Royalties

Royalties are the most preferred method of payment for writers, musicians and performers for their work on a track or at a live gig. A lot of musicians use the royalties that they'd receive after a gig as their main source of income, especially since most musicians are self-employed and don't rely on a monthly salary.
Writers' royalties are slightly different. Every time a writers' song is played live, recorded or broadcasted, the writer is entitled to a royalty.

Copyright is the exclusive legal right given to an owner or the person who originally came up with an idea of something to sell, reproduce or license creative work, in other words, 'the right to copy' quoted by copyrighthouse.co.uk's definition of the term copyright.

The reason why copyright is so important is because if there were no copyright laws, any artist or writer could literally steal another artist/writers' original work and claim it to be theirs and probably get away with it.
Especially in this day and age where a lot of artists' voices or 'flow' sounds the same. But because there are copyright laws, if that situation was to occur, the person attempting to steal the creative work from the original writer may suffer very harsh consequences including;
Large monetary fines
Loss of employment
Loss of property
Loss of freedom
Another very common example of violating the copyright laws would be people illegally downloading music and videos from the Internet.
Although its a big problem, a large number of people do it everyday and get away with it but it can have a massive effect on the artist or songwriter who wrote or performed the song.

The reason for this is because from the artist' point of view, (for example a band) although a lot of people may want to listen to and enjoy their music, they're still illegally downloading the music and getting it for free which can harm the band and could even cause them to split up because of sales and support.

"There are different royalties for different uses of a song." Quoted by venturenavigator.co.uk, there is a royalty called the 'Performers' Right', this is the right to be paid if the song is performed.

"The Performing Right Society (PRS) collects and distributes royalties due for public performances of songs in clubs, pubs, concert venues, cruise ships, and anywhere else that uses live music to attract customers." - the definition of the PRS and what their purpose is in the music industry from venturenavigator.co.uk 's website.

Businesses pay the PRS for a licence for the song and then the PRS respond by giving the writers/publishers/artist their 'royalties' for their song being played on the radio, TV and film etc.

Although the writers receive their royalties for their song, the musicians that recorded on the track also get a royalty known as Performers Rights, not to be mixed up with performing rights.

People who own places that focus on music, for example, clubs, bars etc. have to pay for a licence to use the tracks that the musicians were recorded on, also TV and radio stations have to pay for a licence as well.

After that "A company called Phonographic Performance Ltd (PPL) collects the license money and then passes a share on to the musicians. Royalties Reunited is the simple way for you to claim airplay royalties that are owed to you." - venturenavigator.co.uk' definition of PPL and their purpose in the music industry.

Bibliography:
http://www.venturenavigator.co.uk/content/499
http://www.ehow.co.uk/list_5969732_consequences-violations-copyright-laws.html