Instead, they’re based on a percentage of total revenue and a number of other variables such as the location of the song being streamed, the country’s currency, the type of streaming (interactive or non-interactive), and others. The truth is streaming royalty calculations are incredibly convoluted, confusing, and when you take a closer look – disproportionate.Ĭontrary to popular belief, payouts aren’t based on a fixed “per-play” rate. If the average consumer were to guess how artists get compensated on streaming platforms, odds are they would assume that it boils down to how many times any given song is streamed. How Do Artists Make Money on Streaming Platforms This category includes platforms like Spotify and Apple Music as well as paid versions of traditionally non-interactive platforms such as Pandora Premium.

An example of a non-interactive service is Pandora.īy contrast, interactive music streaming allows the user to control their listening experience by selecting which songs play and when. Noninteractive music streaming is a similar experience to listening to the radio where the songs you hear are determined by the service itself. Music streaming services can be broken down into two distinct types: non-interactive, and interactive. So it comes as no surprise that for an industry whose profits had been ravaged by an overwhelming abundance of illegal downloading sites, the emergence of digital streaming platforms was something of a revelation – one that would transform the music industry on a fundamental level.īut the real question is: are streaming platforms really the godsend they appear to be? To answer that question, you need a deeper understanding of how the system works and it really benefits in the long run.

In the wake of sites like Napster, Limewire, Grokster, and others, which allowed users to download and share music without compensating the recognized rights holders, the very foundations of the music industry’s business model began to crumble.

These days it’s increasingly difficult to recall a time before the digital revolution (even for those of us who lived it) – a time when your only options for music were the radio or your own personal collection of CDs, and the bread and butter of the music industry was unit sales.īut that all changed when the fire nation, whoops – the pirates – attacked.

The pirate download my name is bread