Performance royalties are payments made to songwriters, composers, and music publishers whenever their musical compositions are publicly performed or broadcasted. This includes live performances, radio airplay, TV broadcasts, digital streaming (e.g., Spotify, Apple Music), and even background music in public spaces like restaurants or bars.
How Performance Royalties Work
- Licensing: Businesses or platforms that use music (e.g., radio stations, streaming services) must obtain a license from a Performing Rights Organization (PRO) to play songs publicly. These licenses grant access to the PRO’s catalog of music in exchange for fees.
- Collection: PROs (such as BMI, ASCAP, and SESAC in the U.S.) collect these fees from music users. They monitor public performances through broadcast logs, digital tracking, and other methods to determine when and where songs are played.
- Distribution: The collected royalties are distributed to songwriters and publishers based on factors like the number of plays, the platform used, and the licensing agreements in place. Typically, songwriters and publishers split these royalties equally.
Key Features of Performance Royalties
- They apply to compositions (not sound recordings).
- They are distinct from other royalty types like mechanical royalties (for reproducing music) or sync royalties (for using music in visual media).
- Public performance includes both interactive streaming (where listeners choose songs) and non-interactive streaming (e.g., Pandora).
Role of Performance Rights Organizations (PROs)
PROs act as intermediaries between music users and rights holders. They ensure that songwriters and publishers are compensated whenever their works are publicly performed. Without registering with a PRO, artists cannot collect these royalties.
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