Mechanical vs Performance Royalties Explained

Mechanical royalties are paid when your composition is reproduced. Performance royalties are paid when your composition is played publicly. Both come from the same copyright, but they are triggered by different uses, collected by different organizations, and often missed by different artists. Understanding the distinction is the difference between collecting half your composition income and collecting all of it.

Every time someone streams your song, you earn both mechanical and performance royalties. Most artists only collect one.

The confusion exists because both royalty types come from the composition, not the master recording. They both go to songwriters. They both involve organizations with acronyms. And neither one shows up automatically in your distributor payments.

But they are triggered by completely different actions and collected by completely different entities. Miss one registration and you leave real money uncollected.

This guide explains how these royalties work, where they come from, and exactly who pays whom. For the complete overview of all six royalty types, see Music Royalties Explained: The 6 Types You Earn.

The Core Difference

Streaming appears in both columns. A single Spotify stream triggers both royalty types simultaneously. Missing either registration means leaving money on the table for every single play.

Mechanical Royalties: The Reproduction Right

"Mechanical" is an old term from the days when music was physically manufactured. Pressing a vinyl record or burning a CD required a mechanical process that reproduced the composition. The songwriter got paid for each copy made.

The concept still applies in the digital age. When a streaming platform makes your song available for playback, it is technically creating a "mechanical reproduction" of your composition. The law treats this the same as pressing a physical copy.

What Triggers Mechanical Royalties

• Every stream on Spotify, Apple Music, Amazon, YouTube Music, Tidal, and other DSPs

• Every download purchased on iTunes or other download stores

• Every physical copy manufactured (CDs, vinyl, cassettes)

• Every cover song recorded by another artist (they owe you mechanicals)

Who Collects Them

In the US: The Mechanical Licensing Collective (The MLC) collects digital mechanical royalties from streaming platforms. This organization was created by the Music Modernization Act in 2018 and began operations in 2021.

For physical products: The Harry Fox Agency traditionally handled mechanical licensing for CDs and vinyl. Many labels still use HFA for physical releases.

If you do not register: The money sits unclaimed. After a holding period, it gets redistributed to registered publishers based on market share. Your money goes to someone else.

The Math on a Million Streams

Mechanical royalties from streaming typically run $0.0005 to $0.001 per stream. On one million Spotify streams, that is approximately $500-$1,000 in mechanical royalties alone. This is separate from what your distributor pays you for the master and separate from performance royalties through your PRO.

If you are not registered with The MLC, that $500-$1,000 disappears into holding or redistribution.

Performance Royalties: The Public Performance Right

Performance royalties are paid whenever your composition is "performed publicly." The legal definition is broad. It covers radio airplay and concert performances, but also a coffee shop playing Spotify or a gym using a streaming service for background music.

What Triggers Performance Royalties

• AM/FM radio airplay

• Satellite radio (SiriusXM)

• Streaming plays on Spotify, Apple Music, and other platforms

• Live performances at venues (the venue pays a blanket license)

• Music played in businesses, restaurants, and retail stores

• TV broadcasts, including streaming services like Netflix

Who Collects Them

In the US: Performing Rights Organizations (PROs) collect performance royalties. You register with one: ASCAP, BMI, or SESAC. Your PRO negotiates blanket licenses with broadcasters, venues, and platforms, then distributes collected fees to registered songwriters based on tracked performances.

The Math on a Million Streams

Performance royalties from streaming typically run $0.001 to $0.002 per stream. On one million Spotify streams, that is approximately $1,000-$2,000. Paid by your PRO, not your distributor. Arrives quarterly, 6-9 months after plays occur.

Combined with mechanical royalties, your total composition income from one million streams is roughly $1,500-$3,000. This is entirely separate from what your distributor pays for the master recording.

Why Streaming Triggers Both

This is where artists get confused. One stream on Spotify generates both royalty types because the legal framework treats streaming as two separate actions:

1. Reproduction: The platform makes the song available for playback (mechanical)

2. Performance: The listener hears the song (performance)

Two actions, two royalty types, two collection entities. If you only register with your PRO, you collect performance royalties but miss mechanicals. If you only register with The MLC, you collect mechanicals but miss performance royalties.

Both registrations are free. Both take about 15 minutes. There is no reason to collect only one.

How the Money Flows for a Spotify Stream

Three separate payments come from one stream, through three different entities, arriving at different times over the following 3-9 months:

1. Spotify pays streaming royalties (master side) to your distributor, who pays you

2. Spotify pays mechanical royalties (composition side) to The MLC, who pays you (if registered)

3. Spotify pays a blanket license fee to PROs, and your PRO pays you performance royalties (if registered)

The Radio Exception

In the US, terrestrial AM/FM radio pays performance royalties but not mechanical royalties. The rationale dates to a 1909 law that treated radio as promotion. SiriusXM and internet radio pay both, but traditional AM/FM does not generate mechanicals. Radio airplay goes through your PRO only.

Registration Checklist

For performance royalties:

1. Register with ASCAP or BMI (free)

2. Add each song as a "work" with title, writers, and ownership splits

3. Include your IPI number on all registrations

For mechanical royalties:

1. Register with The MLC at themlc.com (free)

2. Complete your songwriter profile

3. Add your catalog with ISRCs and release dates

Both registrations can be done in an afternoon. The ongoing maintenance is adding new songs as you release them. If you are building a music career as an independent artist, these registrations are the highest-ROI action you can take for your catalog.

Common Mistakes

Thinking your distributor handles mechanicals. Your distributor collects master recording royalties only. Mechanical royalties from the composition side require separate MLC registration.

Registering with a PRO but not adding songs. Joining ASCAP does not register your catalog. You must add each song individually as a work. Songs not registered as works generate no matched payments.

Confusing master royalties with composition royalties. What your distributor pays is the master side. Mechanical and performance royalties are the composition side. They are completely separate, even though they come from the same stream.

Skipping The MLC because it is new. The MLC launched in 2021. Many artists have never heard of it. But it collects real money that you are currently missing. Ten minutes of registration adds 15-25% to your streaming income.

FAQ

Do I need both registrations even if I am small?

Yes. Both are free and take minutes. The same percentages apply whether you have 1,000 streams or 1 million. Start now so you never leave money uncollected.

What about YouTube royalties?

Your distributor collects ad revenue via Content ID. Performance royalties go through your PRO. Mechanical royalties go through The MLC. All three exist for YouTube plays.

Do cover songs generate mechanical royalties?

Yes. When another artist records your song, they owe you mechanicals for every reproduction. They obtain a license through the Harry Fox Agency or a service like Easy Song Licensing.

As a solo artist who writes and performs, do I get both types?

As the songwriter, you earn performance and mechanical royalties. As the performing artist, you earn streaming royalties through your distributor. Three payments from the same stream, assuming you are registered.

Read Next

• Music Royalties Explained: The 6 Types You Earn

• Music Income: How Artists Actually Get Paid

Know What You Are Owed:

Orphiq helps you track your releases and the registrations that ensure every stream pays what it should.