What Are Performance Royalties? The Complete Guide

What are performance royalties? They’re the payments you should receive every time your music plays – whether that’s in public venues, on radio, or through streaming platforms. These royalties can add up fast and become a significant source of income. But here’s the thing – most artists miss out on this money because they don’t know how to collect it.

Each time your song plays at a store, club, or on the radio, you should earn money. Even when your tracks stream on Spotify or Apple Music, PROs – performing rights organizations (and not only) collect cash for you. The problem? If you’re not set up right, that money just sits there.

In this guide, you’ll learn:

• How to collect money when people play your music
• Which companies pay you royalties
• Where your songs can earn you cash
• How to get all the money you deserve

Want to make songs that earn these royalties? Check out my high-quality beats for sale that are ready for radio and clubs.

What Are Performance Royalties and Why Do They Matter?

Think of performance royalties like getting a small payment every time someone plays your song in public. Whether it’s blasting through speakers at a club or streaming on Spotify, you deserve to get paid. I’ve seen too many artists focus only on streaming revenue while missing out on these extra income streams.

When Can You Get Paid for Your Music?

You can earn money from your music in more places than you might think. Here’s where your songs can make you money:

Live Music Venues:

• When DJs spin your tracks at clubs and bars
• During live performances at concerts and festivals
• At small venues like cafes and restaurants that play music
• Even when cover bands perform your songs

Broadcast Play:

• FM and AM radio stations playing your tracks
• College radio stations featuring your music
• Background music in TV shows
• Commercial jingles using your beats (learn how to get your music on commercials)

Digital and Streaming:

• Music streaming apps like Spotify and Apple Music
• Online radio stations like Pandora
• YouTube Music plays
• Instagram and TikTok music features

How Getting Paid for Performances Really Works

The payment system for performance royalties isn’t as complicated as some people make it seem. Here’s the basic flow:

1. Someone plays your music in public
2. The venue or platform pays a license fee
3. Performance Rights Organizations (PROs) collect this money
4. The PROs track where your music gets played
5. You receive payments based on these plays

Key Things to Know About Getting Paid:

• You need to register with a PRO to get your money
• Both songwriters and producers can earn these royalties
• Different types of plays pay different amounts
• International plays can earn you money too

Here’s a simple breakdown of who typically gets what from performance royalties:

*As a producer, I always make sure to get my split (why split sheets are crucial for royalties) clearly written in the contract. Don’t just trust handshake deals.

I’ve noticed that many new artists think registering with PROs is hard or costs too much. Trust me, it’s worth the effort.

The music industry keeps changing, but performance royalties remain one of the most reliable ways to earn money from your music. The key is understanding how to collect what you’re owed.

Understanding Performing Rights Organizations (PROs)

If you want to make sure you get paid when people play your music, you need to know about PROs (learn more about music publishing rights). These organizations are like your money collectors – they make sure businesses pay for using your music and then send that money to you.

The Big Players: ASCAP, BMI, and SESAC

In the US, three main organizations handle performance royalties. Each has its own way of doing things.

Before signing with any PRO, many artists wonder whether to go with a major label or stay independent as this can affect their royalty structure.

ASCAP (American Society of Composers, Authors and Publishers)

• Owned and run by its members (that means artists like you)
• Costs $50 to join as a writer or publisher
• Pays royalties every quarter if you earn more than $1
• Works with platforms like Spotify and Apple Music directly

You should know that ASCAP has been around since 1914. They’re super reliable at getting your money when radio stations or stores play your music.

BMI (Broadcast Music Inc.)

• Free to join for songwriters
• Simple online registration process
• Pays royalties every three months
• Strong connections with radio stations

I’ve seen BMI work really well for hip-hop artists because they have good relationships with urban radio stations and clubs.

SESAC

• Invite-only membership
• Known for personal service
• Pays monthly royalties
• Uses advanced tracking technology

When working with new artists, I usually point them toward either ASCAP or BMI since SESAC is harder to get into.

How PROs Help You Get Your Money

These organizations don’t just sit around waiting for money to come in. Here’s what they actually do for you:

1. Track Your Music Usage

• Monitor radio stations playing your songs
• Keep tabs on TV shows using your music
• Watch streaming platforms for your plays
• Check venues that might play your tracks

2. Collect License Fees

• Get money from businesses playing music
• Handle payments from streaming services
• Collect from international partners
• Chase down people who owe you money

The cool thing about PROs is that once you’re set up, they do all the hard work. You just make music and cash the checks.

