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What do you get paid for?
First of all, we need to briefly distinguish what you are or can be paid for. We are talking about rights and royalties here. It is crucial to be aware of the distinction of the two different copyrights that a musical work possesses:
- Song Copyright ("Publishing Rights")
- Recording Copyright ("Master Rights")
The song copyright refers to the composition and lyrics of a musical work. It is, by default, owned by the songwriter(s), and it generates publishing royalties. The recording copyright is, by default, owned by the artist(s) who have performed on the recording of a musical work, and it generates (master) recording royalties. In the remainder of this article, we will only refer to recording royalties, as these make up the larger share. However, you should not ignore the publishing royalties, which also make up a relevant part and can generate considerable income. In our article Music rights and royalties: caring & sharing you can learn how to navigate the German rights landscape, how to simplify your processes and maximise your income as a musician.
Overall, the digital streaming platforms ("DSPs") such as Spotify & Co. usually divide their revenues as follows:
- DSP keeps approx. 30% of subscription & ad revenue for itself
- DSP pays the artist/label approx. 55% of the allocated share of the royalty pool
- DSP pays the songwriter/publisher approx. 15% of the allocated share of the royalty pool
These percentages can vary from DSP to DSP and depend on the models they follow or the type of licensing agreements they have with collective management organisations or major licensors, etc.
How much do streaming platforms pay per stream?
It is difficult to accurately predict your earnings from streams. The royalties paid out for streams are different for each streaming service and there is no fixed or unified "pay-per-stream" earnings. Various factors have an influence on streaming earnings:
- The type of streaming platform (DSP) and its conditions
- Country and location of the listeners
- Whether your listeners have a free or paid account and what type of subscription they have (e.g. student, family, etc.)
- The pricing & currency in different regions
This makes things complicated when trying to predict exactly how much you as an artist will earn from your streams - it is virtually impossible as all these factors normally have to be taken into account. However, there are numerous websites with streaming royalty calculators that can give you an estimation of how much you can expect to earn. Here are a few examples:
- https://www.streamingroyaltycalculator.com
- https://streamingeinnahmen.de (Germany)
- https://www.manatt.com/music-streaming-royalty-calculator (United States)
It is also not uncommon in the industry to calculate with average values, e.g. around €0.003 for a Spotify stream. How much of the royalties end up in your account also depends on the share you are entitled to - this can be up to 100% for a DIY release and usually significantly less in the case of a label release. Have a look at our article Label or DIY release? The pros and cons if you would like to find out more.
Is it possible to earn money with Spotify or other music streaming providers without a label?
Yes! You can release your music to Spotify & co. independently, for example via MusicHub ✌️. Learn more in our article Digital music distribution: how to get your tracks on Spotify and Co. or simply register here at MusicHub and get started.
How much do you earn per downloaded album or song?
In the case of downloads (e.g. via iTunes or Amazon), an estimate is somewhat easier than for streams. Prices for downloads are more or less standardised, but vary depending on the packaging of the release (how many tracks, etc.). What you end up getting as an artist is generally the same breakdown as with streaming: DSPs keep their own cut, X% is paid for the recording and Y% is paid out for the composition (”work”).
How to increase your streams, downloads and therefore earnings?
The short answer is: promotion. As you may already know, it's quite a challenge to get your music heard in the competition for attention out there. But that shouldn't discourage you from doing something! Do you need help promoting your music? Learn how to set your goals correctly, promote yourself and your music, and efficiently execute your promotional activities with our Promo Guide.
Sources:
- https://archive.completemusicupdate.com/article/dissecting-the-streaming-inquiry-overview
- https://producerhive.com/music-marketing-tips/streaming-royalties-breakdown
- https://www.billboard.com/pro/music-streaming-royalty-payments-explained-song-profits
Discover MusicHub's Artist Spotlights
Get to know artists that have released via MusicHub on our blog and learn how they started their careers and tackled the challenges an independent musician has to face.
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Photo Credit Blog Cover: ©unsplash/Ibrahim Rifath
