Performance royalties are recognized and distributed when a song is performed. This can include a live performance, an online streaming service (SoundCloud, Pandora, Spotify, Apple Music, etc.), or a broadcast. In order to establish that you will receive performance royalties, you should associate yourself with one of the three performing rights organizations, such as ASCAP, BMI, COMPASS or SESAC.
Mechanical royalties stem from the sale of a song from a legal digital download or from the purchase of an album. Mechanical royalty rates are extremely dynamic because every five years the rates are changed through a Copyright Royalty Board consisting of three judges. The first established rate was 2 cents per album in 1909; today the rate is 9.1 cents per album and is generally split between co-writers and publishers.
Synch fees are received when a song is used in synchronization with a movie, a YouTube video, or a television show. Synch fees are unique because they are negotiated in the marketplace and are split: 50% for the songwriters and record label and 50% for the artist.
Advances are a form of income that a songwriter receives from his or her publisher before royalty money has been collected and they are distributed on a weekly or monthly basis. For example, if a songwriter is paid $700 dollars a week that will come out to $33,600 a year. The $33,600 will be deducted from royalties that become due from any of the three royalty streams (performance royalties, mechanical royalties, and synch fees).
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