Passive Income Opportunities - Part 2 - Royalties

Royalties of all forms are always appealing in that the income is purely passive and so there is potential for huge rewards once one gets it going. There are only a few specific areas where such opportunities exist – writers, singers, and inventors to name a few. Broadly speaking, one has to create something unique. Bear in mind also that not all writers, singers, and inventors earn royalties. Whether one earns royalties is dependent on mainly two factors:
  • How desirable your creation is to others? and
  • whether you had established some sort of an agreement with another entity which could decrease your income potential?
On the assumption that a creation is in place, its desirability is dependent on how well it is marketed and on the level of competition. Singers and writers face steep odds to realize substantial royalties largely because of the expenses associated with getting their creation appreciated by the marketplace. For upcoming singers, the contracts are heavily skewed in favor of the record label company. One should not overlook the role of shrewd marketing, which can get certain songs to command more airtime at radio stations thereby, helping it get popular and on the road to be a hit. The effectiveness of such promotions is also dependent on how intense the competition is from promoters of other similar songs.

Similar odds exist for inventors employed in the field of their expertise. As part of their hiring process, employees are required to sign away rights to patents related to the line of work, making the employer the owner of the invention. To their credit, employers do take the initiative to go through the patent process by using patent lawyers and the inventor is offered a fixed monetary/stock reward. This effectively takes away any chance that employees can realize passive income from royalties.

As is evident from both the above scenarios, middlemen benefit from the creations of individuals. These arrangements are heavily tilted in favor of the associated corporations. Adding further insult is the heavy lobbying by corporations at the political level. Needless to say, it is extremely hard for individuals who have regular day jobs to realize passive income through royalties with the existing system.

One can envision customers buying songs directly from singers who publish their work thereby eliminating the middleman entirely. This will allow the artist to realize the “true” value of their product. Similar scenarios apply for writers and inventors as well.

Corporations can play a positive role in this by promoting an open marketplace for the associated inventions, songs, book material, etc that came about by an individual’s association with them. The current situation of corporations hoarding songs, books and inventions as IP and media assets will give way to an open marketplace where nobody is shutout completely from a creation. Furthermore, by allowing the income realized through such strategies to filter down to the talented individual, it is bound to be a win-win situation for all involved.

The optimist in us sees its time in the horizon…


Related Posts:
  1. Exiting the Rat Race - Definition.
  2. Rat Race Exit Strategies
  3. Passive Income - Part 1 - Network Marketing.
  4. Passive Income - Part 2 - Royalties
  5. Passive Income - Part 3 - Rental Income
  6. Passive Income - Part 4 - Dividends.
  7. Passive Income - Part 5 - Pension Plans
  8. Passive Income - Part 6 - Employer Plans
  9. Strategies to Beat Inflation.
  10. Strategies to Reduce Expenses.
  11. Frugal Living - A Definition to go by
Last Updated: 01/2015.





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