23rd September 2021

When you allow someone else to use your work freely, this is typically called a licence and will generally have conditions or a time period attached.

A simplistic example would be something like the Creative Commons licenses that allow people to use a work freely with perhaps some conditions attached; such as having to attribute the work (name the author).

In commercial situations, a rights owner may may perhaps grant a licence to a company (such as a producer of publisher) to produce a film based on their work, or have the exclusive right to sell copies of their work for a certain time period in return for a sum of money (the license fee) and/or a share of the revenue/profits.

A royalty (or ‘residual’ in the TV and film industry) is a fee that is paid whenever a work is used/sold. For example in the music industry a small royalty fee may become due each time a song is played on the radio, used in a TV advert, or streamed on a media service. Naturally this would be too complex for each individual artist or publisher to keep track or and collect royalties, so agencies exist that act as an intermediary; the copyright owners (or their representatives) become members of a collection/rights agency and people using the copyright works can apply for licences from the agencies and pay royalties or a blanket licence fee to cover royalties.

A list of collection agencies, grouped by country is maintained at https://en.wikipedia.org/wiki/List_of_copyright_collection_societies

The term that royalties will be due for is typically dependent on the copyright duration of the work in question. As many works continue to be subject to copyright after death (e.g. under UK law the copyright in many types of work will expire 70 years after the death of the author of the work), so it is not unusual for the next of kin inheriting the estate of a deceased relative to receive royalties for work written/created by their antecedent.

Where royalties are agreed as part of a fixed term lease/licence, then they will typically be paid for that period only (as after that the licence expires and the licensee will no longer be publishing or broadcasting the work anyway).

Royalties or residuals may also be paid to other parties that assisted in the creation, publication and distribution of the work, such as actors, producers, etc. depending on their input or importance to the project, this would be the matter of contracts made at the time.