A bit long winded but I hope this will clear the confusion.

A royalty is a payment, (usually a percentage) paid to the originator/creator of something, be it a book, a movie, a song, and in our case clip art and pictures. The payment is paid to the owner each time the article is sold. (Intellectual property- copyright, patents, and trademarks) That is how most singers, authors, artists etc. make the bulk of their remuneration. A site offering royalty free artwork has either paid the owner (through an agent) or has somehow sourced the art with the authority to distribute (or redistribute). Become a wholesaler if you like. To benefit from such a site you need to join that site. And that is how they make their money (back). So you pay to join the site and then you can benefit from theirs usually unique and vast collection of art, pictures or clipart (without watermarks). The art you see advertised, as a thumbnail is often too small for you to see their watermark or they consider it to insignificant to place the watermark on it. And of cause the watermark is their sign of ownership. Therefore if you copy art from with a watermark on it, you are infringing their copyright. You are stealing it.

On the other hand free art sites make their money from the advertisers or advertisements on their sites. Although they are free to use, there are usually restrictions regarding profiting from the art copied.

Phew..............