What are Performance Royalties? Explained for Musicians
Performing royalties can be paid out to both music publishers and artists in a number of scenarios, so let’s dive into how they work and how you can start collecting them.
What are Performing Royalties?
Music copyrights are split into two parts.
One covers the original sound recording (known as the master rights) and the other covers the composition (known as the publishing rights) which protects the underlying melody and structure of a song.
Performing right royalties are paid in relation to a song’s composition and are paid to songwriters and publishers whenever a musical composition is performed or broadcast publicly.
This includes cases like:
- Live performances
- Public broadcasts
- Radio airplay
- Digital streams
Now you know when performing royalties are due, let’s discuss how they’re actually paid out.
When are performing royalties paid?
Performing royalties are paid whenever a composition is performed live, broadcast or streamed.
But how does this work in practice?
Performing royalties are collected by Performing Right Organisations (PROs), which are responsible for passing this revenue onto music publishers, songwriters and composers.
We’ll get into more detail around Performing Right Organisations further on, but first let’s go through the scenarios in which performing royalties are due.
Live performances
It’s surprising how often artists are unaware they could be claiming royalties every time they play live - and that applies to any venue from pubs and clubs to stadiums and festivals.
You can collect the performing royalties you’re owed by registering any live performances with your music publisher or PRO. Performing royalty rates will vary depending on venue, with performances at larger venues commanding higher rates than smaller ones.
Radio Airplay
Radio airplay is always a great promotional boost, but it’s also a potential earner. Whenever your music is played on the radio - whether that’s terrestrial, digital or internet stations - performing royalties are generated.
Radio stations like iHeart Radio usually have the right to play whatever music they like. They then report the number of plays each and every track has received and pay out performing royalties to PROs via all-inclusive licence fees - and just like live performances, royalty rates will vary depending on the size and reach of the radio station in question.
Public Broadcasts
Public broadcasts are counted whenever a recording of your music is broadcast in any kind of private enterprise, from tracks being played over the PA in your local supermarket or railway station to the jukebox in your local pub or bar.
Once again, venues will pay all-inclusive license fees to PROs for the right to play music in their establishment. This money will then be distributed by the PROs to publishers and songwriters in the form of performing royalties.
Digital Streams
Whenever a listener streams a song on a platform like Spotify or Apple Music, a performing royalty is generated. This is because, legally, a performance has taken place whenever a piece of music is streamed - even privately, at home.
However, performing royalties for digital streams are complicated. Following standard practice, streaming platforms will pay out performing royalties to PROs, who then pass on those royalties to songwriters and publishers. But performing royalties are often lumped together with mechanical royalties (which are also due for every stream) in order to streamline the whole process.
Again, as long you’re registered with a reputable, global music publisher like Ditto Music Publishing, you’ll receive both performing and mechanical royalties for every stream.
Artists can also collect extra publishing royalties with Ditto Pro.
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How do performance royalties work?
To help explain things in more detail, here's an example from our Sync Licensing team.
Example Scenario:
Imagine an independent artist, Sarah, who writes and performs her own music. Sarah's song gets played on a popular radio station, streamed on Spotify, and she performs it live at a local club.
Breakdown of Performance Royalties:
Radio Airplay: Every time Sarah's song is played on the radio, the station reports the play to a Performing Rights Organisation (PRO) like PRS or ASCAP. PRS collects the royalty fees from the radio station and distributes them to Sarah and her publisher.
Digital Streams: When Sarah's song is streamed on Spotify, Spotify pays a licensing fee to the PRO. The PRO then allocates part of this fee to Sarah as a performance royalty.
Live Performances: Sarah registers her live performances with her PRO. The venue where she performs pays a licensing fee to the PRO, which then distributes a portion of this fee to Sarah.
This ensures Sarah receives royalties for her work across different platforms and performance types.
How are performance royalties paid?
Performing royalties are collected from licensees (like radio stations, bars, venues and streaming platforms) by Performing Rights Organisations like PRS, BMI and ASCAP, before being passed on to publishers and songwriters.
Whenever performing royalties are paid out by PROs for the use of a composition, they’re usually divided into two parts between the songwriter and the publisher: the “writer share”, and the “publisher share”. This means that most songwriters need to join a PRO in order to claim the “writer share” of performing royalties. However, some publishers, like Ditto Music Publishing, are able to collect the writer share of performing right royalties from some PRO’s, such as PRS, on behalf of their clients - without their client having to spend time and money joining a PRO.
This might all seem somewhat complex and confusing, and it is - but the basic flow of performing royalties is usually the same: PROs receive fees from licensees, and then pay out those royalties to publishers and songwriters.
How can I claim performing royalties?
When you sign up for Ditto Music Publishing, we’ll make sure you receive all of the publishing royalties you’re due.
Our extensive knowledge, and close relationships with our global network of royalty collection societies - including with Performing Right Organisations like PRS, BMI and ASCAP, and Mechanical Right collection societies such as MCPS and MLC - allows us to collect, manage and pay out all types of music publishing royalties.
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