The 20th Century Boom: How Technology Expanded IP Rights and Royalties

The twentieth century was a turning point for intellectual property (IP). New technologies—from radio and film to television, video games, and the internet—reshaped how creative works were distributed and monetized. At the same time, lawmakers, publishers, and rights organizations scrambled to adapt, leading to new forms of royalties, licensing structures, and global agreements.

For today’s creators, entertainment professionals, and businesses, this period laid the foundation for how we still think about IP rights, royalties, and entertainment accounting.

Performing Rights: From Monopoly to Competition

In the early 1900s, music publishers and composers relied heavily on sheet music sales. But as radio exploded in the 1920s, performing rights became essential. ASCAP (American Society of Composers, Authors, and Publishers) initially dominated the market, offering blanket licenses to broadcasters. However, its focus on Broadway and classical works excluded emerging genres like jazz, country, and rhythm & blues.

To challenge this exclusivity, broadcasters launched BMI (Broadcast Music Inc.) in 1939. BMI welcomed all songwriters, democratizing access to royalties and lowering costs for broadcasters. Over time, more performing rights organizations emerged, giving composers and publishers new ways to collect royalties while introducing competition that kept license fees in check.

Mechanical Royalties and the Digital Shift

A critical milestone came with the compulsory mechanical license of 1909, which set a fixed royalty rate for each copy of a song. For decades, this simple structure worked—until new formats like LPs, cassettes, and eventually CDs brought massive growth and piracy concerns.

Congress responded with major reforms:

• 1971 Sound Recording Act granted federal copyright to sound recordings.

• 1976 Copyright Act modernized the framework for mechanical rights.

• 1995 Digital Performance Right in Sound Recordings Act introduced royalties for digital transmissions.

• 1998 DMCA expanded protections for digital content and anti-piracy.

• 2018 Music Modernization Act (MMA) created the Mechanical Licensing Collective (MLC) to manage digital streaming royalties.

Agencies like the Harry Fox Agency (HFA) and later the MLC became crucial in ensuring that songwriters and publishers got paid in a rapidly evolving digital marketplace.

Expanding into Film, Television, and Games

The twentieth century didn’t just transform music—it opened new frontiers across entertainment.

• Film & TV: Producers licensed music through synchronization rights, paying upfront fees and ongoing royalties. Television broadcasts created repeat revenue streams for composers, collected by performing rights organizations.

• Music Videos: MTV blurred the lines between audio and visual media, boosting record sales and generating performance royalties whenever videos aired.

• Video Games: Developers began licensing soundtracks and paying royalties tied to sales and usage. As games moved online, subscription models and downloadable content created ongoing royalty streams.

These shifts turned royalties into multi-layered revenue sources across multiple industries.

International Growth of Performing Rights

Outside the U.S., countries developed their own approaches. Societies like SACEM (France) and PRS (UK) managed performing rights under government regulation, often with statutory monopolies. As television, film, and satellite broadcasting expanded, cross-border licensing agreements allowed royalties collected in one country to flow back to rights holders in another.

This international cooperation was a major step toward today’s global IP frameworks, where a single song or show can generate royalties across dozens of territories simultaneously.

Beyond Entertainment: Patents and High-Tech Licensing

The 20th century’s IP expansion wasn’t limited to music and film. In high-tech sectors like electronics, biotech, and semiconductors, patent licensing exploded. Companies engaged in cross-licensing to avoid lawsuits, while standards organizations introduced FRAND (fair, reasonable, and non-discriminatory) rules for licensing essential technologies.

At the same time, the rise of patent assertion entities—sometimes called “patent trolls”—sparked debates about balancing innovation incentives with litigation abuse.

The Legacy: A Complex, Global IP Marketplace

By the end of the twentieth century, intellectual property had become more diverse, global, and profitable than ever before. Royalties were no longer confined to sheet music or radio plays—they extended into films, television, games, streaming, and patents. Organizations like ASCAP, BMI, HFA, and the MLC shaped how money flowed to creators, while international treaties and licensing structures set the stage for the interconnected IP ecosystem we know today.

For creators and businesses navigating this landscape, the lesson is clear: IP rights are powerful financial tools, but they require careful management to maximize value.

Final Thoughts

The twentieth century taught us that technology doesn’t just change how we consume media—it transforms how creators earn from their work. Whether you’re a musician, filmmaker, game developer, or innovator in tech, understanding royalties and IP rights is essential to protecting and growing your income.

At newmediafs.com, we help creators and businesses make sense of this complex system. From royalty audits to entertainment accounting, a knowledgeable CPA for creators can ensure you’re capturing the value your intellectual property deserves.