Music royalties explained: masters, songs and neighbouring rights

A track can earn money along three separate routes. The recording (the master) earns from streams and downloads: the stores pay your distributor or label, which accounts to you from their reports. The song itself, meaning the music and lyrics, earns songwriting royalties of two kinds, performance and mechanical, collected by collecting societies and, if you have one, a music publisher. And when the recording is broadcast or played in public, the performers and the producer of the recording are owed neighbouring rights income, which yet another organisation collects.

Each route runs through different organisations, and you have to register with each of them separately. Your distributor does not collect songwriting royalties, a songwriters' society does not pay you for your recording, and neighbouring rights societies generally do not collect for on-demand streams. This guide sets out who pays, who collects and who receives each type of royalty, and the misunderstandings that cost artists money. Examples come from the Netherlands, where Crystal is based, the UK and the US.

Two sets of rights in every track

Each track consists of two things with their own rightsholders:

The distinction matters because the two sides often belong to different people. Record a cover and the recording is yours, but the song still belongs to its original writers: you earn from the recording, they earn from the song. Write a song that another artist records and you earn songwriting royalties without owning any part of that recording. Write, perform and release your own music and income from both sides is yours, but you only receive it once you are registered everywhere it is collected.

A note on terms: in the Netherlands and much of continental Europe, the rights of performers and producers in a recording are legally neighbouring (or related) rights, so master rights technically fall under them too. In everyday use, though, "neighbouring rights" means the money collected when a recording is broadcast or played in public, and that is how this guide uses the term.

Master royalties: streams and downloads via your distributor

Streaming services and download stores pay for the use of a recording to whoever delivered it: the label or the distributor. That party receives reports for each period showing use per track and per country, and accounts to the owner of the master. BumaStemra, the Dutch songwriters' society, puts it plainly in its From Play to Pay guide: an aggregator doesn't just make your music available on Spotify, it also collects the payment for the recording rights, known in the Netherlands as master rights.

This is how it works at Crystal Distribution:

• Store reports arrive through the distribution partner. Each report is read in full and its total checked before any line is allocated to your releases.
• You get royalty statements per period, per track and per store, and you can export them as CSV.
• A published statement doesn't change; a correction is issued as a new statement.
• Stores usually report one to three months after the use. That delay is set by the store, not by Crystal.
• Payouts go to a verified bank account after two-factor authentication and approval by two people at Crystal.

Details are in the help article on royalty statements.

The money belongs to the master owner, which is you if you release independently. If a producer or featured artist gets a share of the recording income, you record that split per track; once they accept, the collaborator gets their own access to their streams, share and payouts. See royalty splits with collaborators.

YouTube Content ID and the TikTok and Instagram/Facebook music libraries also sit on the master side: they concern your recording used in other people's videos. At Crystal they are separate choices in the distribution agreement and require exclusive rights in the recording. See YouTube Content ID, TikTok and Instagram.

Songwriting royalties: performance and mechanical

Copyright in the song produces two kinds of royalties:

• Performance royalties are paid when a song is played or made available to the public: on radio and TV, at gigs, in bars and shops, and through streaming.
• Mechanical royalties are paid when a song is reproduced, such as on CD or vinyl and as a download. Streaming involves this right too.

How collection is organised differs by country:

• Netherlands: one organisation, BumaStemra (also written Buma/Stemra), in which Buma collects for public performance and Stemra for mechanical rights. Online services get a combined licence, with most streaming income allocated to performing rights and most download income to mechanical rights.
• United Kingdom: PRS for Music collects performance royalties through PRS and mechanical royalties through MCPS, for songwriters, composers and publishers.
• United States: performing and mechanical rights are handled separately. Performance royalties go through performing rights organisations such as ASCAP and BMI, while the blanket mechanical licence for eligible streaming and download services is administered by The MLC (Mechanical Licensing Collective).

The money goes to songwriters, composers and publishers according to the shares registered for each work. Copyright arises automatically; collecting on it does not. A society can only claim for works in its database, so you need to be a member and to have registered your songs.

Use abroad runs through agreements between societies: the local society collects and passes the money on to yours, although some societies collect directly from the big international music services; BumaStemra, for example, does so in Europe. For work registration, IPI numbers and publishers, see what a music publisher does.

