Music Publishing Royalties Explained: What is a Performance Royalty?

What is music publishing?
2302 34

What is a Performance Royalty?Music publishing is one of the most important revenue generators for an artist that writes original material. That is why we created CD Baby Pro Publishing Administration so that CD Baby artists get access to worldwide publishing royalty collection.

To read about the various kinds of publishing royalties you can generate through the usage of your music, click HERE.

But in this article — we’re going to talk about one of the big ones: performance royalties.

Some industry experts claim that the amount of performance royalties distributed to songwriters and publishers each year accounts for as much as 30-35% of the total available publishing royalties — so there’s big money to be made.

What ARE performance royalties anyway?

A performance royalty is owed to the songwriter and publisher of a particular song whenever that composition is “broadcast” or performed “in public.”

These instances include: 

• plays on terrestrial and satellite radio (Sirius, KEXP, etc.)

• usages on network and cable TV, film, commercials, games, etc.

• plays on internet radio

• plays on online music streaming services (Spotify, Pandora, etc.)

• performances in live venues

The stations, networks, venues, and music services that benefit from the public broadcast/performance of your music owe you a performance royalty for those usages. But they’re not psychic, and they don’t have time to hunt down every songwriter individually. That’s where Performing Rights Organizations come in.

How do you collect performance royalties? 

As a songwriter, you’ll need to affiliate with a Performing Rights Organization (or P.R.O.) such as ASCAP or BMI (if you’re in the USA). These societies collect and distribute performance royalties on behalf of songwriters and publishers.

Or, as a CD Baby Pro member, we’ll handle your ASCAP or BMI affiliation and song registration for you — saving you tons of extra paperwork. Plus, we’ll register your songs directly with many other collection societies around the world and make sure you get paid all the royalties you’re owed — not JUST performance royalties, but also mechanical royalties for international downloads and global streaming.

To make sure you’re getting paid all the publishing royalties you’re owed worldwide, register today for CD Baby Pro.

Publishing 
Guide: Make More Money From Your Music

In this article

Join the Conversation

  • Pingback: Who Owns Your Music Publishing Rights, & How are the Royalties Split? DIY Musician Blog()

  • Pingback: Are You Getting Paid Everything You're Owed from Spotify? DIY Musician Blog()

  • Pingback: 2 Reasons Why You're Not Getting Paid All the Performance Royalties You're Owed « DIY Musician Blog DIY Musician Blog()

  • Ross Goldenberg

    A performance royalty is owed to the songwriter and publisher of a particular song whenever that composition is “broadcast” or performed “in public.” ——- THIS IS INCORRECT- performance royalties are paid to the band (anyone who plays/ sings on the record)

  • The publishing royalties known as performance royalties for the public broadcast of a composition are ONLY paid to songwriters and publishers. You might be thinking of the kind of digital performance royalty paid by SoundExchange to the artist, band members, session players, and record label involved in producing/releasing a particular sound recording — but that is not technically a publishing royalty. Those payments fall outside of the realms of publishing (which involves the exploitation of the copyright to the song itself, apart from any particular version/recording of that song).

    @ Chris Robley

  • Herbert Stradler

    Hi Chris. Thanks for this article. A quick question please. Let’s say you have an original song and arrangement but left room for vocals, and an artist represented by a record company wants to buy your song and recording. If as part of your payment arrangement you negotiate for points, would that likely be performance royalties; or would you ask for points in mechanical royalties as well? Or, does a “points” agreement mean either and both, along with any other kinds of royalties? Thanks so much for any reply.

  • Check this out: http://musicians.about.com/od/ip/g/points.htm

    It’s generally based on sales, NOT on publishing royalties. Though producers certainly could negotiate to own some share of publishing/songwriting if they contributed to the songs in a meaningful way that alters the compositions.

    But usually what this means is the producer gets a percentage of the sales revenue, outside of the band’s recoupment considerations. So if the label spent 500k on the record, the band can’t collect a cent from sales until the label has earned back their 500k. However, the producer starts getting paid right from the album’s release. They don’t have to wait for the band to recoup before getting paid.

    @ Chris Robley

    • Herbert Stradler

      HI Chris. Thanks for that great response; I read the article on producer points. I’ve also studied on “escalating” producer points, which Heather alludes to in the article. Okay so in this case, Producer points are desirable, since as you say the producer starts getting paid right away. However, in the scenario I outlined, I presume the song would have a producer when the artist recorded a vocal track over it. Could they still give producer points to the guy who produced the original track and arrangement? Or in this case, would the person likely be considered more a beatmaker and simply paid a flat fee?

      Lastly, what if I wanted to get some modest amount of points so that I would be paid anytime the song played on the radio or in a movie, etc? Is that getting into performance and mechanical royalties? If so, can those be part of the producer points agreement? Thanks again, very helpful.

  • Hi there, regarding the first question — it all depends on the negotiating power of the artists/producers/beatmakers involved. I would consider the person who created the track (except for the vocals) a producer/arranger/beatmaker/songwriter (if they were truly coming up with all that stuff on their own). If that’s the case, I’d think they should try to get points on the record (if it’s a big/major label thing). With lots of indie releases, producers just get paid a fee for their service and there’s no points. But again, in this situation, I think that person would also be able to make money from publishing royalties, since I’d also consider them a songwriter.

