Artists say they lose money by not being paid royalties for their work on a song. In April, the band Metallica, with its production companies, and rapper Dr. Dre sued the sharing service Napster for allowing the distribution of music without paying royalties and for infringement of copyrights. Lars Ulrich, drummer for Metallica, showed up at the front door of Napster's San Mateo, Calif., headquarters and delivered a list of 335,435 users who downloaded Metallica's songs. Many users were booted off the system's servers for having Metallica's songs. Late last month a federal judge issued an injunction to shut down the service, but Napster appealed and continues to operate.
Royalties come in many forms.
When radio, television or public events play a song, the artist is credited and receives a quarterly or yearly airplay royalty. Sales royalties represent a percentage of a CD's sale price. Songwriters get publishing royalties when a song is recorded. Commercial royalties come from the use of songs in commercials or in commercial activities. Artists need royalties not just to pay their bills but to repay record companies for advances on their CD contracts.