchronization Royalties: These royalties are paid when a song is used in sync with visual media, like movies, TV shows, commercials, and video games. These royalties are split between the songwriters and the owners of the master recording.

How Are Royalties Distributed in a Band?

Internal Agreements

The distribution of royalties within a band is primarily based on internal agreements between the members. It is crucial that these agreements are set in writing to avoid future conflicts. Some bands choose to split royalties equally, while others prefer to distribute them based on each member’s contribution to songwriting and recording.

Example of Distribution

Let’s say a band has four members: a vocalist, a guitarist, a bassist, and a drummer. If all members contribute equally to songwriting, they might decide to split composition royalties equally. However, if only the vocalist and guitarist write the songs, they might receive a larger share of the composition royalties.

For recording royalties, if the band is independent and owns the rights to their recordings, they might decide to split these royalties equally among all members since everyone participates in creating the master recording. If they have a record label, the label will receive all the royalties.

What Happens When a Member Leaves the Band?

Continuation of Royalties

When a member leaves a band, their right to continue receiving royalties depends on their contribution to songwriting and the prior agreements established. If a member significantly contributed to the songwriting, they will continue to receive composition royalties even after leaving the band. Recording royalties will also be paid if the former member was part of the original recording.

Using the Songs in a New Band

If a former band member decides to form a new band, they cannot use the old band’s songs without permission from the other songwriters and rights owners. The songs are intellectual property of the songwriters and recording owners, so any unauthorized use would constitute copyright infringement.

Practical Example

Let’s say the guitarist from our hypothetical band decides to leave and form a new band. If they wrote or co-wrote some of the original band’s songs, they will continue to receive royalties for those songs. However, they cannot record and release those same songs with their new band without first obtaining permission from the other songwriters and recording owners.

Recommendations for Handling a Member's Departure

Set Clear Agreements

Before any conflict arises, it is vital for the band to have clear agreements about the distribution of royalties and the rights to use songs. These agreements should be detailed and in writing, and it is advisable to have them reviewed by a music law attorney.

Maintain Good Relationships

The departure of a band member can be an emotional and complicated process. Keeping open and respectful communication can help mitigate conflicts and ensure that everyone involved understands their rights and obligations.

Consult Professionals

In complex situations, it is advisable to seek guidance from attorneys and accountants specializing in the music industry. They can provide advice on handling royalty distribution and other legal and financial aspects.

The distribution of royalties within a band is a complex process that requires clear agreements and open communication among members. When a member leaves the band, their right to continue receiving royalties depends on their contribution to songwriting and the established agreements. Additionally, they cannot use the old band’s songs without proper permission.

By handling these aspects professionally and with proper advice, bands can ensure a fair and equitable distribution of royalties and protect their creative and financial interests.