How Music Royalties Work: The Complete 2025 Breakdown for Artists

TL;DR

Most artists miss mechanical royalties, performance royalties, and sync fees because they don't register properly. You need both a distributor AND a publisher or collection society membership. PRS for Music, MCPS, and PPL each handle different royalty types. Register with all of them.

The Six Types of Music Royalties Explained Simply

Mechanical royalties are generated when your song is reproduced — streamed, downloaded, or pressed onto vinyl. Your distributor collects some of these, but not all. In the UK, MCPS (Mechanical Copyright Protection Society) handles mechanical royalties from certain sources that your distributor doesn't touch. If you're not registered with MCPS, you're leaving money uncollected.

Performance royalties are earned when your music is performed publicly — played on radio, in shops, at live venues, on TV, or streamed. PRS for Music collects these in the UK. Every time your song plays on BBC Radio 1, in a Tesco, or on Spotify, a performance royalty is generated. PRS membership costs a one-time £100 fee and is essential for every UK songwriter.

Recording royalties (also called neighbouring rights) are separate from songwriting royalties. These go to the performers and the recording owner. PPL (Phonographic Performance Limited) collects these in the UK when your recording is played on radio, TV, or in public places. If you're both the songwriter AND the performer, you need both PRS and PPL registrations to collect everything you're owed.

The Collection Chain: Who Pays What to Whom

Here's where it gets complicated — and where most artists lose money. When your song is streamed on Spotify, multiple royalty payments are triggered. Spotify pays your distributor (DistroKid, TuneCore, etc.) for the recording rights. Spotify also pays the publishing/mechanical royalties, which flow through a complex chain involving your publisher, PRS, MCPS, and potentially foreign collection societies.

If you don't have a publisher, you can self-publish through PRS for Music, which also administers MCPS. This means registering your songs with PRS so they know you wrote them. Without this registration, the performance and mechanical royalties from streaming sit in a black box, often going unclaimed for years before being distributed proportionally to other rights holders. That's your money going to someone else.

For live performance, the venue pays a PRS licence fee which goes into a pot that's distributed based on setlists and data. Make sure you submit your setlists after gigs — PRS can only pay you for performances they know about. This is free money that most emerging artists forget to claim.

How Streaming Royalties Are Actually Calculated

Spotify doesn't pay a fixed per-stream rate. Instead, your share is calculated based on your proportion of total streams in your country, multiplied by the royalty pool for that month. This means per-stream rates fluctuate depending on total platform listening and total royalty payments.

In practice, UK artists typically see between £0.003 and £0.005 per stream on Spotify, though this varies significantly. Apple Music tends to pay higher per-stream (around £0.007-0.01) because it has fewer free-tier listeners diluting the pool. Tidal, Amazon Music, and YouTube Music all have different rates.

The total payment for a stream is split roughly 70/30 — 70% to rights holders, 30% to the platform. Of that 70%, roughly two-thirds goes to the recording owner (via your distributor) and one-third to the songwriters and publishers (via PRS/MCPS or your publisher). If you own both the recording and the songwriting, you should be receiving both shares.

Sync Licensing: The Revenue Stream Most Artists Overlook

Sync licensing — placing your music in films, TV shows, adverts, video games, and online content — is potentially the most lucrative revenue stream for independent artists. A single sync placement in a TV advert can pay more than a million Spotify streams.

To be sync-ready, you need to own or control both the master recording and the publishing rights. For independent artists who write, record, and release their own music, this is usually the case. You also need clean, well-produced recordings with no uncleared samples.

Getting sync placements requires either a sync agent (who pitches your music to supervisors for a commission), a publisher with sync connections, or direct relationships with music supervisors. Services like Musicbed, Artlist, and Epidemic Sound offer non-exclusive sync licensing platforms where you can list your music. The fees are lower than direct placements but the volume can add up significantly.

The Action Plan: Collecting Every Penny You're Owed

Step one: register with PRS for Music as a songwriter (£100 one-time fee). This covers both PRS (performance royalties) and MCPS (mechanical royalties). Register every song you've ever written in their catalogue.

Step two: register with PPL as both a performer and a recording rights holder if you own your masters. This ensures you collect neighbouring rights royalties when your recordings are broadcast or played publicly.

Step three: ensure your distributor metadata is correct — song titles, ISRC codes, ISWC codes, and credits must match your PRS and PPL registrations exactly. Mismatches cause missed payments.

Step four: consider a publishing administrator (Sentric, Songtrust, TuneCore Publishing) if you want someone to actively chase your royalties globally. They take a commission (typically 10-20%) but often collect money you'd never find on your own, particularly from foreign territories.

Step five: submit setlists after every live performance, register your music with sync libraries, and keep your metadata clean across all platforms. Royalty collection is an ongoing process, not a one-time setup.