💰 The Ultimate Guide to Music Licensing and Royalties: What Every DIY Artist Needs to Know

As a DIY artist, creating music is only half the battle. To truly succeed and make a sustainable income, you need to master the world of music licensing and royalties. It can seem like a confusing maze of acronyms and percentages, but understanding the core concepts of Mechanical, Performance, and Synchronization (Sync) royalties is your key to getting paid what you deserve.

This guide breaks down the essential information you need to register your music correctly with organizations like BMI/ASCAP and other collection societies, ensuring you capture every possible stream of income.

🎵 Understanding the Three Core Royalty Types

A single song generates income from two main copyrights: the Musical Composition (the melody and lyrics—the “song” itself) and the Sound Recording (the actual master recording). Different royalties are tied to these two distinct rights.

Here is a breakdown of the three major royalty types:

1. Performance Royalties (Composition Right)

• What it is: Money paid to the songwriter and publisher whenever a musical work is played or performed publicly.

• When it’s earned:

  • Radio airplay (AM/FM and satellite)

  • Streaming services (e.g., Spotify, Apple Music—interactive and non-interactive plays)

  • Played in public venues (bars, clubs, restaurants, retail stores, gyms, live concert venues)

  • Broadcast on TV or film (this overlaps with Sync, but covers the public performance of the composition)

• Who collects it: Performing Rights Organizations (PROs). In the U.S., the primary PROs are:

  • ASCAP (American Society of Composers, Authors, and Publishers)

  • BMI (Broadcast Music, Inc.)

  • SESAC (Society of European Stage Authors and Composers – invite-only)

2. Mechanical Royalties (Composition Right)

• What it is: Money paid to the songwriter and publisher whenever a song is reproduced (copied) in a physical or digital format.

• When it’s earned:

  • Sale of physical formats (CDs, vinyl records)

  • Digital downloads (e.g., iTunes)

  • Interactive streaming (when a listener chooses a specific song on Spotify or Apple Music, a mechanical royalty is generated for the reproduction of the song data).

• Who collects it: Mechanical Rights Organizations (MROs) and collection societies. In the U.S., the main organization for digital mechanical royalties from streaming services is:

  • The Mechanical Licensing Collective (The MLC)

3. Synchronization (Sync) Royalties (Composition and Master Right)

• What it is: A fee paid for the right to use a song and its master recording in timed relation with visual media. This is a one-time fee negotiated and paid to the copyright owners (songwriter/publisher for the composition, and artist/label for the master recording).

• When it’s earned:

  • Film and TV shows

  • Commercials

  • Video games

  • YouTube videos (often referred to as a “micro-sync” license)

• Who collects it: Usually managed directly by the publisher (or the self-published songwriter) and the master rights owner (the artist or label).

🛠️ The DIY Artist’s Action Plan: How to Register Your Royalties

Don’t let your money sit unclaimed in the “black box” of unmatched royalties. Proper registration is non-negotiable!

Step 1: Join a Performing Rights Organization (PRO)

You must join a PRO to collect your Performance Royalties. You can only join ONE PRO as a songwriter in the U.S.

• Choose a PRO: Research BMI and ASCAP. Both are excellent choices, and your decision often comes down to personal preference or their specific fee structures.

  • Register as a Songwriter: This is the first step.

  • Register as a Publisher: Since you are a DIY artist, you are your own publisher. PROs split royalties 50/50 between the Writer’s Share and the Publisher’s Share. If you don’t register a publishing company (often a “vanity” company name), you will only receive the Writer’s Share.

    • BMI: Often pays the songwriter both shares (100%) if no publisher is registered.

    • ASCAP: You must register a separate publishing entity (and pay a separate registration fee) to collect the Publisher’s Share.

Step 2: Register with The Mechanical Licensing Collective (The MLC)

For all your digital Mechanical Royalties generated by U.S. streaming, you need to register with The MLC.

• The Process: Visit TheMLC.com, sign up as a member, and use their Connect to Collect® initiative to submit your musical works data.

• Why it’s crucial: The MLC is now the sole entity in the U.S. responsible for collecting these crucial streaming royalties. Don’t skip this step!

Step 3: Register Your Sound Recordings with SoundExchange

While PROs collect royalties for the Composition, SoundExchange collects a specific type of Performance Royalty for the Sound Recording (Master). This is often called a “Neighboring Right” or “Digital Performance” royalty.

• What it is: Royalties earned from non-interactive digital transmissions of your master recording.

• When it’s earned: Satellite radio (SiriusXM), Pandora (non-interactive streams), and webcasters.

• Who collects it: SoundExchange.

• The Split: SoundExchange distributes royalties to the Master Right Owner (usually the label or the self-releasing artist, 50%), the Featured Artist (45%), and Non-Featured Artists (5%).

Step 4: Submit Your Song Information (Metadata)

Once you’re affiliated with all the necessary organizations, you must register each individual song with them. This process requires accurate, consistent, and complete data (metadata) across all platforms:

Tip: Working with a publishing administrator (like Songtrust or CD Baby Pro Publishing) can simplify this massive task, as they affiliate you with multiple global collection societies and handle the registration paperwork for a percentage of the royalties collected.

📈 Maximize Your Music Royalty Income

• Accurate Data is King: The single biggest reason for unclaimed royalties is inaccurate metadata. Double-check all titles, splits, and codes.

• Global Registration: Your U.S. PRO (BMI/ASCAP) has reciprocal agreements with international societies to collect foreign Performance Royalties. However, you’ll need to use The MLC for US Mechanicals and often a Publishing Administrator for Ex-US Mechanicals to ensure global coverage.

• Embrace Sync: Actively pitch your music for sync licensing opportunities. A well-placed sync in a commercial or TV show can lead to a significant upfront fee and ongoing performance royalties.

Getting paid in the music industry requires proactive registration. By understanding the difference between Performance, Mechanical, and Sync royalties and taking the necessary steps with PROs (ASCAP/BMI), The MLC, and SoundExchange, you transform from just an artist into a successful, self-administered music entrepreneur.