pt. 1: Earnings Breakdown

Music Streaming Royalties

There has never been a time that I’ve worked with other artists, from every level and stage of development – when a conversation about royalties and how they are earned wasn’t welcomed.

One of the most confusing aspects of getting paid in the music industry, is and has always been Royalties. Not to mention the multiple avenues that royalties come in: Mechanical, performance, synchronization fees, and print music (which is pretty much nonexistent in urban music like Hip-Hop and EDM). Now here is a 5th element to add to the mix, Music Streaming Royalties.

Music Streaming royalties come from digital outlets like Apple Music, Spotify, Google Play Music, Tidal,etc. who share a percentage of monies earned from ad revenue and/or subscriptions with artists,labels and rights holders. Besides the fact that there isn’t a set amount you can expect from a stream- each store pays a different amount- there are many other factors that can determine what to expect. Are you signed to a major label or an independent artist? Exclusivity to a specific digital store? What about the minimum streams you have to get (monthly) in order to earn minimum wage? The good folks over at SoSouth gathered the 411 into a easy-to-understand chart table that you can take to the bank below:

 Music StoresUnsigned Artists (Indie)Signed Artists (Major)Total Users (Millions)% of free usersPlays Needed to earn min. wage ($1,472)
Napster$0.0167$0.019050%90,000
Tidal$0.0110$0.0125472%130,000
Apple Music$0.0064$0.0073270%230,000
Google Play$0.0059$0.00681050%250,000
Deezer$0.0056$0.00641657%260,000
Spotify$0.0038$0.004414057%380,000
Amazon$0.0036$0.0040660%368,000
Pandora$0.0011$0.00138181%1.2 million
You Tube$0.0006$0.00071,00099.9%2.4 million

 (List ranking digital stores from highest compensation per stream to lowest)

We hope this chart simplifies digital music streaming, and how artists are compensated. There have been many times an artist, confused by the myriad of terms and algebraic formulas on their report sheets – leading to someone on our staff to have to explain the way MSR’s (music streaming royalties are calculated – for the 110th time! This article was written with the hopes to rid all parties involved of the frustration of not knowing what to expect, and putting unnecessary strain on business relationships in the process.

Remember, music streaming royalties aren’t collected by traditional performance rights agencies like ASCAP, BMI, or SESAC – you have to register with Sound Exchange to collect your Music Streaming royalties.

And remember who put you up on game,Labfreq!

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