How a Stream Becomes Money: Where UK Music Royalties Come From
By Written by Peter McVeigh
One play can create several different payments to different people. This guide follows a stream, a radio play and a download through the UK system and shows where PRS, MCPS, PPL and your distributor fit in.
A lot of independent artists know they should be earning royalties, but not where the money comes from or who collects it. That is not surprising. One play of a song can create more than one payment, going to different people through different organisations.
This guide follows a stream, a radio play and a download through the UK system. It is a simplified picture to help you see where each organisation fits, so check each body's own pages for exact rules and rates.
Two things in every song
Every recorded song contains two separate rights. The first is the song itself, meaning the music and lyrics, which belongs to the songwriters and publishers. The second is the recording, meaning the particular performance captured on the track. That belongs to whoever owns the master, which might be you, a label, or a mix of people, and the performers on it also have rights.
If you wrote and recorded your own track, you hold both, but they are collected in different ways. That is why one stream pays out in more than one place.
The song side: PRS and MCPS
PRS for Music collects on behalf of songwriters and publishers when songs are performed or communicated to the public, which includes broadcasts, live shows and a share of streaming. MCPS collects when songs are copied or reproduced, which includes downloads and a share of streaming.
For UK online services, PRS has published how it divides blanket income between the two. At the time of writing its policy documents split streaming income evenly between PRS and MCPS, while downloads are weighted more towards MCPS. YouTube is calculated differently. These details are updated by PRS from time to time, so treat them as an illustration and check the current policy.
Within each society, the money goes to the writers and publishers of the matched songs, in line with the splits registered. That is why registering your songs and agreeing splits matters so much. Our guides on registering with PRS for Music and MCPS explain how.
The recording side: your distributor and PPL
For on-demand streaming of a recording, such as a play on Spotify or Apple Music, the money for the recording usually goes from the streaming service to whoever distributes or owns the master. For an independent artist, that is typically your distributor, who pays you after taking their fee or share. It does not go through PPL.
PPL collects different money. It licenses recorded music used in places such as radio, TV and public spaces like shops, bars and gyms, and pays the recording owner and the performers on the track. To be paid by PPL you need to be registered, with your recordings and performers on its system. Our guide on registering with PPL walks through it.
The codes on your releases, the ISRC for each recording and the UPC for each release, are how plays are matched to the right recording. Our guide on ISRC and UPC codes explains them.
Following three plays
To make this concrete, here is roughly what happens in three cases when you have written and released your own song. When someone streams it, the service pays the song side through PRS and MCPS, to you as writer and as publisher if you have registered. It also pays the recording side, through your distributor, to you as owner of the master. When it is played on BBC radio, the broadcaster pays PRS for the song and PPL for the recording, and PPL pays the recording owner and the performers. A download is weighted towards MCPS on the song side, and the sale income for the recording comes through your distributor.
If you are signed to a label or a publisher, parts of this money go to them first and reach you according to your contract. Our guides on publishing deals and recording deals, and on record deal advances, explain how that works.
Why money goes missing
Most unclaimed royalties are caused by admin rather than by anything dramatic. Songs are not registered with PRS, or are registered with the wrong splits. Recordings are not registered with PPL, or are missing performer details. The same song has different titles or spellings across platforms, ISRCs are missing or duplicated, co-writers never agreed a split, or a change of distributor happened with no tidy-up.
The fix is boring and effective. Keep one list of your songs and recordings with the writers, splits, tunecodes and ISRCs, and check it against what your societies and distributor hold.
A simple checklist
Join PRS and MCPS as a writer and register every song, with splits agreed in writing. Register with PPL as a recording rightsholder, and as a performer if you play on recordings. Make sure every track has an ISRC and every release has a UPC, and keep a master list of songs, recordings, writers, splits and codes. Then check that your distributor statements and society statements match what you expect.
What to do next
Take one released track and follow it through this list. Is the song registered with PRS and MCPS? Is the recording registered with PPL? Does it have an ISRC and a UPC? Where are the splits written down? Whatever is missing is the next job.
For the registration steps in detail, start with our guide to rights registration with PPL, PRS and MCPS. And if you play live, there is another income stream many artists miss. Our guide on reporting live setlists to PRS covers it.
Disclaimer
This article is a simplified general explanation for independent musicians, not legal or financial advice. Royalty rules, rates and splits change, and your own contracts may differ, so check prsformusic.com, ppluk.com and your own agreements for current details. Please also check out the conversations section on the site for guides on how to register for each royalty collection.