Performance royalties are generated through copyrighted songs performed, played, or streamed publicly. Performance royalties are paid out to performing artists, songwriters, and sometimes publishing companies.
Generally, performance royalties are generated through the following mediums: radio, music streaming apps, and live venues.
Radio stations typically pay performance rights organizations for a comprehensive license that allows them to play a large number of songs. The songs played are logged and reported to performance rights organizations, which are used to distribute royalties to performers, songwriters, and their publishers.
Music streaming companies operate a business model that generates performance royalties whenever a song is played. The listener does not own the music in their library, which counts as a public performance whenever streamed. Streaming companies typically pay out to performance rights organizations or distributors.
Royalties are also generated when music is played in public places like restaurants or elevators. These venues are similar to radio stations in that they purchase comprehensive licenses and report to PROs for royalties to be divided amongst the relevant parties. However, royalties are only for streaming or plays from a playlist, not live performances, which are a flat performance fee.
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