Royalties & Registration

How Money Gets Tracked and Paid

• How do songwriters and artists get paid?

• Songwriters’ main streams of income are royalties from their songs, including radio, interactive streaming, and downloads. If they have a publisher, they also typically receive advances from any future royalties. 

• How does an advance work?

• In the signing contract, a publisher will offer a certain dollar amount of money per period that the songwriter is signed to them. This advance is calculated based on the projected amount of royalties that the writer’s future songs will generate. When the royalties do end up coming in,, rather than going to the writer, they will be recoupable to the publisher since they have already been paid in advance. Once royalties exceed the advanced amount, royalties are then distributed to the songwriter. 

• What types of royalties exist?

• Performance royalties include public performance, public display, and digital transmission.

• Mechanical royalties are generated from interactive streams (from DSPs), physical reproductions (vinyls, CDs), and digital downloads.

• Synchronization fees are received when a song is placed and synchronized to visual media. These aren’t quite considered royalties, since a writer may receive backend royalties from any synced songs.

• What is a PRO, and which one should I choose (ASCAP, BMI, SESAC)?

• There are 3 main Performance Rights Organizations in the United States: ASCAP, BMI, and SESAC.  

• A PRO collects and distributes performance royalties and issues blanket licenses to businesses, which allows them to play any songs within that specific PRO’s catalog of music.

• What is the MLC and mechanical licensing?

• The Mechanical Licensing Company (MLC)  is a United States non-profit that administers blanket mechanical licenses to DSPs (Spotify, AppleMusic, etc.), then collects royalties from those licenses and distributes them to songwriters and publishers. Note that these mechanical royalties are separate from performance and sync royalties, and are generated from sales of physical reproductions of songs (vinyl/CDs), interactive streams, and downloads.

• What is a blanket license?

• Blanket licenses allow the licensee unlimited access to a music catalog or repertoire belonging to the licensor for a single, fixed fee. 

• Blanket mechanical licenses are used by DSPs.

• Blanket licenses for public performances are used by PROs.

• Can I collect royalties internationally?

• Yes! If you are first registered with one of the major PROs and have a publisher and/or administrator, they can work to register your songs with PROs across the globe. These royalties tend to take much longer to process, and PROs/administrators may take a fee off the top.