Performance Royalties and PROs

What They Are, When They're Generated, Who Gets Them, and How They're Collected

Feb 12, 2025

(TL;DR at the bottom)

Opening Statement

When Order In The Pit was still just an idea, I reached out to some of my favorite bands and other industry professionals to pick their brains and find out what they wish they’d known about sooner and what they felt younger artists need to know as they get started in their careers. Luckily, many responded and were eager to share their past mistakes, insights, and suggestions (THANK YOU). The topic of performance royalties came up again and again in these conversations. I’ve been eager to dive into the topic of performance royalties, but first had to set the stage by explaining the concepts of intellectual property, copyrights, and publishing, which we’ve now done.

The purpose of this article is to help readers understand some of the basics of performance royalties, what they are, when they’re generated, who gets them, and how they’re collected and paid out. Keep in mind as you read that we are doing a broad strokes overview of performance royalties and PROs (Performance Rights Organizations) so that you can get familiar with the lingo and know what to look out for. It’s important to understand that although we are attempting to simplify this topic, there are hundreds of little wrinkles, intricacies, and exceptions that we simply cannot cover in a single writing. We will go over common arrangements, but be aware that many aspects can be, and often are, negotiated to fit the needs of each party on a case-by-case basis. This article merely gives you a starting point for the discussions you will eventually need to have with your band, your attorney, record labels, music publishers, etc.

First, we’ll briefly recap some key concepts. Second, we’ll do a quick intro to royalties in general and then clearly define “performance royalties”, when they’re generated, how they’re calculated, and who gets paid. Third, we’ll discuss the roles of PROs (Performance Rights Organizations), how they work, and what the alternatives are. Fourth, we’ll go over some common misconceptions about performance royalties and some steps you can take to make sure you don’t miss out on performance royalties. And, lastly, we’ll look into the future and discuss changing trends and the future of performance royalties and PROs.

As always, underlined terms are links that will shoot you to specific sections of prior relevant articles.

Rewind

Here is a snapshot of two key concepts that you need to understand:

1. One Song, Two Rights

A single recorded song is composed of two distinct legal rights, each of which can have different owners and generate separate streams of revenue:

The “composition copyright” - the song itself (the melody, lyrics, chords, structure, etc.) (aka: “song copyright”). Performance royalties are paid to those with rights in the composition.
The “master copyright” - the actual recording of the song (aka: “sound recording copyright”). Different types of royalties are paid to those with rights in the sound recording.

2. Publishing

A music publisher is a person or company that promotes songs and ensures that songwriters (and/or other owners of the composition) receive royalties and licensing fees when their songs are played or used. In general, under a publishing deal, the publishing rights in a song’s composition are split evenly between the songwriter and the publisher (the “50/50 split”). There are pros and cons to using a publisher, and you do have the option to self-publish.

Royalties in General

If you own any rights in a song, you are considered a “rights holder”. In the most simple terms, royalties are payments made to rights holders whenever a song is used (i.e., played, reproduced, distributed, performed, streamed, licensed, etc.). There are many types of royalties, for example, mechanical royalties, performance royalties, sync royalties, print royalties, neighboring rights royalties, etc. Each type of royalty is collected and distributed in different ways. This article is only about performance royalties.

This might also be a good time to introduce you to a term you’ve probably heard before: royalty splits. Royalty splits refers to how revenue from a song is divided among the people involved in its creation, production, and distribution. These splits determine how much each contributor earns from streaming, sales, licensing, and other uses of the song.

Now, let’s get into performance royalties.

Performance Royalties

When you hear “performance royalties,” you’re probably thinking of a band literally performing a song live. However, the term “performance,” in the context of performance royalties, really just means when a song is played in a public setting. So, this can include when a song is played on a satellite or internet radio station, on TV, in an elevator, at a mall, at the gym, at a bar, performed live at a show by the original band, covered by another band, spun by a DJ, played on the stereo between sets, selected on a jukebox, etc. Each time a song is played, it’s considered a performance of the song, and it generates performance royalties.

