We have all heard the word royalty, although the meaning differs in the US and the UK. Royalty in the USA has to do with payments, and you must have heard about it with reference to books or music. Have you always wondered what royalty payments are? Well, keep on reading because, in this article, we will educate you about what royalty is, the types of royalty, and a few details about the royalty licensing agreement. What is royalty? In the country, royalty or royalty payment is the payment made by the user of an asset to a person who owns that asset. But, there might be conditions imposing restrictions on how the asset can be used. These payments could be a fixed one-time amount, a percentage of revenue, or a per-use. The payment could be made to an individual or a company and would include the use of information covered by copyrights. Types of royalty Royalties are used in various sectors and industries, and some of the common ones are: Performance royalties Primarily associated with music, these royalties are paid by anyone who wants to use the copyrighted music or song of a musician for commercial purposes. Music rights can be classed into lyrics, melody, and harmony, which fall under composition.