More than ever, artists rely on multiple sources of income to make ends meet.

Touring, merchandising and streaming royalties are just a few important examples of income streams artists need to stay on top of. But royalties are an increasingly complicated part of the music business, especially with the rise of music streaming services.

With most listeners turning to Spotify, Apple Music, YouTube, and other streaming services to play songs, streaming royalty collection is an often misunderstood process that causes artists to leave money on the table. It makes sense considering there are different types of royalties, multiple rights holders, and several companies involved in the chain.

In this article we’ll take a look at what streaming royalties are, where they come from, the path they follow until you get paid, and how to ensure everything is set up correctly. By the end, you’ll have everything you need to understand how these royalties work and how to receive them properly.

Let’s dive in!

What Are Streaming Royalties?

Streaming royalties refer to payments made to rights holders when music is played on digital platforms. These platforms do not sell the music directly. Instead, they grant access, which means royalties come from subscriptions or ad revenue.

Each time a song is played, a small amount is allocated to the people who own or control the rights to that music. Who receives that money depends on the type of royalty and the contractual agreements behind the track.

Recording vs. Publishing Royalties

There are two distinct categories of music rights: recording rights and composition rights. Each of these corresponds to a specific type of royalty.

Recording Royalties (Master Royalties)

Recording royalties go to the rights holders of the sound recording. These are often record labels or independent artists who control their own masters. This portion typically represents the audio as it was recorded and released.

If a song is streamed, the platform pays the rights holder a share based on that master recording. Artists signed to labels usually have to share their revenue with their label, depending on the terms of their contract.

Publishing Royalties

Publishing royalties come from the underlying lyrics and melody in the composition itself. These are split between the songwriter and the publisher.

Streaming platforms trigger performance royalties every time a track is played. These get processed and distributed by performing rights organizations (PROs) like ASCAP, BMI, or SESAC in the U.S. In other countries, similar organizations handle that role.

Sources of Streaming Royalties

Streaming services tend to follow similar royalty models, but each has its own approach to dividing and distributing revenue. Royalties can come from multiple streams depending on how the music is used.

Subscription-Based Platforms

Services like Spotify, Apple Music, and Tidal rely on monthly payments from users. These payments form a revenue pool. That pool gets divided based on each track’s share of total streams on the platform during that period.

So if a song gets 1% of all streams in a given month, it earns 1% of the platform’s payout pool for that time.

Ad-Supported Streaming

Platforms like YouTube or the free tier of Spotify also earn money through advertisements. A portion of that ad revenue funds royalties in a similar way, though the amount paid out per stream is often lower than subscription-based plays.

Video Platforms and User-Generated Content

Songs that appear in videos on platforms like TikTok, Instagram, and YouTube Shorts may also generate royalties. These can include both recording and publishing royalties depending on how the audio is used.

The Process of Collecting Streaming Royalties

The path from a stream to a royalty payment involves multiple steps. Different organizations handle different parts of the process, and how royalties are tracked and distributed can vary depending on the agreements in place.

Distribution of the Recording

To receive master royalties, recordings need to be distributed to digital platforms. Distributors manage this by uploading tracks, delivering them to platforms, and collecting revenue on behalf of the rights holders.

Each distributor follows its own payout schedule and may retain a portion of the earnings as part of the service. Independent artists often select distribution partners based on ease of use, reporting tools, and royalty handling features.

Collection of Publishing Royalties

Publishing royalties come from the composition side of a track and are handled separately from the recording. Performing rights organizations (PROs) monitor streams and collect performance royalties. Mechanical royalties, which are paid for the reproduction of a song, are collected in the U.S. by agencies such as The Mechanical Licensing Collective or the Harry Fox Agency.

Songwriters need to be registered with the appropriate organizations to receive publishing royalties. Some opt to work with publishing administrators who can assist with registration, royalty collection, and rights management.

Royalty Splits

If you’re working with collaborators, there’s a good chance everyone involved will expect a share of the royalties and streaming revenue after the release. That means you’ll need to figure out how the royalties are divided and create a split sheet to submit to the organizations responsible for paying them.

If your digital distributor has built-in royalty split features for recordings, splitting streaming royalties is significantly easier. LANDR Distribution, for example, makes it easy to specify who gets what percentage of streaming revenues earned on streaming platforms before releasing.

Calculating Royalties

Royalty statements often cause confusion due to the different revenue types and the multiple parties involved in each payment. Without clear agreements and proper metadata, some royalties may be delayed or go unclaimed.

Major platforms generally pay between $0.003 and $0.008 per stream. But the final amount you receive will vary based on factors like your country of origin, platform revenue, and contractual terms.

The distribution service provider you work with may also impact your payout if the distributor takes a percentage of your royalties. Of course, not all distribution services take a cut. For example, LANDR Distribution never takes a cut from its active subscribers.

Streaming revenue from the master recording may require extra attention unless the distributor provides built-in royalty management.

If you want a general picture of what to anticipate from digital plays, tools like LANDR’s Royalty Calculator allow users to enter stream counts and get a breakdown of projected earnings based on average platform rates.

It all comes down to this:

Streaming royalties move through a layered system, and the amount you receive depends on factors like the distribution format, where the plays happen, and how accurate the reporting is. Listener activity turns into platform revenue, which then passes through labels, distributors, publishers, and collection agencies before reaching the contributors.

Understanding this process from start to finish can help clarify where the money comes from and what might cause delays. Each organization involved handles a different part of the chain, so knowing their roles can help reduce confusion and prevent missed payments.

Everyone involved in the process (artists, publishers, distributors, and royalty collection agencies) relies on accurate, well-organized data and clear communication. If anything’s off, payments can be delayed or go unclaimed. Keeping metadata clean, registering works properly, and tracking usage are key steps in making sure royalties get to the right place.

Also, don’t forget to register your music with a PRO (Performance Rights Organization). While PROs handle publishing royalties, not recording royalties, it’s still crucial to make sure all your tracks are properly registered. It’s a small step that helps ensure you’re getting paid for every use of your music. If you’re just signing up now, you can still claim royalties retroactively, so you might even get a surprise payout from past plays you didn’t know you were owed.

And just as important as PRO registration is choosing a distributor that helps you stay on top of everything. Ideally, you want a platform that won’t take a cut from your royalties and gives you clear, detailed insights into your earnings, splits, and release stats.

That’s why LANDR Distribution makes a difference. It’s designed to help independent artists stay in control, with full royalty payouts, transparent reporting, and tools to manage your collaborators with ease. They’ll focus on making sure you get paid for your tracks so that you can focus on what you do best: making music!