How can you calculate performance royalties?

If you are a songwriter or a music publisher, you may be entitled to receive performance royalties whenever your music is played or performed in public. Performance royalties are paid by performing rights organizations (PROs) such as ASCAP, BMI, or SESAC in the US, or PRS, GEMA, or SACEM in Europe. But how can you calculate how much you will earn from your music? In this article, we will explain the basics of performance royalty calculation and some factors that may affect your earnings.

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1 What are performance royalties?

Performance royalties are fees that music users pay to PROs for the right to play or perform music in public. Public performance can include radio, TV, streaming, live venues, restaurants, bars, stores, or any other place where music is audible to an audience. PROs collect these fees and distribute them to the songwriters and publishers who own the copyrights of the music.

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Mario Lyte

Director, A&R Administration / A&R - Universal Music Group | Founder at Aces Nation LLC
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Here are some tips for collecting performance royalties: Register your music with a PRO as soon as possible. Keep your PRO contact information up to date. Monitor your royalty statements carefully. Contact your PRO directly if you have any questions or concerns. Examples of when performance royalties are due: Radio stations play a song on the air. TV stations broadcast a song during a show or commercial. Streaming services play a song. Live music venues host a concert and perform a song. Restaurants or bars play a song in their background music. Hotels play a song in their lobby or elevator. Gyms play a song during a workout class.

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2 How are performance royalties calculated?

Calculating performance royalties requires an understanding of several factors, such as the type of music user, the duration and frequency of the performance, the size and nature of the audience, and the value of the music. Each PRO has its own formula to determine how much each music user pays and how much each songwriter and publisher receives. Generally, this formula is based on a base rate, a performance credit, a royalty pool, and a share percentage. The base rate is the amount charged per performance or per unit of time for a certain type of music user. The performance credit is the value assigned to each performance based on its duration and frequency. The royalty pool is the total amount collected from a certain type of music user in a given period. And finally, the share percentage is the percentage of the royalty pool allocated to each songwriter and publisher based on their performance credits.

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Mario Lyte

Director, A&R Administration / A&R - Universal Music Group | Founder at Aces Nation LLC
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Performance royalties can be a significant source of income for songwriters and publishers, especially if their music is played frequently. Here is a simplified example of how performance royalties might be calculated: A radio station plays a song 100 times in a month. The radio station has a license agreement with a PRO that pays a royalty rate of $0.001 per play. The PRO collects $0.10 in royalties from the radio station for the song. The PRO distributes the royalties to the songwriters and publishers of the song based on their ownership shares. In this example, the songwriters and publishers would each receive $0.05 in royalties. Performance royalties are typically paid out on a quarterly or semi-annual basis.

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3 What factors affect performance royalties?

Performance royalties may vary depending on several factors, such as the PRO you belong to, the country or region you are in, the type and quality of the music user, and the genre and style of your music. For instance, BMI may pay more than ASCAP for streaming, but less than ASCAP for TV. Additionally, some countries may have a statutory rate for streaming, while others may have a negotiated rate. Furthermore, a national radio station may pay more than a local radio station, and a premium streaming service may pay more than a free streaming service. Finally, pop music may have more chances to be played on radio and TV, while classical music may have more chances to be played in live venues and restaurants. All these factors can affect your performance royalties and the exposure and popularity of your music.

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4 How can you track and collect performance royalties?

To track and collect performance royalties, you need to register your songs with a PRO and a sound recording database, report your performances to your PRO, and check your statements and payments from them. Joining a PRO as a songwriter or publisher will allow them to identify and monitor your music, while registering with a sound recording database will enable you to receive performance royalties for the sound recording. Additionally, you should submit setlists if you perform your songs live. Lastly, regularly check your statements and payments from the PRO and compare them with other sources of information. If you find any errors or discrepancies, contact the PRO promptly to resolve them.

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Mario Lyte

Director, A&R Administration / A&R - Universal Music Group | Founder at Aces Nation LLC
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In addition to joining a PRO, songwriters and publishers may also want to consider using a tracking service. Tracking services can help to capture more performance royalties from venues, broadcasters, and digital platforms that may not report music accurately or at all. Here are some tips for tracking and collecting performance royalties: Keep accurate records of your performances. Monitor your reports from your PRO and tracking service. Follow up with businesses that may not be reporting your music accurately. Contact your PRO or tracking service if you have any questions or concerns.

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5 How can you increase your performance royalties?

To increase your performance royalties, you need to take the following actions. Firstly, you should promote and market your music to music users and audiences to increase the demand and preference for your music. You can use social media, playlists, blogs, podcasts, or collaborations to reach and engage your target market. Secondly, you should enhance and protect the value and recognition of your music by using metadata, tags, watermarks, or codes. Additionally, you can use awards, reviews, ratings, or endorsements to establish and improve your reputation as a songwriter or a publisher. Lastly, you should expand and improve your music catalog by using co-writing, sampling, remixing, or covering. You can also use editing, mixing, mastering, or encoding to optimize and refine your music for different platforms.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you calculate performance royalties?

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1 What are performance royalties?

2 How are performance royalties calculated?

3 What factors affect performance royalties?

4 How can you track and collect performance royalties?

5 How can you increase your performance royalties?

6 Here’s what else to consider

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