On the other hand, the following scenarios are NOT considered a performance of the song, and therefore do not generate performance royalties (although they generate other types of royalties!): when a song is reproduced (i.e., pressed on vinyl pressing of a vinyl), or when a song is purchased (i.e., downloaded or bought on CD).

Who Receives Performance Royalties?

Remember the whole one-song-two-rights thing? (if not, check this out). Performance royalties are paid to owners of the composition of a song (which is different from the sound recording of the song).

Who owns the composition of a song? Well, that of course depends on who wrote/composed the song and whether a deal was made with a publisher. A common industry standard, which we’ll use as a reference in this article, is that the songwriter retains 50% of the composition (the writer’s share), while the publisher owns the other 50% (the publisher’s share). However, ownership splits can vary based on agreements. If you self-publish, you retain 100% of both the writer’s and publisher’s shares.

How are performance royalties calculated?

Contrary to popular belief, performance royalties are not calculated simply on a play-by-play basis. Performance royalties are instead calculated based on a variety of factors, including but not limited to, where the song is played, when it is played, how it is played, the size of the audience, terms of licensing agreements, and the specific (and sometimes secret) formulas used by the relevant PRO (we’re about to get into PROs, keep reading).

How are performance royalties collected and paid out?

Performance royalties are collected, calculated, and paid out by PROs.

PROs

What is a PRO?

PROs (Performance Rights Organizations) are entities that collect and distribute performance royalties. Most PROs are nonprofit organizations, and, while they do collect fees to cover their operating costs, those that operate as nonprofits do not generate revenue for shareholders like normal corporations do. Some, however, are for-profit companies, while others (like, in China) are government controlled.

PROs popped up in the late 1800s/early 1900s out of necessity. Before the birth of PROs, songwriters and publishers had the near-impossible task of tracking the use of their own music and collecting royalties by negotiating directly with theaters, concert halls, radio stations, and the like, or checking in with music stores to see how much of their sheet music was sold. It was total chaos, and as society’s enjoyment of musical entertainment began booming, it became entirely untenable for artists and music publishers to track and negotiate their fair share of royalties.

The first PRO in the world, Société des Auteurs, Compositeurs et Éditeurs de Musique (SACEM), was founded in France in 1851.The first US PRO, American Society of Composers, Authors, and Publishers (ASCAP), was founded in 1914, by a group of songwriters, composers, and music publishers in New York City. ASCAP was initially met with resistance from those they demanded payments from (clubs, radio stations, etc.), but, after a few serious legal battles, ASCAP gained its footing and established itself as a legitimate and respected organization. As ASCAP began increasing licensing fees for radio stations and broadcasters in the 1930s, the National Association of Broadcasters created their own alternative to ASCAP, called Broadcast Music, Inc. (BMI). We’ll do another article soon on ASCAP vs. BMI. The differences are quite interesting.

Where are all the PROs?

We’ve gone through the more notable PROs, SACEM in France, and ASCAP and BMI in the US. Many countries have also established their own PROs. Here’s a list of PROs around the world:

APRA AMCOS (Australasian Performing Right Association / Australian Mechanical Copyright Owners Society)
GEMA (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte) (Germany)
IPRIS (Indian Performing Right Society)
JASRAC (Japanese Society for Rights of Authors, Composers, and Publishers)
MCSC (Music Copyright Society of China)
PRS for Music (Performing Rights Society) (UK)
RAO (Russian Authors' Society)
SACM (Sociedad de Autores y Compositores de México)
SADAIC (Sociedad Argentina de Autores y Compositores de Música)
SAMRO (Southern African Music Rights Organization)
SESAC (Society of European Stage Authors and Composers)
SGAE (Sociedad General de Autores y Editores) (Spain and Latin America)
SIAE (Società Italiana degli Autori ed Editori)
SOCAN (Society of Composers, Authors and Music Publishers of Canada)
UBC (União Brasileira de Compositores) (Brazil)

How do PROs work?

