What Every Musician Must Know about Performance and Mechanical Royalties - Purple Fox Legal

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What Every Musician Must Know about Performance and Mechanical Royalties

By Purple Fox Legal

March 23, 2022

For musicians, not much is more important than protecting the music that they create. All of their talent, effort, and hard work go into creating these melodies, and it’s only right for them to be compensated each time their work is used. But, how can musicians ensure this happens? The answer is with proper protection. 

This article looks at music through a legal lens and explores the protections available to musicians and songwriters to ensure compensation for musical works.

The Differences Between Performance and Mechanical Royalties

In order to best understand PROs and MROs, we must first identify the two different types of musicians that exist: performing artists and songwriters. Each of these roles is unique and offers its own distinct copyright potential. That’s because the protections required are different, depending on the job the musician is completing. This is where royalties come in. 

Performance Royalties are owed to a songwriter each and every time a song is performed publicly. Performance royalties are due to both a songwriter and the performing artist whenever a song is aired on the radio, featured in a movie, played in a restaurant, or digitally downloaded. A Performance Rights Organization (PRO) is the company that will ensure this happens. 

Mechanical Royalties, on the other hand, are a type of compensation paid to songwriters any time their music is sold, streamed, or manufactured. Mechanical royalties are less understood than performance royalties, but they are just as important (especially in today’s digital world). A Mechanical Rights Organization (MRO) can help artists keep up. 

Understanding PROs and MROs

With the general understanding of the basic compensation that musicians require, PROs and MROs are the companies that make sure they receive it. But, navigating the world of royalties can still be confusing. How can an artist know the right time to use an organization and make sure they’re getting the very best? That mostly comes down to doing research. 

Performance Rights Organizations (PRO)

Though performance royalties are owed with each public performance, the money isn’t transferred to songwriters automatically. Instead, a PRO is responsible for the heavy lifting that’s required to ensure their members are paid. In fact, PROs fulfill a wide range of responsibilities, including licensing public performances, collecting royalties from those performances, and distributing those royalties to the appropriate parties. 

The most popular PROs in the US include:

  • SoundExchange
  • BMI

Deciding whether a PRO is right for your needs, and the organization you’re most comfortable with is a very personal decision. But, it’s important to know that most creators looking to monetize their music end up working with a PRO to help them receive compensation. 

Mechanical Rights Organizations (MRO)

While they sound quite similar, mechanical rights are a unique music royalty paid at each sale. This means that songwriters and performing artists receive payment when a record is purchased, one of their songs is streamed, or a new CD is created. This ensures that they are compensated, even when their music isn’t performed publicly, but instead enjoyed in a more private setting. 

Most PROs don’t chase down mechanical royalties, which can make them notoriously harder to secure. However, the passing of the Music Modernization Act also created the Mechanical Licensing Collective (MLC), which is responsible for collecting and distributing mechanical royalties. In 2015, SESAC also began offering mechanical royalties services. 

Final Tips for Musicians

The music industry can be a confusing one, especially when it comes to protecting your work and receiving compensation for it. And, this can be difficult for musicians simply trying to create art and have fun doing it. For this reason, songwriters and performing artists should consider reaching out to an experienced attorney to navigate the options available to them. Doing this can guarantee proper protection and adequate compensation for years to come.