What SoundExchange Does for Digital Streams

While PROs handle most performance royalties, SoundExchange is special. They focus just on digital plays, like when your song gets streamed on Pandora or played on SiriusXM.

How SoundExchange Differs from PROs:

• Only handles digital performance royalties
• Pays both artists and record labels
• Works automatically with streaming platforms
• Covers satellite radio and internet radio

I always tell artists to register with both a PRO and SoundExchange. They work together but cover different types of royalties, so you need both to get all your money.

SoundExchange is totally free to join, and they’ve paid out millions to artists. There’s no reason not to sign up – it’s basically free money if your music gets played digitally.

Who Needs to Pay Performance Royalties?

Let’s flip things around and look at who needs to pay for playing your music. This matters because knowing who should pay helps you understand where your money comes from.

Places That Need a Music License

Any business that plays music for customers needs to pay for it. Think about how many places you hear music every day – all those spots should be paying to use artists’ work.

The most common places that need licenses are:

Entertainment Venues:

• Nightclubs and bars that play your tracks
• Concert halls where bands perform
• Sports arenas playing pump-up music
• Theaters using background music

Between these venues are lots of smaller businesses too. Your local coffee shop can’t just play Spotify without paying for the right license. I found this out when helping a friend open their barbershop – they had to get special permission to play music.

Other Businesses:

• Retail stores using background music
• Restaurants with music systems
• Gyms playing workout playlists
• Hotels with lobby music

Even small businesses need to pay. It’s not just about having songs on your phone – businesses need proper permits.

Streaming Apps and Websites

The digital world has its own rules about who pays what. Streaming services handle royalties differently from physical locations.

How Digital Services Pay:

• Spotify sends money to PROs and SoundExchange
• Apple Music reports all plays and pays accordingly
• YouTube tracks music usage in videos
• Social media platforms like TikTok pay for music rights

Each platform calculates payments their own way. Spotify might pay different rates than Apple Music, and YouTube has its own system entirely. This is why you sometimes see artists make more money from one platform than another.

Radio and TV Stations

Radio might seem old school, but it’s still a big deal for royalties. TV stations also need to pay when they use your music.

Here’s who pays what:

Traditional radio stations usually pay more than internet ones.

These stations have to keep detailed records of every song they play. Each play gets reported to PROs, which is how you get paid. Some stations even use special software that automatically tracks every song that goes on air.

Commercials are another big source of royalties. If your song ends up in a TV or radio ad, you can earn money every time it airs. I’ve had producers in my network earn good money from just a few seconds of their music in commercials.

Remember, anyone making money from playing music usually needs to pay for it. There are some exceptions, like playing music at home or in your car, but most public uses require payment. This system makes sure artists get paid for their work.

Performance Royalties vs. Mechanical Royalties

Let’s break down the two main types of royalties you can earn from your music. I know this stuff can seem confusing – I used to mix them up too when I first started producing.

Want to create music that earns both types of royalties? Check out my latest R&B beats that are perfect for both streaming and radio.

The Main Differences Between These Royalties

Think of it this way: performance royalties are for when people play your music, mechanical royalties are for when people copy or download it. Check out my complete guide to mechanical royalties to understand this other crucial income stream.

Let me break this down super clearly.

Performance Royalties Come From:

• When your song plays on the radio
• Every time a DJ spins your track
• Each stream on Spotify or Apple Music
• When stores or restaurants play your music

These are the royalties we’ve been talking about so far. They happen every time someone plays your music where other people can hear it.

Mechanical Royalties Come From:

• People buying your song on iTunes
• Physical copies like CDs and vinyl
• Cover versions of your music

Here’s a simple way to tell them apart:

Getting Paid for Both Types of Royalties

The good news? You can earn both types at the same time.

But here’s the thing – you need to set things up right to get both. Just joining a PRO isn’t enough.

To Get All Your Royalties You Need:

• A PRO membership for performance royalties
• A publishing administrator for mechanical royalties
• Good record keeping of where your music is used
• Registration with SoundExchange for digital plays

Most streaming services now pay both types of royalties. They send the performance royalties to your PRO and the mechanical royalties to your publishing administrator.

