Music Royalties Part II: Who, What & How of Performance Royalties
Performance royalties are the most well known type of music royalties. Most likely because, one of the first pieces of advice given to a new artist is that they must register with a performance rights organization. Most artist take heed but few understand exactly why. Keeping it simple, this article is dedicated to erasing the confusion and enhancing the genius behind the topic of performance royalties.
Who is entitled to collect Performance Royalties?
Songwriters are entitled to the collection of performance royalties. A distinction must be made between an artist and
a songwriter. An artist is simply the individual who records their performance of a song someone else has written. A songwriter, on the other hand, is the creator of the lyrics and/or music performed by an artist. It is not uncommon for the artist and the songwriter to be the same person. An artist who has not written lyrics or composed music for a song they record will not collect performance royalties.
What are Performance Royalties?
Similar to mechanical royalties, performance royalties are music royalties derived from ownership in the performance arts copyright. Ownership in the performance arts copyright comes from an individual’s contribution to a song (i.e. the contribution of lyrics and/or music).
How are Performance Royalties collected?
Performance royalties are collected by performance rights organizations (a.k.a. PRO’s): ASCAP, BMI and SESAC. These organizations collect performance royalties on behalf of songwriters when their music is performed in public (i.e. on the radio, streaming services, bars, restaurants, nightclubs, concerts, etc.). Once a songwriter becomes a member of a PRO, the PRO takes on the responsibility of collecting their royalties and paying out their appropriate income share.
PRO’s automatically assume songwriters have relinquished some or all of their copyright ownership to a music publisher. Because of this assumption, the performance royalties collected are automatically split in half. One half is referred to as the writers share and the other half is referred to as the publisher share. Songwriters who have not signed a contract with a music publisher start publishing companies and register as their own publisher within their PRO. By creating their own publishing company, songwriters ensure they are collecting all monies owed to them.
Until next time, go be Genius!