In 1984, British musician Sting wrote "Every Breath You Take." Four decades later, he still earns roughly $2,000 per day from that single song—over $700,000 annually for work completed 40 years ago.

That's the power of royalties: payment for work you did once that continues generating income potentially forever.

What Are Royalties?

Royalties are payments made to creators when their work is used, sold, or licensed. Unlike wages (trade time for money), royalties are payments for ownership—your work generates value whether you're working or not.

Common royalty-generating assets:

  • Music: Streaming plays, radio airplay, sync licenses (TV/film/ads)
  • Books: Sales, translations, audiobook versions
  • Photography: Stock photo downloads, licensing
  • Patents: Licensing fees from companies using your invention
  • Software: Licensing fees, app store revenue share
  • Intellectual Property: Trademarks, characters, franchises
"The question isn't how much you earn. It's how much you earn while you sleep."

Music Royalties: Multiple Revenue Streams

A single song generates royalties from multiple sources:

Streaming royalties: Spotify pays roughly $0.003-0.005 per stream. Sounds tiny until you have millions of plays. A song with 1 million monthly streams earns $3,000-5,000/month.

Mechanical royalties: Paid when music is reproduced (CDs, downloads, streaming). Collected through publishers or services like CD Baby.

Performance royalties: Paid when music is performed publicly (radio, TV, live venues, restaurants). Collected through PROs (ASCAP, BMI, SESAC).

Sync licensing: Paid when music is used in TV shows, movies, commercials, video games. Can be substantial—a song in a Super Bowl ad can earn $500,000+.

YouTube Content ID: Monetize when others use your music in their videos. A popular song used in thousands of YouTube videos generates significant passive income.

How to Start Earning Music Royalties

For musicians:

  1. Create and register your music with a distributor (DistroKid, TuneCore, CD Baby)
  2. Register with a Performance Rights Organization (ASCAP or BMI)
  3. Register with SoundExchange for digital performance royalties
  4. Claim your YouTube Official Artist Channel
  5. Consider sync licensing platforms (Musicbed, Artlist, Epidemic Sound)

For non-musicians:

You can invest in music royalties through platforms like Royalty Exchange, where existing royalty streams are sold to investors. Buy a percentage of a song's future earnings.

Book Royalties: The Long Game

Authors typically earn 10-15% of book sales (traditional publishing) or 35-70% (self-publishing through Amazon KDP).

Traditional publishing math:

  • $25 hardcover × 15% royalty = $3.75 per book
  • 10,000 copies sold = $37,500
  • Ongoing backlist sales can continue for decades

Self-publishing math:

  • $4.99 ebook × 70% royalty = $3.49 per book
  • 10,000 copies sold = $34,900
  • You retain all rights and control

The real money in books comes from backlist—older titles that continue selling year after year. James Patterson earns roughly $80 million annually, mostly from books published years ago.

Stock Photography: Passive Income from Images

Every website, blog, advertisement, and presentation needs images. Stock photography platforms connect photographers with buyers.

Major platforms:

  • Shutterstock: Pay per download, varies by subscription tier
  • Adobe Stock: 33% commission on standard licenses
  • Getty Images: Higher prices, more selective acceptance
  • iStock: Mid-tier pricing and selection

What sells:

  • Business and workplace scenes
  • Diverse people in everyday situations
  • Technology and modern lifestyle
  • Seasonal and holiday themes
  • Abstract backgrounds and textures

Realistic income: A photographer with 500+ quality images can earn $500-2,000/month passively. Top contributors with thousands of images earn $5,000-20,000+ monthly.

The key is volume—each image is a small lottery ticket that might sell hundreds of times over years.

Patent Royalties: Monetizing Inventions

If you invent something useful, you can patent it and license to manufacturers rather than producing it yourself.

Typical licensing arrangements:

  • 2-7% of wholesale price for consumer products
  • Higher percentages for technology and medical devices
  • Upfront payment plus ongoing royalties common

Paths to patent income:

  1. Invent something useful (solve a real problem)
  2. File a provisional patent ($75-300 filing fee)
  3. Pitch to companies who might manufacture it
  4. Negotiate licensing deal
  5. Collect royalties on every unit sold

This path is harder than others—most inventions never generate significant income. But when they do, the returns can be substantial.

Building a Royalty Portfolio

The wealthiest royalty earners diversify across multiple assets:

The musician: 100 songs generating varying amounts, with a few hits carrying the portfolio.

The author: 10+ books, with backlist sales compounding over time.

The photographer: 1,000+ images across multiple platforms.

The investor: Royalty interests in multiple songs, books, or patents purchased on secondary markets.

Each individual asset may generate modest income, but together they create meaningful passive cash flow.

The Time Horizon Reality

Royalty income rarely materializes quickly:

Year 1: Creating assets, establishing presence. Income: minimal.

Years 2-3: Building catalog, gaining traction. Income: supplemental ($100-500/month).

Years 4-5: Compound effect of catalog size and audience. Income: meaningful ($500-2,000/month).

Years 5+: Established catalog generates income with minimal ongoing effort. Income: potentially significant ($2,000-10,000+/month).

This is not a get-rich-quick path. It's a get-rich-eventually-and-stay-rich path.

Getting Started This Week

If you're a musician:

  1. Sign up for DistroKid or TuneCore
  2. Register with ASCAP or BMI
  3. Release your first song to streaming platforms

If you're a writer:

  1. Create an Amazon KDP account
  2. Outline your first ebook on a topic you know well
  3. Aim for 10,000-20,000 words—helpful, focused, actionable

If you're a photographer:

  1. Create accounts on Shutterstock and Adobe Stock
  2. Submit your 10 best images that fit commercial needs
  3. Commit to uploading 10+ images weekly

If you want to invest in royalties:

  1. Research Royalty Exchange for music royalty auctions
  2. Look into royalty-focused funds
  3. Start with smaller positions to learn the market

The Bottom Line

Royalties represent the purest form of passive income—you create something once, and it pays you potentially forever. Unlike rental properties or dividend stocks, there's no ongoing capital requirement. Unlike businesses, there are no employees or inventory.

The trade-off is time. Building a royalty-generating portfolio takes years of consistent creative output. Most individual assets won't generate much. But the ones that do can pay for decades.

Start creating. Start building. Your future self will collect the checks.