Resources

Royalty Reporting Systems

Royalty reporting systems are used in many industries including publishing, mining, the pharmaceutical industry, manufacturing and marketing and advertising. In many cases, publishers or manufacturers may be required by law to provide accurate reports of royalties due and royalties paid to authors, inventors, musicians and other artists. If they are not under a legal obligation, they are certainly required to provide royalty reports under the terms of contracts.

Accurate and timely royalty reports can serve as an incentive to artists and inventors. For example, publishers often pay advances to authors. A royalty statement will show the author how much he or she has earned in royalties on a title and a projected date as to when the advance will be paid off and the author can expect to begin collecting royalty checks. If the title is selling slowly, the author might be motivated to help with promotional efforts such as book signings or radio or television interviews. Accurate and timely royalty statements are also good business practice. Publishers constantly need new titles to sell. Authors are more likely to sell their work to a publisher that has a reputation for clarity and honesty in revenue sharing.

A useful royalty reporting system will track and report revenue from licensing and permissions, which can be complex areas of royalty calculation. Popular movies, TV shows and video games often generate merchandise, such as clothing and toys. The manufacturers of the clothing and toys must purchase a license to use copyrighted images from the movies, TV shows or video games. The actors, writers and directors who receive royalties from gate receipts or DVD sales will most likely have clauses in their contracts stipulating that they will receive royalties from merchandise licensing. A royalty reporting system will not only have to report DVD sales, but also sales of T-shirts and the royalties accrued from those sales.

Systems used to report royalties today must be adaptable. Formats for popular entertainment and information is increasingly becoming digitized and delivered over the Internet. This means that reporting systems must report downloads more than sales of hard copies. If consumers have a subscription that allows them unlimited downloads of songs or movies, royalties may have to be prorated according to the number of downloads through the subscription service or as a percentage of the licensing agreement with the subscription service. As formats continue to change due to advancing technology, reporting systems must become increasingly adaptable and customizable.

Find out more about royalty reporting by MetaComet systems, in this page.





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MetaComet Systems, Inc., Computer Software Publishers & Developers, South Hadley, MA