Royalty

A royalty is a payment made to an individual or organization for the use of their intellectual property, natural resources, or other valuable assets. This arrangement allows others to benefit from the asset while compensating the owner for granting usage rights. Royalties are common in industries such as music, film, publishing, mining, oil, and franchising. They can be structured as a percentage of revenue, profit, or fixed amount, depending on the agreement.

Example: A musician earns royalties when their songs are played on the radio, streaming platforms, movies, or live venues. Similarly, an author receives royalties from book sales, and a mining company may pay royalties to the government for extracting natural resources.