The 4 Main Types of Music Royalties Explained

If you are releasing music today, you are likely leaving money on the table. The music industry is notoriously complex, with revenue streams flowing through a maze of different collection societies.

To get paid every penny you've earned, you need to understand the "Royalty Waterfall".

Here is the breakdown of the major types of royalties every songwriter and producer must know.

1. Performance Royalties

"Help me, I'm being played in public!"

Performance royalties are generated whenever your composition is performed publicly. This includes:

• Radio airplay (AM/FM/Satellite)
• Streaming (Spotify, Apple Music, Pandora)
• Live venues (Coffee shops, stadiums, bars)
• TV broadcasts

Who Collects It: Performing Rights Organizations (PROs).

• 🇺🇸 USA: ASCAP, BMI, SESAC
• 🇬🇧 UK: PRS
• 🇨🇦 Canada: SOCAN

The Split: In the US, PROs pay 50% directly to the Songwriter (Writer's Share) and 50% to the Publisher (Publisher's Share).

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2. Mechanical Royalties

"I'm being reproduced!"

This is the most overlooked royalty for indie artists. Mechanical royalties are generated whenever your song is reproduced (digitally or physically).

In the modern era, every time a user streams your song on Spotify or Apple Music, it counts as a "reproduction" because a temporary copy is made on their device.

Who Collects It:

• 🇺🇸 USA: The MLC (The Mechanical Licensing Collective)
• 🇬🇧 UK: MCPS

The Trap: Your PRO (ASCAP/BMI) does not collect mechanical royalties. If you are only registered with a PRO, you are missing out on reliable streaming income. You need a Publishing Administrator (like Songtrust, Sentric, or CD Baby Pro) to collect this for you from The MLC.

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3. Synchronization (Sync) Royalties

"I'm in a movie!"

Sync royalties are fees paid for the right to synchronize your music with visual media (TV, Film, Ads, Video Games).

How Paid: Usually a one-time Sync License Fee paid upfront.

• Master Use License: Paid to the owner of the recording (Label/Artist).
• Sync License: Paid to the owner of the composition (Publisher/Songwriter).

If the content is broadcast on TV, it also generates backend Performance Royalties!

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4. Print Royalties

"I'm sheet music!"

Generated when your music is transcribed into sheet music or tablature and sold.

• Physical sheet music
• Digital lyric sites
• Guitar tab apps

Who Collects It: Usually your Publisher directly from the print company.

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The Master vs. The Composition

Remember, all of the above (Performance, Mechanical, Print) apply to the Composition (the melody and lyrics).

The Sound Recording (Master) generates a completely separate set of royalties:

1. Streaming Revenue: Paid by Spotify -> Distributor (DistroKid/Tunecore) -> You.
2. Digital Performance: Paid by Pandora/SiriusXM -> SoundExchange -> You.

Summary Checklist

To collect everything, you need to be registered with:

1. A PRO (ASCAP/BMI) for Performance.
2. The MLC (via a Pub Admin) for Mechanicals.
3. SoundExchange for Digital Performance.
4. A Distributor for Sales/Streaming.

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