Music royalties
Composer-lyricist Jenni Vartiainen
Member of Teosto since 2004
We sell licences to use music and distribute the collected fees as royalties to music authors, composers and publishers.
When you are our member and your music is performed in public or recorded (audio or AV recording), you will receive royalties for the use of your music through us. Royalties are delivered to composers, lyricists, arrangers and music publishers whose music has been used and for works administered by Teosto. Teosto’s distribution rules determine the principles on the basis of which we pay performance royalties.
- on radio
- on television
- online
- at an event or concert, in corporate events
- as background music in restaurants, shops, taxis or other customer facilities, for example.
You will also receive royalties when you personally perform your music.
What affects the amount of performing right royalty:
- the media or service in which the music was played
- the performance category multiplier that can be used to determine a larger multiplier for live music performed on radio compared to recorded music, for example
- the duration of the performance
- the number of performances
A recording is created when music is recorded, for example:
- on a CD or vinyl record
- on DVD or BluRay
- as a digital music file on a computer or in online music services
- on a USB flash drive
- on an external hard drive
Where does the distributed money come from?
The distribution is based on performing right royalties paid by those who use music. We here at Teosto sell licences so that music can be used to promote business or entertain customers and employees.
How are the collected royalties sent to the correct recipients?
The users let us know the music they have played or recorded, and performing artists let us know which songs they have performed.
Abroad, performing right royalties are collected by the copyright organisation of the country in question. Teosto has signed reciprocal representation agreements with over 70 foreign copyright organisations. These organisations collect the performing right royalties in their countries and distribute the royalties of Teosto members to us. We then forward the royalties to the members whose music has been performed abroad.
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How the payments for music used in different channels and services are calculated
Television companies pay performing right royalties in accordance with the agreement between Teosto and other companies for using music. The channels deliver Teosto detailed information on the broadcast programmes and the music included in them. Teosto’s affiliates are in charge of delivering the information from abroad.
The contents broadcast on television are grouped in the distribution reports by the role the music has on the programme. For instance, the music in television series and commercials has a different price in the distribution report.
Radio companies and stations pay Teosto performing right royalties either in accordance with an agreement made with Teosto or their turnover. The amount of payment based on turnover is a percentage of the turnover, depending on the amount of used music.
We receive detailed information on the music radio channels play. The amount of royalties the music author receives depends on the time of day their work was played and the extent of the channel’s service area, among other things.
The organiser of a concert or a festival pays performing rights royalties for the use of music, based on the proceeds from ticket sales at paid events and the number of audience at free events. The performing right royalties of shows are based on either the actual or the potential number of audience (free events) or the proceeds from ticket sales.
Teosto has agreements with municipalities, congregations and music institutes, among others, on paying performing right royalties and reporting performance information. For instance, municipalities pay annual compensation based on the number of residents in the municipality for the use of music.
Teosto requires a detailed report from organisers or performers on works that were performed at events and their authors in order to pay the performing right royalties to our members.
Companies often use background music in their customer facilities to promote sales and create atmosphere. Companies pay performing right royalties for the use of background music in accordance with, for instance, the surface area of the customer facilities or the number of potential customers.
Teosto conducts a biannual background music survey to find out the sources of background music used by companies. The reporting and distribution regulation committee and the Board of Teosto utilise the survey information when making a decision on the reporting and payments of background music. The income charged for background music is distributed to the authors on the basis of the performance information in radio, television and live events.
Teosto has a reciprocating agreement with nearly 70 foreign affiliates. The objective of these agreements is to ensure that our members receive performing rights royalties when their music is performed abroad. Foreign copyright organisations manage the promotion of copyrights and the payments of performing right royalties in their countries and distribute the compensations to our members through Teosto. In turn, Teosto represents the rights of foreign authors and publishers in Finland and ensures that their music is licensed and their performing right royalties are paid.
The distributions from abroad are usually divided into similar payment groups as domestic compensations. However, each copyright society has its own payment policies and Teosto is unable to influence other societies’ distribution rules.
The compensations paid for using music in online services are based on the agreements between service providers and Teosto. The reporting and payments of using music online can be influenced by the fees of the service, manner of performing, usage volume and the duration of having the work available in the service, among other things. Online distributions are paid for the services licensed by Teosto or an affiliate of Teosto.
Online distribution covers both downloads of music services, streaming music (e.g. Spotify) and the music played in audiovisual services and online radios. Teosto or an external party appointed by the Board of Teosto can be in charge of distributing royalties to the music author. Most of the invoicing, reporting and paying for online services is carried out through NCB at the moment.