Mechanical vs Performance Royalties (Most Producers Are Only Collecting One)
If you make beats, you're probably missing two separate royalty streams right now. Most producers only know about one - or neither. This page explains both, why they matter, and how to make sure you're collecting every dollar you're owed.
This is part of The Complete Guide to Music Publishing for Beat Producers
The Short Version
Every time your beat gets streamed on Spotify or Apple Music, two separate royalty payments are generated:
1. A mechanical royalty
Paid because someone is reproducing your composition
2. A performance royalty
Paid because someone is publicly performing your composition
These are collected by completely different organisations. If you've only set up distribution, you're probably only collecting one of them - or neither.
What Are Mechanical Royalties?
Mechanical royalties are paid to the songwriter and publisher whenever their composition is reproduced or distributed - physically or digitally.
The word "mechanical" comes from the early 1900s, when music was first reproduced on mechanical devices like player pianos and phonograph cylinders. The concept stuck, even though today it mostly applies to streaming.
When mechanical royalties are generated:
- Every stream on Spotify, Apple Music, Tidal, Amazon Music, or any on-demand platform
- Every digital download (iTunes, Bandcamp)
- Every CD or vinyl pressing
- Every time your beat is used in a YouTube video through Content ID
Who collects them:
In the US, streaming mechanical royalties are collected by the Mechanical Licensing Collective (MLC) and distributed to publishers. In Australia, APRA AMCOS handles both mechanical and performance collection. In the UK, the MCPS (part of PRS for Music) handles mechanicals.
The key point for beat producers:
If you make a beat and an artist releases a song using it, you are a co-writer of that composition. You are owed mechanical royalties every time that song is streamed - on top of any upfront lease or licensing fee you charged. Most beat producers never collect these because they haven't registered their publishing.
What Are Performance Royalties?
Performance royalties are paid to songwriters and publishers when music is publicly performed or broadcast.
"Public performance" covers more than you'd expect:
Streaming on Spotify, Apple Music, YouTube Music
Radio airplay (AM, FM, internet radio)
TV broadcasts
Live concerts and festivals
Music in bars, restaurants, and shops
Music in films, ads, or TV shows
Who collects them:
Performance royalties are collected by Performance Rights Organisations (PROs). In the US, the main PROs are ASCAP, BMI, and SESAC. In Australia, it's APRA AMCOS. In the UK, it's PRS for Music. In Canada, it's SOCAN.
Important: Two separate shares
PROs pay out two separate shares from every royalty dollar collected:
If you haven't registered as your own publisher, you're only collecting half of what you're owed.
How They're Different: Side by Side
Mechanical Royalties | Performance Royalties | |
|---|---|---|
| Triggered by | Reproduction of your composition (streams, downloads, physical copies) | Public performance or broadcast of your composition |
| Collected by | MLC (US), APRA AMCOS (AU), MCPS (UK) | PROs: ASCAP/BMI/SESAC (US), APRA AMCOS (AU), PRS (UK) |
| Paid to | Publisher (who pays the songwriter) | Songwriter (writer's share) + Publisher (publisher's share) |
| Rate set by | Government (statutory rate in the US) | Negotiated by PROs with each platform |
| On Spotify | Yes - generated on every on-demand stream | Yes - generated on every stream |
Note: On streaming platforms like Spotify, a single stream generates both a mechanical royalty and a performance royalty. They're paid separately, through separate organisations, to the same person - you - if you've set everything up correctly.
What This Means for Beat Producers Specifically
When you make a type beat and post it on YouTube, you are creating a composition copyright the moment you hit save. That copyright has value - in the form of mechanical and performance royalties - every single time someone streams it.
Here's where most producers lose money:
Beat sits on YouTube, never distributed
You earn $0 in mechanical royalties. $0 in performance royalties. YouTube AdSense revenue only (if monetised). All the streaming and radio use of that beat generates royalties that go uncollected and eventually expire.
Collecting
Missing
Beat is distributed but publishing isn't registered
You collect master royalties through your distributor. But mechanical royalties go uncollected because nobody has claimed the publishing. Performance royalties go uncollected because you're not registered with a PRO or publishing administrator.
Collecting
Missing
Beat is distributed AND publishing is registered
You collect master royalties through your distributor. You collect mechanical royalties through the MLC or equivalent. You collect performance royalties through your PRO or publishing administrator. All three income streams from a single beat.
Collecting
Most producers are in Scenario 1 or 2.
Dreamhause is built to get you to Scenario 3.
How to Start Collecting Both
To collect mechanical royalties, you need a publishing administrator or publisher who will register your compositions with the MLC (US) and equivalent bodies internationally.
To collect performance royalties, you need to register with a PRO (ASCAP, BMI, or SESAC in the US - APRA AMCOS in Australia) and register each of your compositions.
Dreamhause distributes your beats to streaming platforms, and its optional publishing add-on handles registering your publishing - so both royalty streams can be collected from one dashboard.