How are the royalties calculated?
Both APRA’s and AMCOS’ distribution policy uses a ‘points’ system to allocate royalties to each song. From the cue sheets, we allocate one point per second of duration for each song. The points are then multiplied by the number of streams allocated to the program. For APRA only they are further weighted based on the way that music is used. For example, a song which is used as ‘featured music’ in the film would have a higher value than the closing credits music. The following table sets out how points are weighted based on music use:
Music use weightings
- 2x - Featured - music which is audible to the characters on screen and the audience, for example a scene with a radio playing
- 1.5x - Theme - music which runs under the opening or closing credits of a film or TV show
- 1x - Background - the ‘sound score, often original music that has been composed specifically for a film or TV show
How points are used to calculate the royalty amount payable for each song
APRA: For Subscription VOD services, once the points have been calculated for all payable songs for a particular service, the total revenue collected from that Video on Demand service is divided by the total number of points, resulting in a $ rate per point. This rate is then multiplied by the number of points given to a song based on the weightings above, resulting in the royalty amount payable for that song. This calculation is performed for every song being paid in the distribution.
AMCOS: For subscription VOD services we use the number of streams per film or television episode to calculate a value per title. This value is then shared across the songs contained in the cue sheet, according to each song’s relative duration in the production. No music use weightings are applied.
APRA & AMCOS: For Transactional VOD services a royalty is calculated for each production (rate multiplied by sale/rental price multiplied by number of transactions) and the music in the production will share in the distribution according to a combination of its relative duration and type of use.
Once we have calculated the amount payable for a song, we pay that amount to the copyright owner of the work. If the copyright owner is not a member of APRA or AMCOS but a member of an affiliated overseas society, we pay the money to that society.
Direct allocations v analogy
Where a service can provide usable data and:
- The total licence fee (APRA plus AMCOS) exceeds $10,000 for two consecutive quarters; or
- The service has claimed to have direct licences for some of our music,
a direct allocation is made (i.e. licence fees from the service are directed to the music on the services music reports).
In other circumstances an analogous distribution is made and assessed on a service-by-service basis.
How often are royalties paid?
Distributions for Video on Demand services are calculated and paid quarterly.
What about songs that cannot be identified or are the subject of a dispute?
View our information guide on Unidentified Songs and Disputes for more information.