What is a royalty agreement?

A royalty agreement, in the context of entertainment law in New York, is a contract between a creator and an industry professional or company in which the creator agrees to grant certain rights in exchange for the payment of royalties. The exact rights granted and the payment of royalties may vary depending on the contract, but typically it enables the industry professional or company to use and exploit the creator’s work or material. The royalties the creator receives are a percentage of the income generated from the exploitation of their work. This percentage can also vary depending on the contract. In an established industry, such as music, the standard royalty agreement is generally 50%. The creator may also receive additional royalties based on various other income streams; these are known as mechanical royalties, performance royalties, and synchronization royalties, among others. In addition, royalty agreements can also be used to assign the copyright to a particular work to the contracting party. This means that the creator of the work, rather than owning their own rights in the work, will assign the rights to the contracting party in exchange for royalties. Overall, royalty agreements are an important part of entertainment law in New York as they set out the terms by which creators and industry professionals and companies can exploit the creator’s work.

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