Photo: Meghan Trainor (met her publisher at the Durango Songwriters Expo!) | By Jessica Brandon, USA Songwriting Competition | There are several ways to make money with your music, but it’s never as simple as receiving a weekly paycheck. Revenue generated from music comes from royalties, which is when a company or individual pays you to use your copyrighted works (your music). In other words, whenever someone plays your music, you get a cut.
There are four different types of royalties involved in music publishing:
1. Mechanical royalties
2. Performance royalties
3. Synch royalties
4. Print music royalties
If you really want to make money in the music industry, it’s important to understand the differences between the types of royalties and how they work. Here’s your guide to the four types of royalties in music publishing.
1. Mechanical Royalties
Mechanical royalties are paid out whenever a copy of a song is made. Think back to the days of records and cassettes. Whenever music was reproduced, it required a “mechanical” process to reproduce it.
Of course, times have changed, and nothing is mechanical anymore. Most modern mechanical royalties come from streaming services like Spotify, Pandora, and Apple Music, but only when a listener plays your song on-demand or downloads it. When your song plays over a streaming radio service, it’s a different type of royalty (which we’ll get to).
Mechanical royalty rates are set by the U.S. Copyright Act. Most of the time, rates land around $0.06 per 100 on-demand streams. So, if someone listens to your song 100 times on Spotify, you’ll get $0.06. It doesn’t sound like much, but if you get into the thousands or millions of streams, that money can really add up. If your listeners play your song 1.6 million times, you’ll earn $1,000 in mechanical royalties.
In the United States, mechanical royalties are collected and distributed by the Harry Fox Agency and the Mechanical Licensing Collective (MLC). Companies like Songtrust and Cdbaby also collects Mechanical royalties.
2. Performance Royalties
In some instances, replaying your copyrighted songs aren’t considered reproductions; they’re performances. This is typically when your songs are played in public places, such as:
● On the radio
● In a bar or restaurant
● Radio service like Spotify or Pandora (not for on-demand streaming or downloads)
To start earning performance royalties, you’ll need to register your song with a Performance Rights Organization (PRO) like BMI, ASCAP, SESAC, SOCAN (Canada), or PRS (UK). They’ll then split the royalty between songwriter royalties and publishing royalties. You’ll get the songwriter royalties, while your publishing company (if you work with one) will get the publishing royalties.
3. Synch Royalties | Music always makes videos, movies, and games better.
4. Print Music Royalties
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4 Types of Royalties Involved in Music Publishing
