Saturday, March 17, 2012

Streaming Music Revenue Payments

From the Future of Music Coalition

If a song is streamed on Spotify, the company has three entities to pay:

1. the sound recording copyright owner, which is usually the record label.  In many cases, this payment is made via an aggregator like IODA, The Orchard, Tunecore or CD Baby.

2. the song publisher

3. the performance rights organization, which then pays the songwriter

Ooh, where’s the musician/recording artist on this list? They’re not on it, because they are not paid directly by Spotify.  There are at least three versions of how money flows from Spotify to a musician/band:

Unsigned/independent musician, using Tunecore as its aggregator: Spotify > Tunecore > musician

Musician signed to an indie label: Spotify > IODA/Orchard > indie label > musician

Musician signed to a major label: Spotify > major label > musician

Add into this the time lag between streams and payments being filtered down the food chain, and you can see why “I don’t know” might be the answer that is most appropriate in this instance.

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