This is why having the right team matters. Your distributor handles getting your music on platforms, but they don’t usually collect all your royalties. You need to set up these other relationships to get all your money.

A lot of artists I work with don’t realize they’re missing out on mechanical royalties. They think having their music on Spotify is enough. But there’s often unclaimed money sitting there because they haven’t registered with the right organizations.

Digital stores like iTunes are actually pretty good about mechanical royalties. When someone buys your song, the mechanical royalty gets paid automatically through your distributor. But for streaming, it’s more complicated because you’re dealing with both types of royalties at once.

How Performance Royalty Payments Work

Let’s talk about how much you can earn and how you actually get it. I’ve seen the good and bad sides of royalty payments while working with different artists.

What Makes Your Royalties Go Up or Down

The amount you earn from each play isn’t fixed. It changes based on a few things:

What Affects Your Payment:

• Where your music gets played (clubs pay more than small stores)
• Time of day (prime time radio pays better)
• How many people might hear it
• Type of venue or platform using your music

Think about it – a song playing at a huge festival should earn more than the same song playing in a small coffee shop. That’s why PROs charge bigger venues more money.

How the Money Gets to You

The path your money takes is pretty simple:

1. Places playing your music pay fees to PROs
2. PROs track where your music plays
3. They figure out your share
4. You get paid in your next payment period

Some PROs pay every month, others every three months. Don’t worry if you don’t see your money right away – there’s usually a delay between when your song plays and when you get paid.

Reading Your Royalty Statement

When you get your statement, here’s what to look for:

The first time I got a royalty statement, I was confused by all the numbers. But it’s really just a list of every time someone played your music and how much you earned from each play.

Most PROs now have online portals where you can check your earnings anytime. You can see exactly which songs are making money and where they’re being played. This helps you know what’s working and what isn’t.

Maximizing Your Performance Royalty Revenue

Let’s talk about getting the most money from your music. Artists leave money on the table just because they didn’t know better.

Tips to Get All Your Royalties

Here’s what you need to do to make sure you’re getting all your money:

Register Everything Properly:

• Sign up with a PRO right away
• List all writers and producers correctly
• Update your info when things change
• Keep good records of your music use

Don’t skip any of these steps. Some artists lose out on thousands just because they filled out forms wrong.

Smart Moves for More Money:

• Get your music in playlists
• Build relationships with local DJs
• Submit your music to radio stations
• Make clean versions for stores and restaurants

Tracking Your Music Online

The internet makes it easier to see where your music plays. Here’s what to watch:

1. Use Your PRO’s Online Tools

• Check your plays regularly
• Look for unusual patterns
• Track which songs earn most
• See where your music gets played

2. Set Up Google Alerts

• Track when people mention your music
• Find new places using your songs
• Catch unauthorized uses
• Discover new opportunities

Getting Paid from Other Countries

Your music doesn’t stop at the border – you can earn money worldwide. Here’s how it works:

International Collection:

• Your PRO works with organizations in other countries
• They collect money when your music plays overseas
• You get paid through your regular PRO
• Different countries pay different rates

Common Questions About Performance Royalties

Royalties can get pretty confusing, so let’s clear up the basics.

How Your Royalties Are Calculated

Every PRO uses a slightly different system, but here’s the basic idea:

Some platforms, like video games, have their own unique payment structures. Learn more about getting your music into video games.

When You Get Paid

Payment schedules vary by PRO:

• ASCAP pays quarterly
• BMI pays every quarter
• SESAC pays monthly
• International royalties take longer

The money usually comes a few months after your music plays. This gives PROs time to collect and count everything up.

Managing Your Music Rights

Here’s what you need to handle yourself:

Keep Track Of:

• Where your music gets played
• Who owes you money
• When payments should arrive
• Any missing royalties

I tell every artist I work with to treat this like a business. Keep good records, follow up on missing payments, and make sure everyone involved gets their fair share.

The most important thing? Don’t wait to set this stuff up. Register your music right away, keep your info updated, and watch your royalties grow.

Conclusion

Now you know how to get paid when people play your music. Don’t miss out on these royalties – every play should put money in your pocket.

Want to start earning? Grab my 5 free beats that are ready for radio and clubs. Start creating hits that’ll earn you those royalty checks.