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Understanding Music Royalties & Performing Rights Organisations

Updated: Aug 16, 2023

In this article, we break down the basics of music royalties and explore the role of performing rights organisations (PROs) in this process.

Understanding Music Royalties & Performing Rights Organisations on Major Labl
Understanding Music Royalties & Performing Rights Organisations

Simplifying the complexity

If you're a musician looking to monetize your content, music royalties are a crucial income source. However, navigating the world of music royalties can be complex, especially for independent artists trying to build a career.

What are Music Royalties?

Music royalties are payments artists receive when their copyrighted music is played or reproduced.

There are four main types of royalties:

  1. Mechanical Royalties: These royalties are earned when your music is streamed, downloaded, or sold. Streaming services like Spotify generate mechanical royalties, and rates are usually modest per stream.

  2. Performance Royalties: When your music is performed publicly, such as on radio or in live events, you earn performance royalties. These are managed by PROs.

  3. Synchronization Royalties: Whenever your music is used in TV shows, movies, or video games, you receive synchronization royalties.

  4. Print Royalties: If you copyright your sheet music, you can earn print royalties when it's sold.

Who Receives Royalties?

All recorded music has two types of copyrights: sound recording copyright (master copyright) and compositional copyright. Different people or entities can own these copyrights, leading to multiple copyright owners for a single piece of music.

Performance Royalties and PROs

Performance royalties are crucial for musicians whose songs are played in public or on streaming services. To collect these royalties, artists need to register with a PRO like ASCAP or BMI in the US or PRS in the UK. PROs handle the collection of performance royalties and distribute them to artists and publishers.

Mechanical Royalties in the Streaming Era

With the rise of streaming services, artists can reach global audiences, but royalties can be complicated. Each stream generates both performance and mechanical royalties. The rates vary depending on the streaming platform and the location of the listener. PROs and the Mechanical Licensing Collective (MLC) help manage and distribute these royalties.

How to Maximize Royalties

To optimize your earnings, it's essential to understand the different types of royalties and partner with a performing rights organisation or CMO (Collective Management Organization). Registering with a PRO allows you to benefit from international royalty sources. Also, retaining publishing rights and using a music management platform can simplify the process and ensure fair royalty splits.

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