How Music Streaming Services Pay Musicians

How Music Streaming Services Pay Musicians

Written By Petra Hule

Picture this, it’s the early 90’s and all you want to do is listen to music on demand without having to burn an entire playlist on a CD. Unknowingly, this is where the need for music streaming platforms such as Napster was created. Today, spaces like Spotify, Pandora, or Apple Music adhere to this need of being able to stream music whenever and wherever you are.

What Is A Music Streaming Service?

In a nutshell, a music streaming service is a web-based service that lets listeners stream songs to their computers or mobile devices.

Listing your tracks on these platforms can be scary and challenging as they are at the top of the streaming platforms, making the industry a competitive market, however, there is a way to get started.


Listing Your Music On Streaming Platforms

It’s Friday night, you come up with a track in your bedroom and by Sunday you’ve stayed up for two nights straight because the ideas keep flowing and your fingers won’t leave the piano. You think it’s ready and decide you want to publish the song, but don’t know where or how to start.

If you’re looking for an all-in-one solution, we recommend TuneCore. Tunecore allows you to upload your music and then they take care of the rest, listing your music on multiple streaming services such as Spotify, TikTok, Apple music, and many others. We’ve teamed up with TuneCore to offer musicians a 20% discount off of their first single or album distribution. Get the discount here.

How Much Do Streaming Services Pay Musicians?

Each streaming service pays different rates, which is why it’s important to list your music everywhere. Not only does this give you a greater chance of success but you may see more success on different platforms which can give insight into your audience, allowing you to read your listeners and know where else you can list your music on services alike.

What Factors Into Getting Paid

Streaming services base their rates on four main factors: location and country of the listener, if the listener has a paid subscription or the free version, the artist’s royalty rate respectively (we’ll come back to this later), and the currency and relative pricing in different regions respectively.

So, we see now that listing your music is not as difficult as trying to estimate or rather, “guesstimate” the earnings you will be receiving as it’s based on many things out of your control.

How To Calculate Music Royalties

Let’s define the basics. A simple way to figure out the rate on different streaming services is to use a music royalties calculator which provides an estimated earning per stream.

As a rough guide, we will look at the difference between Spotify and Apple Music for this example to showcase the earnings per view on different services, keeping in mind this is per stream based in the United States.

So, the estimate per stream is $0.00437 on Spotify and $0.00783 per stream on Apple Music, thus, supporting the fact that the more streaming services your music is listed on, the more exposure and variations in rates.

These figures also exemplify that streaming services are merely a stepping stone in the right direction of branching out and releasing your music, it’s not the be-all and end-all. We see that many artists’ have millions of streams providing them a hefty income, this shows that it is indeed possible. However, don’t be disheartened if it doesn’t happen right away.

What Music Streaming Service Pays The Most?

When we took a look at the services with the highest royalties per stream, TIDAL, was listed in the Top 3. Tidal is a Norwegian-based music, podcast, and video streaming service. 

When picking where to list your music, the best answer is everywhere and anywhere. The more the better as people use multiple services on a daily basis, thus, one user could be contributing to your profit on multiple platforms.

However, other platforms that can assist this process of putting your music out there include SoundCloud, YouTube Artist Hub, CD Baby, BBC Music Introducing, and most importantly, your own musician website.

Royalties can be difficult to keep track of as there are a number of different types of royalties, such as publishing, songwriter, or producer royalties.

How Music Royalties Work

To keep it simple, we will discuss how Spotify’s “Pay Per Stream” and royalties work. Streams and music on Spotify earn two different kinds of royalties: recording and publishing.

Recording royalties are the money owed towards the rightsholders for recordings which are paid through the licensors to the artist, such as the artist’s record label. 

Publishing royalties, on the other hand, is the money owed to the songwriters or creators of the song itself which is issued to publishers.

How Often Are Royalties Processed?

Royalties are processed on a monthly basis which takes into consideration fees such as credit card processing fees, billing, sales commission, and taxes. All these subtracted then leave the net revenue that is determined by stream share which is the total number of streams per month. This is divided into factions of who was listening and what portion of those listeners are controlled by a specific rightsholder.

Essentially, it all comes down to the agreement the artist has with their label or distributors as their profit comes directly through them. For more information about Spotify specifically, check out the Spotify for Artists page. When it comes to other streaming services, look out for their specific terms and agreements about royalties respectively.