Generating Income from Royalties

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Generating Income from Royalties

With the digital age, the channels where songwriters and artists can earn money have become far more accessible than they were 20 years ago. These days, a record deal and an agent aren’t a necessity – you can take command of the earnings for your material for yourself.

This is done with far less stress and confusion if you are a member of a royalty collection agency. These agencies are institutions that represent songwriters, composers, and performers throughout different parts of the world and ensure the proper compensation for their work is given. Depending on where you live in the world, you’ll have various options available to you. Some countries have more than one, specializing in different areas.

We’ll provide you with a link at the bottom of this article to go to and look throughout the different agencies that you could sign up to, but we wanted to give you a quick ‘Royalties 101’.

Performance Royalties vs. Mechanical Royalties

Performance royalties are the fees music users pay when music is performed publicly. Music played over the radio, in a restaurant or bar, or over a digital streaming platform like Spotify or TIDAL is considered a public performance.

Mechanical royalties are a royalty paid to a songwriter whenever a copy of one of their songs is made. For instance, when a record label presses a CD of your song, you are due a mechanical royalty.

Those two types of royalties are often mixed up, since they sometimes travel through the pipe together.

In today’s streaming-driven musical ecosystem, mechanical royalties are mostly generated when a user chooses to play a specific song on a streaming service. When it comes to streaming, the key differentiator between the two types of royalties is user choice: if the user chooses a song on an on-demand platform, then public performance royalties and mechanical royalties are generated. If a song is played on a non-interactive platform (like Pandora’s free radio, for example), only performance royalties are paid out.

So, if you’re a producer, here are the two revenue streams that you can look forward to. The collection agency that you sign up for consolidates all of this information and streamlines it straight to you – doing this by yourself can be nothing short of a nightmare. 

Here is a list of affiliate partners of APRA AMCOS – the main collection agency in Australasia. They have a table of collection agencies all throughout the world, indicating which specialise in mechanical or performance royalties, or both.  

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