Music Royalty Terminology: A Complete Glossary
Music royalty contracts are full of terms that are rarely explained clearly — PPD, SRLP, net receipts, recoupment, through-to-artist rates. This glossary covers the most important terms in music royalty accounting and publishing, with plain-language definitions and notes on where disputes commonly arise.
Terms are listed alphabetically. Where a term links to a full guide, we have noted it inline.
These are general definitions
Exact meanings can vary by contract and territory. Always refer to the specific wording in your recording or publishing agreement — and take legal advice for anything material.Full glossary
Advance
A sum of money paid by a label or publisher to an artist upfront, against future royalties. The advance is recoupable — meaning the label recoups it by deducting from the artist's royalty share before any payments are made. If the advance is never fully recouped through royalties, the artist does not owe the difference.
Related: Recoupment, Unrecouped Balance
Audit Trail
A chronological log of all actions taken on a royalty account — statement approvals, split changes, payment records, and amendments. A complete audit trail is essential for resolving artist disputes and satisfying legal or accounting inquiries.
Cross-Collateralisation
A contractual clause that allows a label to offset an unrecouped advance on one album against royalties earned on another. Highly controversial and commonly disputed by artists. Not all contracts include this provision.
Related: Recoupment, Advance
Distribution Fee
The percentage or flat fee retained by a distributor before passing royalty income to the label or artist. Typical digital distribution fees range from 0–15% depending on the distributor and plan.
DSP (Digital Service Provider)
A platform that licenses and streams or sells music to consumers — Spotify, Apple Music, Amazon Music, Tidal, YouTube Music, etc. DSPs pay royalties to rights holders (typically the distributor or label) and issue income reports in CSV format.
Gross Revenue
The total income received from all sources before any deductions — distribution fees, label share, packaging deductions, or recoupment. On a royalty statement, gross revenue is the starting figure before splits and deductions are applied.
Related: Net Revenue, Through-to-Artist Rate
Label Fee
The percentage of gross income retained by the label before calculating the artist's share. Often described in contracts as the "label's share" — for example, a 50/50 deal means the artist receives 50% of net receipts after distribution fees.
Master Recording Royalty
A royalty paid to the owner of the master recording — typically the label, or the artist if they own their masters. This is separate from publishing royalties (which cover the composition). When a track is streamed, a master recording royalty flows from the DSP to the master rights holder.
Related: Publishing Royalty, Neighbouring Rights
Mechanical Royalty
A royalty paid to songwriters and publishers for the reproduction of a composition — on streams, downloads, or physical formats. In most territories, mechanical royalties are collected by an MRO (Mechanical Rights Organisation) such as MCPS (UK) or the MLC (US) and passed to publishers.
Related: Publishing Royalty, PRO
Neighbouring Rights
Royalties paid to performers and record labels for the public broadcast or public performance of a recording (as opposed to a composition). Common in the UK, EU, and many other territories. Not recognised in the United States for domestic broadcasts.
Net Receipts
The income remaining after the distributor or collection society has taken its share. When a contract states "X% of net receipts", the artist's percentage is calculated on the post-distribution income, not the gross DSP payout.
Related: Gross Revenue, Through-to-Artist Rate
Packaging Deduction
A legacy deduction applied in physical music contracts — typically 15–25% of the dealer price — ostensibly to cover packaging costs. Many contracts carry this clause even for digital sales, where it has no physical justification. Artists should review whether packaging deductions apply to streaming income in their contract.
Performance Royalty
A royalty paid to songwriters and publishers when a composition is performed publicly — on radio, TV, live, or in a public space. Collected by PROs (Performing Rights Organisations) such as PRS for Music (UK), ASCAP, BMI, or SESAC (US).
Related: PRO, Mechanical Royalty
PPD (Published Price to Dealer)
The wholesale price at which a label sells physical product to dealers or distributors. Used as the base figure for calculating royalty rates in many physical distribution contracts — e.g. "18% of PPD". Less common in digital-only deals.
Related: SRLP
PRO (Performing Rights Organisation)
An organisation that collects performance royalties on behalf of songwriters and publishers. Examples: PRS for Music (UK), ASCAP, BMI, SESAC (US), SOCAN (Canada), APRA AMCOS (Australia). Songwriters register their works with a PRO to receive performance royalty income.
Related: Performance Royalty, Mechanical Royalty
Recoupment
The process by which a label recovers an advance (and sometimes other recoupable costs) by deducting them from an artist's royalty share before making any payments. An artist is "unrecouped" until their advance is fully recovered. See the full guide: Recoupment Tracking Explained.
Related: Advance, Unrecouped Balance
Royalty Rate
The percentage of income (gross, net, or PPD-based) that an artist receives under their recording contract. Rates vary widely — from 10–15% in traditional label deals to 50–85% in modern distribution or licence deals.
Royalty Statement
The formal document issued by a label or publisher to an artist detailing income generated in an accounting period, how it was calculated, and how much is owed or remains unrecouped. Statements are typically issued quarterly or semi-annually.
Split
The contractual percentage of income allocated to each rights holder — label and artist, or between co-writers. A "50/50 split" means each party receives 50% of eligible income. Splits can be per-track, per-release, or applied globally across a roster.
Related: Split Sheet, Royalty Rate
Split Sheet
A document that records the agreed ownership percentages of a composition or master recording between collaborators. Split sheets are signed before a release and define how royalties are divided. See the full guide: Split Sheets in the Music Industry.
SRLP (Suggested Retail List Price)
The full consumer retail price of a physical product. Some older contracts calculate royalties as a percentage of SRLP rather than PPD. Less common in modern digital-first deals.
Related: PPD
Through-to-Artist Rate
The effective percentage of gross DSP income that ultimately reaches the artist after all deductions — distribution fee, label share, and recoupment. A useful single figure for comparing deals. For example, an artist on a 50/50 deal with a 15% distribution fee receives roughly 42.5% of gross streaming income (pre-recoupment).
Related: Net Receipts, Gross Revenue
Unrecouped Balance
The remaining advance or recoupable cost that has not yet been recovered from royalty income. While unrecouped, the artist receives no royalty payments — statements will show the deduction and the running balance. The artist does not owe this amount as a debt if royalties never cover it.
Related: Recoupment, Advance
Further reading
- How Royalty Accounting Works — end-to-end overview of how income flows from DSP to artist
- Recoupment Tracking Explained — advances, costs, and how balances are calculated
- Split Sheets in the Music Industry — what they are, what to include, and how to sign them
- Royalty Statements for Labels — what to include and how to issue them correctly
Put the terminology into practice
RosterRoyalties handles splits, recoupment, statements, and invoicing in one platform — no accounting background required.