Royalties paid for the use of music
Composer-lyricist Jenni Vartiainen
Member of Teosto since 2004
When you are a Teosto member and your music is performed in public or recorded (audio or AV recording), you will receive royalties for the use of your music.
The royalties paid for music use belong to the authors of the works: composers, lyricists and arrangers. In addition, a share of the royalties for published works is paid to the publishers of the works.
If you perform your own music, you will be entitled to royalties as long as you remember to submit a performance notification for the performance.
A public performance of music is subject to a fee – with the exception of private use
A public performance of music always requires a licence and payment of royalties. Teosto licenses the works of its own members and also represents members of foreign copyright societies in Finland.
- Public performance includes playing music on the radio, television, the internet, at a concert or as background music. A licence is always required for a public performance.
- Private use includes, for example, the use of music by private individuals on social media platforms and streaming platforms. On platforms licensed by Teosto, music authors will also receive royalties from private use.
- In addition, private use includes weddings, birthdays and other family occasions. PLEASE NOTE! Events held by companies or other organisations do not usually constitute private use, even if they are private events.
- You also need a licence to reproduce music (e.g. on CDs, vinyl records, DVDs, Blu-ray discs, computers, online music services, USB flash drives or external hard drives).
The organiser of the event or other music performance is responsible for obtaining a licence. The performer is only responsible if they are the organiser of the event.
We collect the royalties for music licences and distribute them to music authors
We collect royalties for music use by selling licenses to music users so that they can reproduce and perform music to promote their business or entertain their customers and employees.
Licence prices are based on agreements between Teosto and music users and public price lists, which you can read more about on the Music Licences page.
However, we cannot pay royalties until the party using the music has paid the licence fee to Teosto. If the licence fee is not paid on time, the payment of royalties to music authors and publishers will have to be postponed. See unpaid royalties that could not be distributed on time.
Royalties paid by Teosto are subject to withholding tax. We will deduct withholding tax and any other personal deductions (e.g. distribution or publisher advances) from your distributions according to your tax rate.
Royalties can also be collected by a Teosto partner
Licences for music reproduction are issued and reproduction royalties are collected and distributed by our partner Nordisk Copyright Bureau (NCB). Most of the invoicing for international online music services and the processing of music usage data are handled by the Network of Music Partners (NMP).
Royalties collected by NCB and NMP are paid through Teosto’s distributions.
How much royalties will you receive?
The amount of royalties paid for the use of an individual work depends on many factors:
- The event, media or service in which the music was played
- For commercial operators, how much revenue or, for example, proceeds from ticket sales they have generated
- The performance category multiplier, which can be used to, for example, determine a larger amount of royalties for live music performed on the radio compared to recorded music
- The duration of the performance
- The number of performances
Teosto’s distribution rules define the principles on the basis of which we distribute and pay royalties. On our website, we have listed approximate distribution values, i.e. prices per minute, for various types of music use.
In addition, the amount or royalties received by an individual author is affected by how the authors of the work have decided to share the royalties accumulated by the work.
The authors agree on the royalty shares for the work themselves when they submit a work notification. When agreeing on royalty shares, the limits stated in Teosto’s distribution rules must be considered.
How are royalties determined?
The amount of royalties paid to the rightholders, i.e. music authors and publishers, is always based on the total amount of the music royalties for the respective year by distribution category (radio, TV, live performances, etc.). This total amount is divided by the number of minutes of music performed in that distribution category.
However, the amount of royalties is emphasised on the basis of how the music was actually used, which means that not all minutes have the same value.
- For radio and TV performances, the amount of royalties collected depends, among other things, on the reach of the channel/station on which the music was performed, the duration of the performance and the number of performances.
- For events, the amount of royalties is influenced by, for example, the size of the venue and, in the case of paid events, the proceeds from ticket sales and, in the case of free events, the number of attendees.
- For online services, the amount of royalties collected is affected by, for example, whether the service is paid or free, whether the content can be streamed or downloaded, the amount of use and the time the content has been available in the service. See the list of services licensed by Teosto.
Other revenue and transfers from Teosto are added to the royalties collected. On the other hand, our operating costs and the cultural contributions will be deducted from the total. Cultural contributions are used to support the performance of domestic music through, for example, grants awarded by Teosto’s member organisations.
You can find more information on what is added and deducted from the total distributable amount in section 5.2 of the Distribution Rules.
How are the collected royalties distributed to the correct recipients?
Teosto’s distributions are based on the reports and information we collect from various parties.
Artists who perform music submit information to us about the works they perform at gigs and concerts. Music users, such as gig organisers or TV channels and radio stations, also submit information to us about the music they have played or reproduced.
Based on these reports, we create an overall picture of whose music has been performed, i.e. to whom we should distribute royalties.
Read more about distributions and payments dates on Royalty Distributions page.