Ever wondered how you can increase your income streams by earning royalty income? Royalty income is money you make when you allow the use of your property. It could be copyrighted works, patents, franchises, natural resources, and so much more.
For instance, each time you stream music on your phone, the musician who performed the song receives royalties. In addition, the music streaming service you use pays the musician a fixed amount from your monthly subscriptions. This process allows musicians and other performers to earn royalty income from their work for a long time.
If you own a building, you receive rental income when you rent it out. Similarly, you receive royalty income when you allow someone to use your intellectual property. To earn this way, you need to secure the ownership rights of an asset and then sell the right to others to use this asset.
There are many ways to earn from royalties, including buying investments. But that’s a topic for another day. Let’s talk about the types of royalties that you can use to start earning some income.
5 Types of Royalty Incomes To Consider
Today, many famous chefs own successful restaurant brands. For these chefs, the brand name is an asset. If you own a restaurant brand, anyone who wishes to open a restaurant using your brand name needs your permission to use your brand name. Franchising allows you to receive money on every product sold under your brand name.
To earn income from a franchise, you should either be a very skilled professional or an investor in a brand. If you have no special skills, search for professionals interested in forming a joint venture and partnering with them.
Every year, thousands of authors earn millions of dollars from book sales. Selling books is big business, but it is unpredictable. So when publishers agree to publish a book, they are taking a big risk. As a result, publishers often agree to pay authors a fixed amount from every copy sold to protect both parties from losses. This payment is known as book royalty.
Are you an excellent writer? Book royalties are a great way to earn long-term income from your skills. And, if the book is adapted, you also earn some money. For example, British author JK Rowling has made millions of dollars from her Harry Potter novels. Her books inspired the Harry Potter movies, and she makes money from those as well. A lot of African authors earn handsome income from book royalties, too.
Writing is not for everyone, and getting a publisher to back your book can be difficult. But this should not stop you from earning passive income from book sales. There are numerous ghostwriters who can write a book for you, although the charges could be high. An alternative to publishing is to self-publish, which guarantees you a larger portion of the royalties.
Also, there are a lot of authors seeking investors to finance the publication of their books. Search for them over the internet and see if you can work together. The author will remit your share of the royalties to you if you both decide to work together. This way, your investment can generate money for you over many years.
If you own the rights to an album or a song, each time the music is played on television or radio or performed at an event, you earn income. People obtain ownership rights to musical compositions in many ways.
One way is by being a musician. Other music professionals like songwriters, sound engineers, music producers, and record labels acquire rights to songs and albums using their skills. You may have also noticed that Disk Jockeys (DJs) also own music records. They do this by acquiring rights to songs as investors. Investing in music is another way to own music rights.
Investing in music projects can be tricky because it requires expertise in music matters. However, if it pays off, you may expect to earn large amounts of money on your investment. Mechanical royalties are the most common form of royalty received in the music industry. Record labels pay these to the artists and other co-owners from record sales.
When TV shows, video games, or ads contain copyrighted songs, the song owners receive ‘synchronization royalties.’ However, this payment depends on the agreement they have with the music users. For instance, remember the famous dance challenge of the hit song Jerusalema? Remember, the recording company started demanding fee payments from brands and companies that used the song commercially?
Royalties From Technology
Companies like Google and Apple distribute applications through their app stores in exchange for a cut of sales. This way, a software developer who developed the app earns royalty income every time a user downloads the app.
Most large software companies today began as ideas. If you have a product idea, search for software developers who can turn your vision into reality. The developers who work with you may not ask for money upfront. Instead, they may ask for equity. Then, when your software product hits the market, you can earn income from sales while working on improved product updates.
Software developers license computer manufacturers to preinstall copies of software on the computers they sell. As a result, Microsoft earns billions of dollars in royalties annually from its preinstalled operating system.
Selling software requires a lot of marketing and hard work. By granting licenses to hardware manufacturers, Microsoft saves itself a lot of stress while making sales. You can do it too.
Do you own land that contains natural resources but lack the finances or knowledge needed for mining? If yes, you can make money through the option of selling the extraction rights. Payments to property owners are often based on the units of products extracted or on product revenue.
Mineral resources are often simply a matter of luck. If you own property, visit the local library to search for information about mineral deposits in your area. You may be sitting on a literal gold mine!
That said, mineral rights vary between countries. It’s, therefore, very important that you confirm the ownership rights in your country. In some countries, like Kenya, any minerals on the land belong to the state, where the state holds the rights in trust on behalf of the community. Other countries entitle the land owner to own and exploit minerals beneath their land.