What are performance royalties? Performing rights explained

What are performance royalties? Performing rights explained

Performance Royalties explanation

Performance royalties may sound straightforward but it’s important to know how they work for you as a music maker.

Performance royalties are being generated all the time in shops, bars, theatres, on the radio, on TV and beyond. Yet they’re often overlooked by artists who might not fully understand how they work or may not understand how to collect them – or even that they could be collecting rightfully owed royalties in the first place!

In this article we will explore exactly what performance royalties are, how they’re generated, and how artists can earn performance royalties from their music. For more information on the different kinds of royalties that music generates and how to collect them we have a full, brief guide to music publishing available here.

What are performance royalties?

Performance royalties are somewhat self-explanatory in that they technically cover the music being performed to the public, but it’s not quite that simple. It’s more accurate to say that performance royalties are for any broadcast of a track, whether that’s a live rendition or the playing of a track out loud to a public audience.

Performance royalties are generated when a track is played on the radio, broadcast on TV, performed on stage or anywhere else with an audience, played in shops and businesses open to the public, and in other similar contexts of broadcast.

The royalties for these are generated for the composition copyright, which is for the original composition (duh) and therefore not necessarily the track as it is being played. For example, if a band is playing a cover song to a crowd at a venue then the performance royalties for the track go to the original songwriter(s) of that track. Performance royalties, wherever they are generated, will always come back to the original songwriter.

Who collects performance royalties and how are they paid to artists?

For the most part, performance royalties will be collected by Performance Rights Organizations (PROs) like ASCAP AND BMI in the US, SOCAN in Canada, and PRS and PPL in the UK. These organisations will collect payments from venues and businesses who play music in public which is then collected into a pot to be distributed out to their members.

The way PROs collect payment for performance copyrights will depend on the context. With radio stations and TV broadcasters there will often be a direct agreement with a payment secured. In the cases of public spaces like venues and shops there will usually be a license or one-off payment arranged to cover the revenues for any music played in their business.

Artists can sign up join Performing Rights Organisations who will then work to track how much each artist is entitled based on a percentage of their pot. They will pay out the considered earnings to rightsholders and their publishers.

How do performance royalties work on streaming services?

Technically a stream is considered a public performance of a song. This means that it generates a performance royalty, as well as mechanical royalties and sound recording royalties. However the rates for performance royalties generated through streaming services are varied and will differ between territories.

PROs will collect royalties from streaming services as well, making for easier tracking and collection than their broader rights management across public performances.

Performance royalties vs mechanical royalties

Mechanical royalties are generated when music is re-produced and these are due to the composition copyright owner, just performing royalties.

Mechanical royalties were traditionally earned when music was printed and processed in pressing plants, a set rate being due for each pressing of a CD or vinyl record for example. Nowadays, mechanical royalties also apply to on demand streaming and downloads of music. Technically a track is reproduced if it is downloaded or streamed so mechanical revenues are earned here.

Streams will earn both performance royalties and mechanical royalties but they are both distinguished rights which are both rightfully owed to the composition owner.

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