How Do Spotify Streams Turn Into Royalties?

It depends on the type of royalty you’re talking about.

Two different types of publishing royalties are generated when your song is streamed on Spotify.

Performance royalties apply to a public performance or broadcast of a musical work. These royalties are collected by Performing Rights Organizations (PROs).

Your songs must be properly registered with a PRO to be paid this royalty. If you haven’t registered with one yet, Songtrust can streamline the process and make the most of your relationship with PROs globally.

Performance royalties are paid based on each songwriter’s share of the song. For example, if a song by the Beatles was written by “Lennon/McCartney”, the split would be 50/50.

Performance royalties are also split and distributed 50/50 between the songwriter(s) and their publisher(s). Depending on the type of deal you have (administration, co-publishing, income participation), you may only see a portion of these royalties.

Songwriters who manage their publishing rights through Songtrust will see 100% of the publisher’s share of performance royalties distributed back to the writer(s), minus our fee.

Mechanical royalties are generated when your songs are transmitted, broadcasted, or reproduced. This occurs when outside parties license your songs for physical albums, digital downloads, and interactive streams. The Mechanical Licensing Collective (The MLC) is a nonprofit organization that administers blanket mechanical licenses to streaming services and pays royalties to songwriters, composers, lyricists, and publishers.

Songtrust is also able to collect on behalf of songwriters without a publishing company by acting as your publisher. This saves you money and time, and helps avoid potential hassles and hangups.

For more on how mechanical royalties differ from performance royalties, check out our mini-crash course, our blog post breakdown or complete list of mechanical royalty sources.

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