Music royalties are one of the main revenue streams for music creators, compensating them for the use and reproduction of their music. Understanding the different types of music royalties and where they are collected is essential for all musicians to ensure they aren’t leaving any money on the table.

In the music industry, there are two copyrights associated with a recorded composition or song: the recording copyright (commonly referred to as “Masters”) and the compositional copyright (commonly referred to as “Publishing”).

Masters

Recording Revenues

Recording revenues are earned from the use or digital reproduction of a sound recording, such as streaming. Record labels have traditionally collected these revenues for their rosters. But with the rise of distributor platforms being accessible to creators of any career stage, distributors such as DistroKid and TuneCore assist creators both in the distribution process to DSPs (like Spotify) while helping collect these revenues.

Digital Performance Royalties

Digital performance royalties are earned when sound recordings are streamed or digitally performed on platforms such as online radio, satellite radio, and non-interactive streaming services. SoundExchange is the prominent organization responsible for collecting and distributing digital performance royalties in the United States. They work on behalf of rightsholders to ensure that they receive fair compensation for the use of their music on these digital platforms.

Publishing

Mechanical Royalties

Mechanical royalties are owed to rightsholders when their compositions are physically or digitally reproduced (e.g. Spotify streams). These royalties are collected by mechanical rights organizations (MROs) and collective management organizations (CMOs) in different countries throughout the world.

Rightsholders have the option to register with MROs and CMOs in each individual country, but it is generally recommended to work with a publishing administrator for more efficient royalty collection across multiple territories. Collecting on your own comes with a slew of obstacles, from language barriers to unfamiliar registration systems.

Publishing administrators like Songtrust, TuneCore, and CD Baby will assist in collecting these royalties on behalf of rightsholders, typically in exchange for a commission.

Performance Royalties

Performance royalties are earned when a composition is publicly performed or played. Performing rights organizations (PROs) such as ASCAP and BMI are responsible for collecting performance royalties on behalf of songwriters and publishers. These PROs work to ensure that music creators are compensated when their compositions are performed in various settings, including DSPs, live performances, music venues, bars, coffee shops, and radio broadcasts.

Other Royalties

Micro-Sync Royalties

With the growth of online platforms like Instagram, TikTok, and YouTube, rightsholders can earn micro-sync royalties when their music is synchronized to videos. These royalties combine performance and mechanical royalties based on the licensing agreements with each platform.

Print Royalties

Selling printed sheet music generates print royalties for composers and publishers. Although it is not as lucrative as it was in the days before the rise of the internet, it can be a significant income source for rightsholders in certain genres.