When your music is distributed, streamed, downloaded, or performed publicly, it can generate different types of royalties. The two most common are mechanical royalties and performance royalties.

What are mechanical royalties?

• Mechanical royalties are payments owed to the songwriter and publisher whenever their composition is reproduced, manufactured, or distributed — whether physically or digitally.
• That includes situations like:
  • Pressing CDs or vinyl
  • Digital downloads (e.g. iTunes)
  • Streaming activity (e.g. Spotify, Apple Music)
    • Yes — streaming platforms also generate mechanical royalties.

What do Digital Mechanical Royalties include?

• Streaming mechanicals from Spotify, Apple Music, and other streaming services (generated with every stream).
• International mechanical royalties from digital download stores like iTunes (generated with every sale).
• Performance-related royalties from digital streaming services, radio, TV, live concerts, and other broadcast platforms.
• Global YouTube Sync Publishing royalties when your song is used in videos across YouTube.

Statutory Mechanical Royalty Rates (U.S.)

• Under U.S. law, the current statutory rate for physical recordings and permanent downloads is:
  • 12¢ per copy for songs 5 minutes or less
  • 2.31¢ per minute (or fraction) for songs over 5 minutes
• These rates apply to compulsory licenses as outlined in Section 115 of the U.S. Copyright Act (1976).
• You can also negotiate mechanical royalty rates directly — for example, when licensing your music to a label or another artist covering your song.

What are Performance Royalties?

• Performance royalties are paid to songwriters and publishers when their music is publicly performed or broadcast. Examples include:
  • Radio airplay
  • TV broadcasts
  • Live concert performances
  • Background music in restaurants, bars, or retail stores
  • Streams on digital services like Spotify or Pandora
• These royalties are collected and distributed by Performing Rights Organizations (PROs) such as ASCAP, BMI, SESAC, SOCAN (Canada), and PRS (UK)

How are Performance Royalties calculated?

• There's no fixed rate for performance royalties. Payouts vary depending on:
  • How much license revenue each PRO collects during a given quarter
  • The number of performances logged
  • The medium of use (radio, streaming, live, etc.)
• Each PRO uses its own formula to determine payments.