How Do Music Royalties Work?

If you're an independent artist or on the verge of signing a record deal, understanding how music royalties work is essential. It’s easy to focus on getting streams or going viral, but if you don’t understand how you get paid, you’re leaving money on the table.

At the heart of it, royalties are how you earn money from your music being played, performed or sold. But it’s not quite as simple as “get played, get paid.” Music income is divided into two core categories, both of which are equally important: publishing and recording.

In this guide, we will break those down so you can take control of your music income.

Publishing Royalties: Money from the Song Itself

Publishing royalties are tied to the songwriting aspect of your track, which consists of the following subcategories:

• Song Lyrics

• Song Melody

• Chord Structure

• Overall Composition (Production)

You earn publishing income when your song is used in a variety of ways: whether it’s streamed on Spotify, played on the radio, performed live, synced to a Netflix series or sold as sheet music.

Even if someone else records your song, if you’re credited as a writer or co-writer, you’re entitled to publishing royalties. These royalties are typically paid out through organisations like PRS for Music in the UK (which handles public performance and broadcast usage) and MCPS, which collects mechanical royalties from physical and digital reproductions.

If your music is used globally, you'll need to ensure it’s registered in multiple territories or work with a publishing administrator, who will collect on your behalf.

Producers, especially in genres such as hip-hop, pop, and dance music, often receive a share of publishing as well. This is because the beat or instrumental can be a core part of the composition. These splits are not predetermined and are to be agreed upon between the writers and producers before the track is released.

Recording Royalties: Money from the Master Recording

While publishing royalties come from the songwriting, recording royalties come from the sound recording itself, which is known in the business as the ‘master’. This is the actual audio file that gets distributed to Spotify, Apple Music or the radio.

If you upload your music via a distributor like DistroKid, you usually retain ownership of the master recording, therefore earning the recording royalties. However, if you sign to a label, they typically take ownership of the master, and in return, offer you a royalty percentage from the income it generates.

Recording royalties come from various sources: when fans stream your song, buy a vinyl record or download your track. It also includes broadcast income from radio plays and performances in public venues such as gyms, restaurants and clubs. In the UK, this type of income is collected by Phonographic Performance Limited (PPL).

It's worth noting that both featured artists (you) and non-featured performers (such as session musicians or backing vocalists) may be entitled to a share of these royalties. But session players are usually paid via neighbouring rights societies, only if their performance is officially registered.

What Happens When You Sign a Record Deal?

When artists sign to a label, one of the biggest shifts is the transfer of master ownership. Most traditional record deals involve handing over rights to the master in exchange for promotion, distribution, and financial support. This means the label now earns the bulk of recording royalties, and you receive a smaller, pre-agreed percentage, often ranging between 15% to 25%.

However, your publishing royalties remain separate. Unless you’ve also signed a publishing deal, you’ll still collect the songwriter’s share. That’s why understanding this split is vital; in many cases, it's the publishing income that sustains artists long-term, especially if you’re building a catalogue of self-written and self-produced songs.

There are also “360 deals” where labels take a cut from both recording and publishing, as well as merchandise and touring… Anything that your songs or brand as an artist is affiliated with. If you’re considering a deal like this, make sure to get legal advice to protect your earnings across all fronts.

So, How Can You Stay on Top of Your Royalties?

Start by registering your songs properly. That means joining PRS for Music and PPL in the UK. If you're releasing music globally, consider using a publishing admin service to capture royalties from around the world.

Make sure that you have agreed on the splits for the publishing with any collaborators in advance, whether it’s co-writers, producers or session musicians. Don’t leave it until your track starts gaining traction. Most disputes in the music industry arise from royalty disagreements, and they’re easy to avoid with early communication.

Above all, remember this: your music is your business, and royalties are how your business pays you.

Know Your Worth, Collect What's Yours

Music royalties can seem complicated at first, but they’re one of the most important things for any artist to understand. Whether you’re self-releasing or signing to a label, knowing the difference between publishing and recording income helps you protect your rights, make smarter decisions and earn what you truly deserve.

Here at Music Mogul Marketing, we help artists like you not only grow on platforms like Spotify but also understand the music business behind the scenes. If you want to maximise the reach of your music, get in touch with our team today.