Each PRO is slightly different, and some are invite-only, but the general gist of how PROs work is as follows:

Registration:
Songwriters, composers, and publishers join a PRO by following the PROs registration procedures. First, you sign up as a songwriter and/or a publisher, then you register each song and declare your percentage of ownership (ASCAP’s registration site is here, and BMI’s is here). Sometimes there are registration fees. In general, songwriters can only register with one PRO at a time, while publishers may register with multiple PROs (since they are probably publishing music for multiple songwriters who’ve joined different PROs). Properly registering your songs with a PRO is critical to getting paid. It’s too easy to make mistakes and lose out on royalties. We’ll do a separate article on the registration process, as well as how to recover unclaimed royalties.
Licensing:
The PRO issues licenses in exchange for a monthly or annual fee to venues, TV networks, radio stations, and other businesses and platforms that make music available to the public. These licenses allow the business or platform to play music from the PROs catalog. The fee for these licenses depends on many factors including the size of the business or venue, the size of the audience, the type of performance, the frequency of play, etc. A small bar may pay a few hundred bucks a year for their license, while a massive stadium may pay thousands per event.
Monitoring and tracking:
The PRO monitors and tracks the use of songs through various means and methods. Some methods include sample surveys, digital monitoring, third-party reports, cue sheets and station logs from TV and radio, data provided by streaming platforms, self-submission reports, random surveys, etc. Bands can also submit their setlists after every show to their PRO to make sure every play counts.
Calculations:
The PRO then pools together all of the licensing fees it’s received, deducts enough to cover its operating expenses (if its a nonprofit), then analyzes the data on the usage of the songs and runs its calculations to determine how much should be paid to whom.
Payment:
The PRO then makes scheduled payments (typically quarterly) of royalties to the various registered rights holders. Payments are usually made once certain minimums are met, and are made by either direct deposit or check.

If you’re curious, which I hope you are, you can check out ASCAP’s FAQ page here, and BMI’s FAQ page here. These will for sure shoot you down a bunch of interesting rabbit holes.

Criticisms of PROs

So, it seems really cool that these (mostly) nonprofit organizations exist to serve artists. How nice of them, right? But, PROs are not without flaws and face a lot of serious criticism. The following are some major complaints that some artists have about PROs:

Lack of transparency in how performance royalties are actually calculated.
PROs’ reliance on sample surveys, instead of literally counting every play, is not fair to smaller artists and can often leave them out.
It can take months, even years, to receive payment for a performance.
The fact that there are only two major PROs in the US means there’s a severe lack of competition, which is detrimental to artists.
PROs aren’t adjusting quickly enough to the digital streaming age.
There’s a sense that PROs favor big labels over independent artists.

It might be prudent for artists to check out what the groups who are advocating for change, like SONA (Songwriters of North America) and FMC (Future of Music Coalition), are saying and doing.

Alternatives to a PRO

So you don’t want to register with a PRO but still want to receive performance royalty payments? There are alternatives, but they require some extra work, may cost you more, and also have some limitations. Some of the alternatives include charging venues directly for the use of your music, collecting directly from streaming platforms (but then you’ll miss out on radio, TV, and live performance royalties), license your music directly to businesses and venues (but that requires a separate contract with each one), etc. This also assumes that the venues are even willing to negotiate with you. You can also engage the service of a third-party Publishing Administrator who coordinates with PROs on your behalf (but you have to pay them extra to do this). Joining a PRO can save you the hassle of having to negotiate deals with every individual venue or business that plays your music, and their massive infrastructure may ensure less royalties are missed. It’s a balance of the pros and the cons.