Neighbouring rights: broadcast and public performance

When a released recording is broadcast or played in public, on radio and TV, in bars and shops or at events, many countries give the performers and the producer of that recording a right to remuneration. A neighbouring rights society collects it, not your distributor. Examples:

• Netherlands: Sena. Sena collects from broadcasters, bars, shops and event organisers, and pays half of each track's remuneration to the performers and half to the producer. Self-releasing artists are both, so they register twice, as artist and as producer, and link the two accounts. Registration is free (how to register with Sena).
• United Kingdom: PPL. PPL licenses recorded music played in public or broadcast on radio and TV, and pays the performers and recording rightsholders it represents; membership is free. It does not manage the on-demand streaming of specific tracks, such as on Spotify (PPL's guide to royalties).
• United States: SoundExchange. SoundExchange collects for non-interactive digital services such as satellite radio, webcasters and digital cable music providers, and pays featured artists and sound recording copyright owners. There is currently no performance right for over-the-air broadcasts, so AM/FM radio does not pay artists or labels for the recording (SoundExchange FAQ).

If you perform on someone else's recording, as a session musician for example, you can be entitled to this remuneration too. Whether you also share in that recording's streaming income depends on your agreement with the label or the master owner.

Overview: who pays, who collects, who receives

A publisher receives its share through the same societies or, in some cases, directly: The MLC, for example, pays publishers and administrators. Sync (music set to picture in an advert, film or game) needs separate permission for both the recording and the song, usually negotiated per use with the master owner and the publisher or writer.

Why a streaming service pays both sides

A stream uses two things at once: the recording and the song inside it. As BumaStemra puts it, anyone wishing to use music needs permission for both. So a service like Spotify holds licences with labels and distributors for the recordings, and with collecting societies and publishers for the songs.

How the money from one stream travels:

1. A listener streams your track.
2. The service reports that use to the distributor that delivered the recording, and separately to the organisations representing the songs. Spotify, for example, sends BumaStemra monthly reports per country and subscription type.
3. The distributor accounts for the recording share to the master owner, who shares it with collaborators according to the splits.
4. The society matches the streams to registered works and pays songwriters, composers and publishers according to their shares.

So the songwriting share doesn't come out of your master income: it's a separate payment to other rightsholders.

Step 4 depends on metadata. BumaStemra advises making sure the track on Spotify matches the work you register, especially the title, composer and performer, and paying attention to spelling and punctuation. Keep titles and names identical everywhere; the release metadata checklist helps.

Who registers what

Two things often go wrong here. First, the master split and the song split are separate agreements: a producer can get a share of the recording, a share of the song as a co-writer, or both. Second, timing matters. BumaStemra only claims streaming royalties from the date a work is registered, and advises registering at the same time as the release and no later than two weeks after it. Register later and all that's left is a back claim, which often means waiting up to two years; miss that too and the payment is lost.

Common misunderstandings

• "My distributor collects all my royalties." A distributor collects the master side. Songwriting royalties go through collecting societies or a publisher, and neighbouring rights through a neighbouring rights society. BumaStemra itself warns against confusing aggregator income with copyright income.
• "Neighbouring rights societies pay for my Spotify streams." They collect when recordings are broadcast or played in public. Your on-demand streams pay out through your distributor or label.
• "A cover earns me songwriting royalties." The song stays with its original writers; you earn from your recording. A cover needs a mechanical licence, and Crystal asks for each track whether it is an original, a cover or public domain. See releasing covers, samples and remixes.
• "The numbers in my dashboard are my statement." Spotify for Artists updates its stats daily, and for a new release even shows a live stream count during the first week, while statements come later and cover closed periods only. Compare like with like, and remember that reported revenue is not yet money received.

What Crystal collects and what you arrange yourself

• Master income from the stores the distribution partner delivers to, including Spotify, Apple Music, Amazon Music, Deezer and TIDAL, runs through Crystal Distribution, as do YouTube Content ID and the TikTok and Instagram/Facebook music libraries if you choose them.
• Songwriting royalties are collected by your collecting society, with or without a publisher. Crystal Publishing, Crystal's publishing branch, registers works with collecting societies and collects publishing income. You remain the owner of your works, and you see the terms and costs before you sign.
• Neighbouring rights you arrange with a neighbouring rights society: in the Netherlands, Sena, as a performer and, if you self-release, as a producer too.

See how distribution with Crystal works or check pricing.