Performance rights royalties are payments made to songwriters, composers, and music publishers for the public performance or broadcast of their music. This includes plays on radio, TV, in live performances, and increasingly, on streaming platforms. When a song is played in public, whether on the radio or in a cafe, performance rights organizations (PROs) collect fees from the users of the music (like radio stations or streaming platforms). These fees are then distributed to the rights holders of the music based on various factors such as airplay frequency and audience size.
In the context of streaming, many streaming services like Spotify, Apple Music, and Pandora also pay out performance rights royalties (a type of royalty related to the composition). They obtain licenses from PROs or directly from music publishers to stream their catalog of songs. These licenses include agreements on how much the streaming service will pay for the public performance of each song. The streaming service then reports usage data to the PROs, who distribute the royalties to the appropriate rights holders.
Overall, performance rights royalties ensure that songwriters and publishers are compensated for the use of their music in public performances, including on streaming platforms.