What type of music royalties exist?

What type of royalties exist?

Royalties are the payments that artists and musicians receive for creating music. Read more about how music royalties work. In this article, we will focus on the various forms of royalties. The different types of royalties are generated, depending on how the music is used. The key types of royalties in music are:

Performance royalties
Mechanical royalties
Sync Licensing royalties
Print royalties
Digital royalties
And finally: neighboring rights royalties

Let’s look at each of them in a bit more detail.

1. Performance Royalties

What a performance royalty is: a performance royalty is paid when a song is performed in public,
Who gets paid performance royalties: Songwriters, composers and music publishers.
Who collects performance royalties: Performance Rights Organizations (PROs). In America, the largest are:
- ASCAP (The American Society of Composers, Authors, and Publishers): One of the largest PROs in the United States, ASCAP collects performance royalties for songwriters, composers, and music publishers.
- BMI (Broadcast Music, Inc.): Another major PRO in the U.S., BMI collects performance royalties for songwriters and publishers, and also represents a large roster of music creators.
- SESAC (Society of European Stage Authors and Composers): SESAC is a PRO in the U.S. and Europe, known for representing a more selective group of songwriters and composers. It also collects performance royalties.
Examples: your song is played on the radio, on TV, performed at a concert, or played at a bar, in a club, in a cafe or streamed on platforms like Spotify.

2. Mechanical Royalties

What a mechanical royalty is: paid when a song is reproduced or copied, such as through physical sales (vinyl, CDs) or digital downloads, and streaming services.
Who gets paid mechanical royalties: Songwriters, composers, and publishers.
Who collects mechanical royalties: in the United States that is primarily The Harry Fox Agency (HFA)
Examples: the sale of your CD or record, a digital download of your song, or streams from music services 9Spotify pays both performance and mechanical royalties).

3. Sync Licensing Royalties

What sync licensing royalties are: Paid when a song is used in visual media, such as movies, TV shows, advertisements, or video games, for example as soundtrack or background music.
Who gets paid sync Licensing Royalties: Songwriters, composers, music publishers, and often the artist or label.
Collected in the Unites States by: the same PRO’s that collect performance royalties.
Example: your song is used in a commercial, a movie (soundtrack), or on a TV show.

4. Print Royalties

What print royalties are: Paid for the sale of sheet music or printed music.
Who gets paid print royalties: Songwriters, composers and music publishers.
Collected in the Unites States by: Music publishers and print distributors.
Examplea: the sales of your sheet music or songbooks.

5. Digital Royalties

What digital royalties are: These can be a combination of performance and mechanical royalties but are specifically tied to online platforms like streaming services, digital downloads, and video platforms.
Who gets paid digital royalties: Songwriters, composers, artists, and record labels (depending on the revenue-sharing agreement).
Collected in the Unites States by: The digital streaming distributors themselves or the PROs that collect the performance royalties.
Examples: your song collects streaming royalties from services like Spotify, YouTube Music, or Apple Music.

6. Neighboring Rights Royalties

Definition: These royalties are earned when the performance of the recorded version of a song (as opposed to the composition) is broadcast or played publicly.
Who gets paid: all the performers (musicians, vocalists) on the recording as well as the record label that is attached to the recording (if any).
Collected in the United States by: SoundExchange is the largest neighboring rights organization in the world.
Examples: your song is played on satellite radio or digital radio stations, such as SiriusXM, Pandora, and iHeart Radio.