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| What are some of the types of "back-end" royalties? |
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Back-end royalties refer to royalties or payments that are made after a film is released. In the area of film and television music, these royalties generally fall into 2 categories:
Performance Royalties - royalties paid by performing rights societies (see "What are Performing Royalties" question) for public performances of music on television, radio, and except for the U.S., in theatres. Performance royalties are paid by broadcasters and other music users, and are paid by the performing rights societies to those whose music is performed publicly.
Mechanical Royalties - royalties paid by record companies or music libraries based on the sales of music to the public (record companies) or the licensing of music to music users (music libraries). Music libraries may also pay mechanical royalty payments based on the sale of music library CDs to music users.
"Points" or "Percentage of Profits" - these are royalties that are paid based on the financial success of a film or television project. There are many different ways these fees are calculated, but they're usually determined by taking a percentage of the gross (overall) or net (after expenses) receipts from a film. Since bookkeeping and expense determination for a film can be done many different ways, many prefer to construct deals based on the gross receipts of a film, rather than the net receipts or net "profit."
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