    To your second question, in order to get paid when a song is played on the radio (performance royalties) or used in a film (sync licensing), you’d need to own a share of the publishing. I suppose it’s possible to legally arrange any split of music revenue, BUT I generally think that the producer should only be getting publishing royalties and songwriting credit if that person actually altered the compositions in a meaningful way.
    Hope that helps.

    @ Chris Robley

  • memphislulu .

    Hello… Thank you for this article it has been very insightful in my research efforts. As an indie artists, I have many songs I’ve written in multiple genres and I’m in the process of having songs demoed & mastered. In my particular case, I would be the songwriter & publisher… (1) If an unknown or indie artists covered my song, I understand they would have to pay mechanical royalties, but what about live performances? It’s the venue responsibility to send the song info to one of the PROs (I’m w/BMI)? (2) If someone famous wanted to record my song, do I have to share publishing rights? I’ve always read to never give up your publishing.

  • 1) Yes, if someone covers your song they owe you mechanical royalties. But when that song is performed in a venue, it’s the venue’s responsibility to pay/report to the PROs — and BMI should then pay you the performance royalties. 2) You should NOT share publishing rights with someone that is just covering your song, unless you agree to let them alter the song to the extent that it’d constitute a new composition — and one which you feel like is an improvement on the previous version. Otherwise, I’d say keep your publishing.

    @ChrisRobley

    • memphislulu .

      Thanks Chris! Several of the songs I plan to push now are in the Country genre, if someone famous on one of the big labels wanted to record the song for their upcoming CD (assume they may do a new composition with some type of variations)… do you think it would be wise to do a Publishing Deal – as it would be my first one ever – to get my foot in the door? If so, would you recommend a 75%-25% split, 50%-50%, would it just depend, or still just keep all my publishing rights?

  • That’s a tough call, and depends on who the publisher is and what they can realistically do with your songs. 100% of nothing is still nothing. That being said, you shouldn’t have to sign away your rights just to open up opportunities. I’d say if you pursue a publishing deal, just have a lawyer look over everything first before signing.

    @ChrisRobley

    • memphislulu .

      Will do… thanks a million!!!

  • Jaime

    Thank you for this important article. I have a question, performance royalties include youtube plays, right?

    If i find out that my music is already used in several videos from different users and they all have thousands of views, can I get royalties from those past thousands of views or it would have to start collecting royalties from the time I joined CD Baby Pro?

    Thanks a lot!

  • YouTube has blanket agreements with performing rights societies like ASCAP and BMI and does pay a tiny amount in performance royalties for views (1-2% of revenue, or a tiny fraction of a cent per view). However, the only way your works can be identified by performing rights societies is through Youtube’s content ID system via a claim on every relevant video that lists the writer of the composition and his affiliation. Without this, a writer’s performances on YouTube will go unreported and royalties uncollected.

    Once your compositions are matched via a claim, all of the views become monetizeable and should be reported, including retroactive ones.

    The performance royalties are in addition to the ad revenue share for master and publishing (technically a synchronization fee) that YouTube pays to partners for monetizeable views.

    @ChrisRobley

  • Naeem Muhammad

    Ok for the particle sense, I go play my song that in a venue like New Jersey Performing Art Center. How do you claim the royalty for the performance? Do I contact someone with the set list of the songs I played? And yes I’m register via CDBABY Pro.

  • Pretty much the only way for indie artists to get paid performance royalties for public performances is to register each setlist with your PRO (ASCAP, BMI, etc.). ASCAP and BMI both have programs to collect data from live shows (venue, songs performed, date, etc.) and collect performance royalties accordingly.

    Check out http://diymusician.cdbaby.com/2012/10/ascap-onstage-pays-you-for-live-performances/ and http://diymusician.cdbaby.com/2012/03/bmi-live-allows-artists-to-get-paid-performance-royalties-for-live-gigs/

    @ChrisRobley

    • Naeem Muhammad

      Would that include places like hotel ballrooms if we get booked for a corporate gig or fundraiser too or just brick and mortar concert venues?

  • That’s a great question. I’m not sure. I would recommend writing to ASCAP or BMI (whichever one you’re affiliated with) and ask them what you should do when performing in non-traditional music venues.

    @ChrisRobley

  • inZZ

    Hi, thanks for the great info. I’m a producer. I heard that major producers like Mike Will Made It get paid for publishing royalties as well as regular song royalties on tracks they produce.
    (I read this from here: http://www.forbes.com/sites/natalierobehmed/2013/12/19/how-mike-will-really-made-it/ )

    Would this apply to me as a producer?

    Is there a way, if I became a CD Baby Pro Member, that CD Baby would be able to collect royalties automatically with songs that I have produced from?
    Is there a contract I would have to set up through CD Baby of some sort for this?
    Since I usually just sell beats to anyone who comes across them, would it be wise to start charging for royalties as well? Or should I only do such a thing if I’m working with a major label/artist, to not scare away business, plus for a more real profit.

