A Quick Guide to Mechanical and Performance Royalties that You Can Actually Understand
Music band during cd recording in studio
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Below, I will summarize the difference between Mechanical and Performance Royalties in music…. in a manner which you can actually understand.
Mechanical and performance royalties have long been a source of confusion amongst many music industry professionals and artists alike.
I believe this article can shed some light on them for you and boost your understanding of this critical aspect of the music industry.
Royalties
In music, royalties are generated via the use, play or distribution of songs.
Payments are made accordingly to artists and companies which have ownership rights to the songs.
Ownership can be established via copyright or registering said music with a performance rights organization.
These ownership rights in music have significantly changed over the years, but the framework remains mostly the same.
There are two significant distinctions in music!
One is for the live performing artists while the other is for those who record their songs in the studios.
Since they both have very different requirements hence, the royalties associated with them also are different.
Mechanical Royalties
Mechanical royalties are shared with artists and performers when their music is sold.
In the past, they were limited to physical products such as CDs and cassettes, but today it is also applied to music streaming online.
This royalty, formally known as the songwriting royalty is set by the government and it is currently 9 cents to every dollar earned according to the U.S. laws.
This includes the music that is played on streaming platforms such as Spotify, Apple Music and other similar platforms.
Harry Fox and Audiam are companies that represent many American artists and songwriters in terms of mechanical royalties.
Performance Royalties
Performance royalties are paid when the music is played publicly.
What can be considered as public performance?
Music played over the television or the radio, in a restaurant or at a bar is public performance.
Your own live performance can even be classified as such; and hence these are cases where performance royalties can be earned.
BMI, ASCAP, and SESAC are the largest companies operating in the United States that collect performance royalties and distribute them accordingly to artists and music companies.
As I mentioned before, hopefully, this article has cleared up any misunderstanding you had about mechanical and performance royalties or just enhanced your current knowledge of the terms.
In any case, I encourage all artists, producers, music companies etc. to please make sure you are registered with any of the listed organizations.
Collect the royalties that are due to you!
Kevin James has over 20 years of experience in the entertainment industry in various facets. He has worked as a recording artist, songwriter, producer, on-air radio personality, background actor and film director. Kevin is a Member of the National Writer's Union.
There’s a bunch of organizations setup to do similar things. Gets confusing. Plus outside of US it gets even more complicated to get $$ owed 2 u
Nice job in explaining these royalties, Kevin. I’m still new to the whole “game” so I am reading whatever I can find to familiarize myself with everything. It will take some time to get to know everything and actually understand the terms, but I will get there.