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ROYALTY

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Royalties -- SMP Hot Links Supreme Join SMP
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Copyright -- SMP Hot Links Supreme
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The compensation paid by a party for the authorization to use a right legally owned by another, e.g., a right in a copyright or patent, or the right to merchandise one's personal image or name, etc.. See: EXPENSE, AUDIT, EQUITY, ADVANCE, PIE, NATIONAL SALES COMPANY, GUARANTEE, RIGHT under "Merchandising Right," INCOME under "Royalty Income," "Gross Income," NAME under "Name Rights," TAX LAW under "Royalty Payments," "Personal Holding Company," "Eisenhower Amendment," FEDERAL TAX FORMS under "Form 6783," "Form 1099-MISC," CONTRACT-RECORDING CONTRACT clause #31, CONTRACT-SONGWRITER/PUBLISHER CONTRACT clauses #22, #23, and #24.
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Artist Royalty:
The compensation received by an artist from a record company for making commercial recordings such as CDs, music video DVDs and CD-ROMs. The royalty received is pursuant to the royalty payment basis and rate stated in the recording contract. The basis and rate section usually states that the record company will pay royalties on 90% of the gross income received by the record company less a packaging deduction. This is known as the royalty basis. Some artists now negotiate 100% instead of 90%. In years past the 10% was kept by the record company to reimburse them for broken records. Even though broken records are no longer a problem, the 90% value still persists. The record company contends that since this practice is so ingrained in the system they would be at a disadvantage, from a marketing standpoint, if they paid on a 100% basis.

The royalty rate paid to the artist for CDs and singles is a negotiated rate (called "record rate" or "regular rate"), usually 6-15 percent of the gross receipts. Some superstars will negotiate even higher percentages and often with a guaranteed minimum cash payment.

Music video DVD royalties vary from 50-100 percent of the record rate. CD record clubs, mail order, and other budget sales receive 50-60 percent of record rate. Foreign and subsidiary royalties range from 50-100 percent of the regular rate. These are all negotiated rates and will vary depending on the negotiating power of the contractees.

Record returns, promotion copies, and other miscellaneous giveaways receive no royalty payment. See: INCOME, AUDIT, ADVANCE, CONTRACT-RECORDING CONTRACT clauses #17, #31, #34, TAX LAW under "Royalty Income."
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Juke Box Royalties:
The royalty fee paid to the copyright owner or to the Copyright Royalty Tribunal (for subsequent distribution, after service charge deductions, to the copyright owner) by any person or entity who publicly performs copyrighted material on coin operated phonorecord players under the compulsory licensing statutes of the federal copyright law.

Initially, the license fee charged for juke box performances is paid annually (if the fee is paid after July 1st the charge is only half of the annual amount) to the Register of Copyrights by the juke box owner. These fees are distributed with interest on a pro rata basis (after the Copyright Office deducts a reasonable accounting and service charge) to copyright owners (or their agents) who file a claim of entitlement each January. Distribution is paid after October 1st and only after all claims are validated by the Copyright Royalty Tribunal and if no distribution controversy exists. Where conflicting claims exist, a proceeding is held to determine proper distribution.

The license fee charged is periodically adjusted for inflation by the Copyright Royalty Tribunal. For further information and current license fee rates, contact the Copyright Office. The mailing address is Copyright Office, Library of Congress, Washington, DC 20559. The telephone number is (202) 707-3000.

See: MECHANICAL LICENSE FEE, SYNCHRONIZATION LICENSE FEE, TRANSCRIPTION LICENSE FEE, PERFORMANCE LICENSE FEE, LICENSE, JUKE BOX under "Juke Box License Fee," COPYRIGHT LAW under "Compulsory License," "Compulsory License for Juke Boxes," "Statutory Royalty," "Notice of Intention," "Copyright Office," "Copyright," "Copyright Owner," "Exclusive Rights," "Limitations to Exclusive Rights," and "Copyright Royalty Tribunal."
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Publisher Royalties:
The share of the royalties received by the publisher for the licensed use of any musical composition in the music publisher's catalog (the music publisher's share is generally 50% of the gross royalty income, the other 50% goes to the songwriter). Publishing royalties received include mechanical royalties, print royalties, performance royalties, juke box royalties, synchronization royalties, transcription royalties, cable television royalties, public broadcasting royalties, compulsory royalties, purchase license royalties, grand rights royalties, advertiser royalties, and foreign royalties. The publishing royalties are initially paid to the music publisher by the licensee and then the music publisher forwards the songwriter's portion to the songwriter. See:
MUSIC PUBLISHER, CONTRACT-SONGWRITER/PUBLISHER CONTRACT clause #22.

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