Royalty

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A royalty is a form of income received for giving the rights to another person or entity to use a product or right that the first person owns.

Royalties are common in two areas:

  • The entertainment industry (whereby the writers of a song or film receive royalties each time a song or film is played)
  • The mineral industry (for example, a landowner who's property has minerals underneath it -- most commonly crude oil and natural gas -- will receive a portion of the sale of any oil and gas produced)