Performance Royalties Explained: The Money You Might Be Missing
In every developed country in the world, artists get paid when their music plays on terrestrial radio. Except the United States. AM/FM stations broadcast recordings without paying sound recording owners a single cent. If you're a musician, this gap might be costing you money you don't even know about.
How the System Works (and Doesn't)
Linda Bloss-Baum helped write the Digital Millennium Copyright Act and ran Washington offices for Universal and Warner Music. Here's her explanation of the gap:
When radio started, artists performed live in studios. Stations paid them a fee. Then stations switched to recorded music, and the payment model never caught up. Songwriters have always been paid through PROs like ASCAP and BMI. But performers and labels who own the sound recording? Nothing from terrestrial radio.
"Terrestrial radio was still allowed to play any music they wanted without permission. You cannot hold your music back from terrestrial radio in this country."
Digital performance royalties exist -- SoundExchange collects those. But the terrestrial gap remains because the broadcasting industry is one of the most powerful lobbying forces in Washington. Radio towers exist in every Congressional district. Members of Congress run campaign ads on local stations.
Even China now has better sound recording performance laws than the US.
What You Should Actually Do
Register everywhere. If you're not registered with SoundExchange (US digital performance royalties), your PRO (ASCAP/BMI/SESAC for songwriting), and your local collection society, you're leaving money on the table. This is the most common revenue leak for independent artists.
Understand which royalties exist. Mechanical royalties, performance royalties, sync fees, digital performance royalties -- they're all different streams with different collection mechanisms. Most artists only track one or two.
Know what's broken before you build on it. If you're a founder building anything that touches music monetization, understand where the system fails. The brokenness is both a warning and an opportunity.
Track your international earnings. If your music plays on radio outside the US, you should be earning performance royalties through reciprocal agreements. Many artists aren't collecting because they never registered with the right societies.
The system structurally underpays artists. The more you understand it, the less money you leave behind.
Key Takeaways
- US terrestrial radio doesn't pay sound recording performance royalties -- the only major developed country with this gap
- Register with every collection society relevant to your music. Uncollected royalties are the most common revenue leak.
- Understanding the royalty system isn't optional -- it's how you get paid
*Source: Podcast, Episode 26 -- Linda Bloss-Baum (LBB Creative Strategies / former SoundExchange SVP)*