How Are Royalties Distributed in Featurings or Collaborations?

Collaborations or featurings are a popular trend in the music industry, where artists from different genres and styles join forces to create new songs. These projects not only benefit the artists by expanding their audience but can also result in significant commercial success. However, one of the most important and often complicated aspects of collaborations is the distribution of royalties.

In this article, we’ll explore how royalties are distributed in featurings and collaborations, offering practical examples for better understanding.

Types of Music Royalties

Composition Royalties: Composition royalties are paid to the songwriters for the lyrics and music of the song. In a collaboration, these royalties are divided among all the co-writers of the song. The exact proportion depends on the agreement between the artists.

Recording Royalties: These royalties are paid to the owners of the master recording of the song. In a collaboration, these royalties are usually divided according to the terms of the recording contract or a specific agreement between the artists and the record label.

Synchronization Royalties: These royalties are generated when the song is used in sync with visual media, such as movies, TV shows, or commercials. Synchronization royalties are divided between the songwriters and the owners of the master recording, depending on the contractual agreements.

Performance Royalties: These royalties are paid when the song is publicly performed, whether on the radio, TV, concerts, or streaming. They are divided between the songwriters and publishers according to the agreed percentages.

Practical Examples of Royalty Distribution in Collaborations

Example 1: Equal Collaboration

Suppose two artists, A and B, collaborate on a song. Both artists contribute equally to the lyrics and music composition. In this case, the composition royalties would be split 50/50.

Distribution of Composition Royalties:

• Artist A: 50%
• Artist B: 50%

For recording royalties, if both artists are independent and agree to share the master recording rights equally, the distribution would also be 50/50.

Distribution of Recording Royalties:

• Artist A: 50%
• Artist B: 50%

Example 2: Collaboration with Different Contributions

Now, let’s say three artists, A, B, and C, collaborate on a song. Artist A writes most of the lyrics, Artist B composes the music, and Artist C contributes a verse and handles the production. In this case, the composition royalties might be distributed based on each person's contribution:

Distribution of Composition Royalties:

• Artist A: 40% (lyrics)
• Artist B: 40% (music)
• Artist C: 20% (verse and production)

For recording royalties, if Artist C also acts as the producer and has an agreement to receive a larger share of the recording royalties, the distribution might differ:

Distribution of Recording Royalties:

• Artist A: 30%
• Artist B: 30%
• Artist C: 40%

Example 3: Special Guest Collaboration (Featuring)

Suppose a main artist, A, invites a guest artist, B, for a featuring on their song. Artist A composes and records most of the song, while Artist B contributes a verse. In this case, the composition royalties might be distributed based on the contribution:

Distribution of Composition Royalties:

• Artist A: 70%
• Artist B: 30% (verse)

For recording royalties, depending on the agreement between the artists and the record label, Artist B might receive a smaller percentage since their contribution to the recording is less:

Distribution of Recording Royalties:

• Artist A: 80%
• Artist B: 20%

Contractual Agreements and Negotiations

Importance of Contracts

It is crucial that all royalty agreements are put in writing before releasing the collaboration. A detailed contract should specify how all royalties will be divided, including composition, recording, performance, and synchronization royalties. This will help avoid misunderstandings and future conflicts.

Transparent Negotiations

Negotiations should be transparent and fair. All involved artists should clearly understand what percentage they will receive and why. It is advisable to involve a lawyer specializing in music law to review the contracts and ensure all terms are fair and clear.

Examples of Clauses in Collaboration Contracts

• Royalty Division: Specify the percentages of composition and recording royalties for each artist.
• Usage Rights: Detail each artist’s rights to use the song in different contexts.
• Payment Terms: Establish how and when royalties will be paid.
• Duration of Agreement: Define the duration of the agreement and conditions for renewal or termination.

The distribution of royalties in featurings or collaborations can be a complex process, but with clear planning and agreements, it can be effectively managed. It is essential that artists establish clear and fair terms before releasing the collaboration to ensure an equitable distribution of royalties.

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