What are music royalties? Every type explained for independent artists

Music royalties are payments made to rights holders whenever their music is used commercially. They are not a single payment — they are multiple separate income streams flowing through different organisations, generated by different uses, and reaching different rights holders for different reasons.

Most independent artists who think about royalties think about streaming income. Streaming income is one royalty stream from one income channel. A professionally managed music catalog can generate six distinct types of royalties from dozens of different sources simultaneously.

The six types of music royalty

1. Performance royalties

Performance royalties are earned when a composition is publicly performed — broadcast on radio, played on television, performed live in a venue, played as background music in a commercial space, or streamed on a platform that pays performance royalties.

Who pays: broadcasters (BBC, ITV, commercial radio, streaming platforms) pay licence fees to collecting societies which distribute the income to rights holders.

Who receives: the songwriter and their publisher. Performance royalties are a composition right — they flow to the owners of the song, not the owners of the recording.

Who collects in the UK: PRS for Music. Performance royalties are distributed quarterly.

2. Mechanical royalties

Mechanical royalties are earned when a composition is reproduced — physically (vinyl, CD), digitally downloaded, or streamed on a platform with mechanical licensing agreements.

The name comes from the mechanical printing presses that reproduced sheet music in the 1800s. The principle — that the composition rights holder is paid when their work is reproduced — has carried through to the streaming era.

Who pays: for physical reproduction, record labels or manufacturers pay mechanical royalties. For streaming, the platforms themselves pay through licensing agreements.

Who receives: the songwriter and their publisher.

Who collects in the UK: MCPS (Mechanical-Copyright Protection Society), which operates under PRS for Music.

3. Synchronisation royalties (sync fees)

Sync royalties are earned when a composition is licensed for use in synchronisation with visual media — film, television, advertising, games, YouTube videos, social media content.

Unlike the other royalty types, sync fees are not collected by a collecting society. They are negotiated directly between the rights holder and the user of the music. Each placement is a separate negotiation producing a separate one-off payment. See what is sync licensing for how this works.

Who pays: the production company, brand, or content creator.

Who receives: the composition rights holder (sync licence) and the sound recording rights holder (master use licence).

Who collects: the rights holder directly, or their publisher or sync agent.

4. Print royalties

Print royalties are earned when printed sheet music of a composition is published and sold.

Who pays: music publishers who print and distribute sheet music.

Who receives: the songwriter and their publisher.

Who collects in the UK: MCPS.

This is the smallest royalty stream for most independent artists in the streaming era but remains relevant for composers whose work is widely performed in educational, classical, or ensemble contexts.

5. Neighbouring rights royalties

Neighbouring rights are earned by recording artists and record producers when their sound recordings are broadcast on radio or television. This is a separate right from the performance royalty paid on the composition — it compensates the people who made the recording rather than those who wrote the song. See neighbouring rights in the UK.

Who pays: broadcasters, radio stations, streaming services with neighbouring rights agreements.

Who receives: performers featured on the recording, and the record producer/recording rights holder.

Who collects in the UK: PPL (Phonographic Performance Limited). PPL is separate from PRS — neighbouring rights require a separate PPL membership and registration.

In the US, neighbouring rights do not exist for terrestrial radio — this is why the UK and European neighbouring rights income is meaningfully higher for recordings that receive significant radio broadcast.

6. Digital performance royalties (non-interactive streaming radio)

These are royalties from non-interactive digital radio services — platforms like Pandora (US) or certain internet radio stations where listeners cannot choose specific tracks and are instead served a curated stream.

In the US, SoundExchange collects digital performance royalties for sound recordings on non-interactive services. In the UK, PPL handles equivalent collection for broadcast and certain streaming contexts.

For most UK-based independent artists, the distinction between digital performance royalties and neighbouring rights royalties is less practically important than understanding that PPL registration captures the recording-side income from radio and broadcast regardless of the technical category.

How a single stream generates multiple royalties

When a song is streamed on Spotify, multiple simultaneous payments are generated:

For the composition rights holders: MCPS collects a mechanical royalty. PRS collects a performance royalty. Both are paid from the streaming platform's licensing agreements. The split is approximately 50/50 between MCPS and PRS for on-demand streaming in the UK.

For the recording rights holder: the streaming platform pays a master recording royalty, distributed through the artist's digital distributor. For an independent artist who owns their masters, this flows through their distributor (Distrokid, TuneCore, etc.).

For performers on the recording: PPL collects a neighbouring rights royalty when recordings are broadcast. The degree to which this applies to streaming versus broadcast varies by platform and licence type.

This means one stream generates income to the composition rights holders through PRS and MCPS, and to the recording rights holder through the distributor — at minimum. These payments flow through different channels, on different timelines, to potentially different recipients. The master vs publishing rights distinction explains why.

Why most artists underestimate their royalty picture

The royalties that appear in an artist's streaming dashboard represent one income channel — the master recording royalty from the distributor. The composition royalties (PRS and MCPS) arrive separately, quarterly, into a different account, if and only if the artist is a registered PRS member with those works registered.

The neighbouring rights royalties from radio and television broadcast (PPL) arrive into a third account, if the artist is a PPL member with those recordings registered.

Uncollected royalties — from compositions not registered with PRS, from recordings not registered with PPL, from international territories where registration is incomplete — flow into general pools distributed to other registered rights holders rather than to the artist who earned them.

Addressing this systematically means: joining PRS and MCPS, registering every composition; joining PPL, registering every recording; storing ISRCs and ISWCs accurately in TYFRA Vault so every registration can be done correctly and cross-referenced.

Which royalties apply to which role

The royalties any individual is entitled to depends on their role in creating the music:

Songwriter only: performance royalties (PRS), mechanical royalties (MCPS), sync fees on composition, print royalties.

Recording artist only: neighbouring rights (PPL), master recording royalty from distributor, master use fees from sync.

Both songwriter and recording artist: all of the above. This is the position of most independent artists and the reason full royalty collection requires membership of PRS, MCPS, and PPL simultaneously. TYFRA Finance tracks all of these streams in one dashboard.