The Two Types of Streaming & How You Can Collect Royalties For Both

Many today would agree that streaming dominates the music market. As a songwriter, it’s essential that you understand how streaming works and what kind of publishing royalties are generated—in other words, how much you can make on your music when it’s streamed. Streaming has become the way most people listen to music, but it’s a broad term. ‘Music Streaming’ can refer to anything from listening to internet radio or simply watching a music video on YouTube—it basically means listening to a song without downloading it.

Streaming is typically referred to by one of two types: Non-interactive and Interactive. These are defined by whether the listener is able to choose what songs will play next or not (ability to 'interact' with the streaming service). Based on what kind of stream your song gets, the way to collect and what kind of royalties are generated will differ.

The royalties that are produced from a stream are broken up into two different types: Sound (or master) recording royalties and publishing (or composition) royalties. Sound recording royalties are paid out through record labels, distribution companies, and SoundExchange (a global collection society for non-interactive streams). Publishing royalties can be harder to get a hold of. They are dependent on what country the stream occurred in and whether you’ve registered at specific collection societies. To review how composition royalties are earned and collected, check out this deep dive. In this article, we’ll dive into the two different streaming types and show you how to begin collecting your publishing royalties on all of your music streams.

Streaming Royalty Types

Interactive Streaming

Definition: Interactive streaming services allow listeners to CHOOSE the songs that are played

Also Known As: On-demand streaming

Examples: Spotify, Tidal, Apple Music, YouTube

Royalties Generated: Performance royalties and Mechanical royalties

How to collect: To collect performance royalties, you will need to join the PRO/CMO in your home territory. To collect mechanical royalties, you will need to become a publisher affiliate at different mechanical rights organizations (MROs). If you live in the US, these are the Harry Fox Agency (HFA) and Music Reports (MRI). If you’re based outside of the US, you’ll have to check with your domestic collective management organization (CMO) to either determine if that society is already collecting your mechanical royalties or if they have a separate society to do so. To collect mechanicals outside of your home country, you’ll need to register as a publisher affiliate with every MRO or CMO your song is streaming in. This can be a long and tedious process, to streamline the affiliation process with each, you can sign up with Songtrust.

Non-Interactive Streaming 

Definition: Listeners play music, without the ability to choose the songs that play next

Also Known As: Internet Radio

Examples: Pandora, Slacker, TuneIn

Royalties Generated: Performance royalties. These are the same type of royalties that are produced when your song is played on terrestrial radio (AM/FM). These kinds of services only generate performance royalties.

How to Collect: Join a collection society referred to as a PRO (performing rights organization such as ASCAP, BMI, and SESAC in the US), or a CMO (collective management organization such as GEMA, SACEM, etc outside of theUS). Collection societies are responsible for tracking and collecting performance royalties generated from non-interactive streams. When your song generates performance royalties outside of the US, these are collected from the CMO/PRO of the country the song was streamed in. Oftentimes, these can be collected through your PROs reciprocal agreements with their foreign counterparts. However, these agreements aren’t always going to get you all of your international performance royalties. By signing up with a service like Songtrust, you can become directly connected with these entities to be sure that you're receiving all that you've earned on your music.

If you want to understand how much your song could collect through streaming, check out our Estimator Tool.

 

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