Performance vs Mechanical Royalties: Who Pays What

Performance royalties are paid when your composition is played publicly. Mechanical royalties are paid when your composition is reproduced. One Spotify stream triggers both at once, while radio airplay triggers only performance and a pressed CD triggers only mechanical. Different organizations collect each one, so your works have to be registered on both sides.

Both 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 a distribution-only payout.

Performance vs mechanical royalties is not trivia. It decides which two organizations your catalog has to reach, and what happens to the money if you skip one. Get the PRO side covered but not The MLC side, and you collect on one side of the composition while the other side sits unclaimed. If you self-administer, you handle both registrations yourself; if a publisher, administrator, or CMO represents you, confirm which side they already cover.

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. Leaving either side unregistered 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 your works are not registered: The money is held as unclaimed accrued royalties rather than paid out. The MLC keeps working to match it, accepts resubmitted data, and gives members claiming and matching tools, so held money can still reach you once your ownership is registered and matched. The MLC says it has made no market share distributions to date and intends to begin them in early 2027, starting with royalties that are still unclaimed from 2021 usage. Held is not the same as gone, but it only becomes yours if the works get registered.

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 the master-side royalties you are paid for the recording and separate from performance royalties through your PRO.

These per-stream figures are estimates. The real number moves with each service's revenue, its mix of free and paid listeners, and the country the play came from.

If your works are not registered with The MLC, that money sits in unclaimed accrued royalties instead of reaching you. It stays claimable while it is held, which is why registering sooner beats registering later.

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 on the master side. Each PRO publishes its own distribution schedule, and the lag between the play and the payment varies, so check the calendar on your PRO's own site.

Combined with mechanical royalties, your total composition income from one million streams is roughly $1,500-$3,000. This is separate from the master-side royalties paid for the 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 only your PRO registration is in place, you collect performance royalties but miss mechanicals. If only your MLC registration is in place, you collect mechanicals but miss performance royalties.

The MLC is free for self-administered songwriters to join. A PRO may charge a one-time application fee; check the current affiliation and distribution terms, including how the PRO handles its own costs before distributing, on the PRO's own site. Neither side takes long to cover, and there is no reason to cover only one.

How the Money Flows for a Spotify Stream

Three separate payments come from one stream, through three different entities, each on its own schedule:

1. Spotify pays streaming royalties (master side) to your distributor, who pays you. Spotify says payments often happen monthly, with exact timing set by each rightsholder agreement, and your distributor then pays out on its own schedule

2. Spotify pays mechanical royalties (composition side) to The MLC, who pays you (if your works are registered). The MLC pays members each month, approximately 75 days after the end of each monthly usage period

3. Spotify pays a blanket license fee to PROs, and your PRO pays you performance royalties (if your works are registered) on its own published distribution schedule

The Radio Exception

In the US, terrestrial AM/FM radio generates performance royalties for the composition but no mechanicals, because playing a song on the air does not reproduce it. Satellite and internet radio work the same way on the composition side: performance royalties through your PRO, no mechanicals. On the master side, those non-interactive digital services pay SoundExchange, which pays featured artists their share directly rather than routing it through your distributor.

Registration Checklist

For performance royalties:

1. Register with a PRO, ASCAP or BMI in the US. Check the current application fee on their own site

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. If you self-administer, become a member of The MLC at themlc.com (free). If a publisher, administrator, or CMO represents you, they work with The MLC on your behalf, so confirm with them rather than joining separately

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

Assuming distribution alone handles mechanicals. A distribution-only service collects your master recording royalties from the streaming platforms, not your composition royalties. Some distributors also sell a separate publishing-administration product that does collect composition royalties, so check which one you actually signed up for. If nothing covers the composition side, mechanical royalties still need your works registered with The MLC.

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 distribution pays is the master side. Mechanical and performance royalties are the composition side. They are separate rights collected through separate channels, even though they come from the same stream, and one company can handle both only if you have signed up for both services.

Skipping the MLC side because it is new. The MLC launched in 2021, and many artists have never heard of it. But it collects real money that you are currently missing. Ten minutes of registration, or one email to your publisher or administrator, turns on a payment you are not collecting at all today.

FAQ

Do I need both registrations even if I am small?

Yes. Registration is free or a small one-time fee, and both take minutes. The same percentages apply whether you have 1,000 streams or 1 million. Start now, or confirm that whoever represents you has, so you never leave money uncollected.

What about YouTube royalties?

On the master side, ad revenue can be collected through Content ID, but Content ID access is limited to copyright owners who meet YouTube's criteria, so it usually runs through a distributor or partner already in the program. A Content ID match can be set to monetize a video, block it, or only track it, so a match does not always mean income. On the composition side, performance royalties go through your PRO and mechanical royalties through The MLC for the uses those licenses cover.

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 every side is registered, whether by you or by whoever represents you.

Read Next

• Music Royalties Explained: The 6 Types You Earn

• Music Income: How Artists Actually Get Paid

• ASCAP vs BMI vs SESAC: How to Register with a PRO

• The MLC (Mechanical Licensing Collective) Explained

Know What You Are Owed:

Orphiq's career strategy tools keep your releases and their details, including ISRCs and UPCs, in one place, so you have what you need on hand when you register each work.