Understanding Royalties: How Artists and Producers Actually Get Paid

What Are Music Royalties?

Royalties are payments made to rights holders (like artists, producers, and songwriters) when their music is used or played. If your music is on Spotify, YouTube, radio, TV, or even performed live there’s likely a royalty involved.

There are three main types of royalties you need to understand:

1. Performance Royalties

2. Mechanical Royalties

3. Sync Royalties

If you’re not set up correctly, you’re probably missing money.

1. Performance Royalties

Performance royalties are generated when your song is:

• Streamed on Spotify, Apple Music, Pandora, etc.

• Played on the radio

• Performed live (by you or someone else)

• Played in a public place (bars, stores, etc.)

These royalties are collected by Performing Rights Organizations (PROs) like:

• ASCAP

• BMI

• SESAC (invite only)

Who Gets Paid:

• Songwriters

• Publishers

If you’re both the writer and publisher (like most indie artists), you can collect both shares.

How to Collect:

1. Sign up with a PRO (ASCAP or BMI are the easiest for U.S. artists)

2. Register each song you release

3. Make sure you have a publishing entity registered (ASCAP lets you register both; BMI requires a separate publisher account)

2. Mechanical Royalties

Mechanical royalties are paid every time your song is reproduced — digital downloads, streams, physical CDs/vinyl, etc.

You earn these when someone:

• Buys your song on iTunes or Amazon

• Streams your song (yes, streaming also generates mechanicals)

• Covers your song and releases it

Who Pays Out:

• Streaming services like Spotify and Apple pay mechanicals through a Mechanical Rights Organization

In the U.S., the key org is:

• The MLC (Mechanical Licensing Collective)

How to Collect:

1. Register for free at themlc.com

2. Add all your released tracks

3. Make sure your metadata is accurate (songwriter, publisher, ISRC, etc.)

If you don’t register with The MLC, you could be missing out on hundreds or thousands in unpaid royalties — especially from Spotify and Apple.

3. Sync Royalties

Sync royalties come from sync licensing, which is when your music is used in:

• TV shows

• Movies

• Commercials

• Video games

• YouTube videos

These are often one-time payments negotiated upfront. If the music airs publicly, it may also generate performance royalties later on.

Who Gets Paid:

• Whoever owns the composition (songwriter/publisher)

• Whoever owns the master recording (usually the label or the artist)

How to Collect:

• You need a licensing agreement with whoever’s using your song

• You can pitch your music to music supervisors, sync libraries, or via licensing platforms

Some sync licensing platforms include:

• Songtradr

• Musicbed

• Artlist

• Pond5

Or you can handle it DIY if someone approaches you for usage — just make sure you get it in writing.

Bonus: Digital Royalties for Producers & Beatmakers

If you produce beats and sell or lease them, you should be collecting:

• Your producer share of publishing

• Royalties from beat placements (register your beats with ASCAP/BMI just like full songs)

• Mechanical and performance royalties if the artist releases it on DSPs

Don’t rely only on beat sales, get that backend.

If you’ve got a question or need help figuring out which royalties you’re missing, post below or reach out to the Sarcasmix team. Let’s get you paid.