Licenses and their corresponding royalties are divided into four broad categories:

1. Recording licenses and royalties - A recording license is an approval to copy music to a medium by recording ( such as tapes, CDs, etc.) for public distribution. A permission granted by a music publisher to reproduce a musical work. Recording royalties are paid to recording artists, songwriters and publishers based on the sales of their records.

2. Performance Rights and Royalties – A performance rights license allows the live performance or broadcast of music. These licenses are usually in the form of "blanket licenses", whereby the license holder pays a fixed fee and receives the right to play all of a particular PRO's works. Permission to use individual recordings is also available. For example, an all-talk radio station would not require a blanket license to play all of PRO's works. Performance royalties are paid to the songwriter and publisher when the song is performed live or played on the radio.

3. Sync Rights and Royalties - If a song is to be played on a TV show, movie, video, commercial, radio show, or even an 800 phone message, a sync license will be required. It's called this because you're listening "simultaneously" to the song as it plays in the background of a record, movie, TV commercial, or voiceover. If you use a specific recorded version of the work, you must also obtain an "original use" license from the record company. When a song is used as background music for a movie, TV show, or commercial, simultaneous royalties are paid to the songwriter and publisher.

4. Printing Rights and Royalties - This royalty is paid to songwriters and publishers based on sales of printed sheet music.

In addition to these royalties, the Home Recordings Act 1992 provides for another royalty to be paid to songwriters and performers. The bill requires manufacturers of digital recording equipment and blank recording media (blank tapes, blank CDs, blank DVDs, etc.) to pay copyright registrants a fee based on a percentage of the sales price to compensate for unauthorized copies of music. possible loss of sales. Two funds were established with the money collected. One fund, the Recording Fund, received two-thirds of the total amount. This fund pays recording artists and record labels. Another fund, the Musical Works Fund, receives one-third of the total amount, which will be split equally between publishers and songwriters. The above licenses (recording, performance, synchronization and printing) also apply to use outside the United States of material copyrighted in the United States. A foreign agency, or sub-distributor, is responsible for managing licensing in their country and paying royalties to songwriters and U.S. publishers.

Songwriters write lyrics and melodies for songs. The songwriter recorded the song in his basement and sent the tape to the Library of Congress to register the copyright. Even though he knew that the song would automatically be copyrighted as long as he created it in a fixed form (printed on paper and/or recorded), he registered it because he was sure the song was going to be a hit and wanted to eliminate all the Infringement issues.

Even if the songwriter recorded a self-sung version of the song, he knew it wouldn't be a hit even if he tried to sell it at the top of his lungs. So he went to the publisher. The songwriter signs a single deal with a publisher, who markets the song to record labels. A publisher specializes in finding and discovering new music, then licensing the recording to a record label or others who want to use the song in some way. In exchange for this "management rights," the publisher receives 50% of the recording royalties from each record sold.

If a major record company likes the song and has the ideal person to sing it. They will sign a recording licensing agreement through the Harry Fox Agency for the rights to record the song. The song was recorded and released immediately. It became a hit song. Who can make money? For every record sold, the songwriter and publisher each receive 50% of the recording royalties, and the recording artist also receives a share of the recording royalties (but under different agreements).

But in addition to recording royalties, songwriters and publishers also receive performance royalties, meaning they make money based on how often the song is played on the radio, in restaurants or bars, or in other types of broadcasts. These royalties are monitored by performing rights organizations (such as ASCAP, BMI or SESAC) and collected and then paid; artists are paid royalties by the organization with which they registered the song. Recording artists can also receive royalties from ordering digital "performances."

If a movie producer is making a new movie, they want to use this song in a scene. At this point the song was gradually entering the realm of sync royalties (where the music is combined with the video). Songwriters and publishers obtain an agreement to use music in a film when the songwriter's work is synchronized with a scene in the film, plays during the credits at the end of the film, or is used in a television show or commercial fees, and performance royalties when the film is shown on television or in theaters abroad. If a film uses a specific recording (called a "master") by the singer who made the song famous, that singer will receive a periodic percentage of royalties from a fee agreed between the film and the record company, and if a soundtrack recording is made, Singers also receive recording royalties.