Common Misconceptions about PROs

Below are some common misconceptions about performance royalties and PROs:

You get paid every time your song is streamed - FALSE. If the song isn’t registered with a PRO, you won’t receive performance royalties when your music is played. Furthermore, even when registered with a PRO, performance royalties aren’t necessarily calculated on an $X per stream basis.
ASCAP or BMI will collect all royalties for my songs - FALSE. PROs only collect and pay performance royalties. Other types of royalties (i.e., mechanical, sync, print, etc.) are collected and paid by different organizations and entities.
Registering with one PRO means you're set, worldwide - FALSE. Most PROs have agreements with PROs of other countries, but they aren’t always automatic or accurate.
PROs are only for big bands with lots of listeners - FALSE. You should register all of your songs with a PRO. Plus, if your song gets picked up for something big, you want it to already be registered so that you can start raking in performance royalties from day 1.

Don’t Miss Out on Performance Royalties

Here are a few things you can do to make sure you don’t miss out on performance royalties:

Before releasing any songs, have a clear written agreement on who owns the composition of the song, and what the publishing split will be. Disputes can delay payments and even result in costly legal battles.
Register your songs with a PRO and make sure that PRO registration is accurate. Every band member that has ownership in a song should register and claim their percentage. “Good enough” is not good enough here.
Make sure the venues where you play have PRO licenses.
Submit your setlist after every live show to the PRO.
Consider using a third-party royalty admin service to track worldwide play.
Consider working with a professional music publisher. Yes, they cost money, but they have the knowledge, experience, contacts, and infrastructure to help you collect royalties, identify errors, and gain exposure. Read our article, Music Publishing Explained: What it Is and How it Works, for more info on publishing deals and what you need to be aware of before signing anything.
And, my favorite, TALK TO OTHER ARTISTS. Find out what the bands you play with or look up to are doing. Business doesn’t need to be a taboo topic, and you'll likely find that most musicians are willing to help you succeed and avoid mistakes (especially mistakes they’ve already made).

The Future (or the Inevitable End?) of PROs

The ways in which we consume music have expanded and changed dramatically since the emergence of PROs. That fact, coupled with exponential tech advancement means that royalty structures can and must evolve as well. There are some really cool things in the pipeline in terms of royalty collection. AI and blockchain tech will help track song plays with absolute precision. Streaming and social media plays will become more and more important. And there is hope for and movement towards paying live bands their performance royalties directly and quickly. It’s important for you to understand how things currently work, but it’s equally, if not, more, important for you to be aware of upcoming changes and trends so that you can be prepared to hop on board.

Closing Remarks

If you made it this far - great job and thank you for reading. I hope you leave with a slightly better understanding of performance royalties and PROs, or at least a greater sense of curiosity about them.

As always, the topics covered here contain more twists, turns, and caveats than can possibly be addressed in a single article, and attorneys are constantly wrestling with the gray areas of the relevant laws. This article is merely a broad stroke of the fundamentals and should not be considered as a complete explanation of performance royalties of PROs in any way.

Up next we’ll be looking at some of the other types of royalties and how those are calculated and collected.

Let us know what other topics you’d like to know more about!

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The above content is for general informational purposes only and is not intended as legal advice. While it provides insights into legal issues, it does not create an attorney-client relationship. For legal advice, please consult a licensed attorney.

TL;DR

Performance royalties are payments made to songwriters and publishers whenever their music is played publicly (radio, TV, streaming, live performances, etc.). These royalties are collected and distributed by PROs (Performance Rights Organizations) like ASCAP and BMI, which issue licenses to businesses and track song usage. Common misconceptions include thinking PROs collect all royalties (they don’t! Mechanical and sync royalties are separate) and assuming all streams generate the same amount. To maximize earnings, bands should register their songs with a PRO, submit setlists for live shows, and consider using royalty collection services. The future of performance royalties is shifting with AI, blockchain, and direct artist payment models, so staying informed is key to ensuring you get paid what you’re owed.