  • Well, if your production significantly shapes the composition, then yes. I’d say you’re owed songwriting credit (and publishing royalties) as well as a production fee. If you were listed as a writer, then yes. CD Baby can help you collect your publishing royalties worldwide.
    If the music you sell to artists includes the beat, chords, instrumentation, etc. then I think you have a case for being listed as a co-writer, and would suggest you at least discuss publishing splits with all clients. (You never know who will become a success). If you’re really just creating drum beats (no other instruments, and no chords), then maybe you don’t get writing credit, but it’s still a gray area, and can be approached on a case by case basis.

    @ChrisRobley

    • inZZ

      Thanks so much for your response. I understand exactly what you mean, hopefully I will be able to work out a deal with the publishing or writing then. Thank you again.

  • S. Imlouder

    Thank you for all of the great information. I’m a songwriter/producer in the process of releasing my (personally) first single. I’m covering a song that I’ve updated to a dance version. The song is structured as the original minus one verse. Additionally, I’ve changed the drums, bass line and added a climax and instrumentation to get dance pulse/feel. My questions, 1) Should I submit to 1 of the PRO’s (most likely ASCAP, unless in this situation you’d suggest otherwise…) for review for possible royalties based on the changes? 2) Assuming no royalty would be permitted, who makes money for such a track (I’ve recorded and performed the vocals and instruments)? Please consider internet radio/streaming service/satellite radio and non-internet based radio. I am aware of the mechanical license I must pay but I’d like to know if/when, if some royalties are acquired, can I break even in this situation. Sorry if this is a lengthy request or if the information provided is a bit jumbled. I’ll do my best to clarify further if additional information is required. Thanks in advance and plz keep doing what your doing, it’s a great help to us all!!!

    • The first question: does your removal of one of the verses constitute what is known as a “derivative work?” I’m not sure (though I suspect you could distribute this with a standard mechanical license). That’d be a question for a lawyer. If it DOES constitute a derivative work, then you’d need to get the permission of the publishers/songwriters in order to release it. You would negotiate the terms and royalty splits from there.

      If it is considered a standard cover song, then you’d need to secure a mechanical license to distribute the song (both via physical formats and downloads). Licensed streaming services will pay Harry Fox/publishers on your behalf for all cover songs (so you don’t need to worry about those streams). However, you would not be able to collect any publishing royalties for that song. Those royalties would be owed/paid to the publisher and songwriter. Thus, you wouldn’t be able to register that song with any PROs.

      @ChrisRobley

  • I just registered my music with Sound Exchange, which defines royalties as being for those people that record the music but not for writers/producers. Can you shed some light on why they would define this differently? does this mean, if you have a musician play on your record, that she/he would get equal royalties from Sound Exchange as you, the songwriter?

  • The songwriter does not earn royalties via SoundExchange. They collect a digital performance royalty for non-interactive streams that is related to the usage of a specific sound recording (as opposed to the underlying composition), thus the royalties are paid to the artist, the players, and the label.

    If you are both the writer AND the artist, I would suggest signing up for both SoundExchange AND a performing rights organization (ASCAP, BMI, etc.) — plus CD Baby Pro, so you can collect your mechanical royalties too!

    @ChrisRobley

  • The songwriter does not earn royalties via SoundExchange. They collect a digital performance royalty for non-interactive streams that is related to the usage of a specific sound recording (as opposed to the underlying composition), thus the royalties are paid to the artist, the players, and the label.

    If you are both the writer AND the artist, I would suggest signing up for both SoundExchange AND a performing rights organization (ASCAP, BMI, etc.) — plus CD Baby Pro, so you can collect your mechanical royalties too!

    @ChrisRobley

  • Duke Sheppard

    I’m a CD Baby Pro member, and I’ve been receiving payments from CD baby for lots of streams on itunes, spotify, etc. (THANKS CD Baby!). My question is, should I also be getting performance royalties from my PRO (BMI) for these streams on top of this?

    • If they’re interactive streams (which I’m assuming they are), then no. But you will receive a small mechanical royalty for each of those streams through your publishing administration deal with CD Baby Pro. Those royalties aren’t reported as quickly as the streams, though.

      @ChrisRobley

    • RonaldRump

      Actually if you are receiving payments for streams, those ARE your performance royalties which come from BMI or ASCAP. You also receive mechanical royalties each time your song or album is sold.

  • CassieH

    Hi Chris, our company is a member of CD Baby but not Pro We are already affiliated with SoundExchange, BMI for the USA and Canada and have a sub publisher in the UK for the rest of the world who collects international mechanicals and performance royalties via PRS/MCPS. How would it also benefit us to become a Pro member with CD Baby, and would that membership interfere with our other above affiliates?

    • If you already have arrangements with a PRO (as both a songwriter and publisher) and a service that’s collecting all your mechanicals worldwide, you’re all set. The benefit to CD Baby Pro at that point might be that you could get paid quicker (IF those companies you mentioned rely upon reciprocal deals for royalty collection.)

      @ChrisRobley