In general, the term "Royalty Free Music" describes a type of licensing model that allows you to license music for one upfront fee and then pay no additional fees thereafter. The opposite of this model is a Needle Drop license where you pay every time the music is played.
Music libraries are marketplaces where music can be licensed for commercial uses. The model a lot of these markets use is a resemblance of a royalty free type license.
Now this is where things begin to get clouded because the term Royalty Free does not mean it's completely free from royalties. Most of the time music libraries will not exclude public performance royalties in the license agreement. Performance royalties are paid whenever the music is played publicly on television, radio, ect. The good news is that fee does not get paid by you but by the broadcast networks.
Those networks, under copyright law, pay Performance Rights Organizations (PRO) royalties regardless of where the music comes from. So really the music is royalty free for you because you never have to pay an additional fees, but at the same time it is not royalty free for the broadcast networks. Let me give you an example:
Say you're making a reality tv show which will air on CBS and you need music. You go to a music library and license the music for the show. Now you are done paying fees.
Once the show is ready to air, a cue sheet is filled out and submitted along with all the other paper work for the show. CBS pays blanket amounts of money annual or quarterly to the Performance Rights Organizations. The PRO's use the cue sheet information to calculate and distribute the money CBS has already paid to the musicians as performance royalties.To be able to collect these royalties from the broadcast networks, musicians have to be affiliated with a PRO. This is the only way musicians can collect these royalties. The problem is some music libraries deliberately mislead people when it comes to PRO registered music.
They use the gimmick that their music is so royalty free that they don't even allow PRO affiliated music. This is a sales pitch. Music libraries that practice this are playing on fear to attract business. It's wrong, dishonest, and a bad business practice.
The truth is for most uses it doesn't matter whether the music is PRO registered or not. Licensing PRO registered music will not trigger YouTube copyright claims, it doesn't mean your going to have to pay all these hidden fees, and it doesn't mean it will be a financial hassle in the future.
I hope this article helps clear up the royalty free licensing model. Thanks for reading and please feel free to share, like and comment below.