Thursday, August 11th, 2022

How Do I Get Paid for My Music?

Distribute Music → Get Paid

You’ve recorded a killer track, packaged it up with metadata, submitted it with a digital music distribution service like Soundrop, and it’s now being streamed and downloaded by your fans on Spotify, Apple Music, YouTube Music, and more. Time for that sweet, sweet cash to flow in.

But just how exactly does that work? How do you get paid for your music?

How to get paid for downloads:

For downloads (on places like iTunes), it’s a fairly simple system. The music platforms will sell downloads at the price you set, keep their cut (usually around 25-30%), and send the rest of the revenue to your distributor. If you’re using Soundrop, we then take out our 15% admin cut. Then the rest of that sales revenue? Goes straight to you.

How to get paid for your music streams:

Streaming is a little more complicated. Most streams generate a fraction of a cent, but just what that fraction is depends on a ton of different factors, even within one single streaming service. Take Spotify for example: when a fan streams your music from their saved songs vs. when they stream it from a playlist vs. when they stream it from searching for your album all generate different amounts of sales revenue. And a fan streaming your track from one country might generate a different amount of revenue than a fan streaming in a different country! There are a lot of moving parts here.

Revenue? What about Royalties? What’s the difference?

You’ll notice that I’m saying “sales revenue” and not “royalties.” That’s because those are actually two totally different types of money! Any time your music is streamed or downloaded, it generates both sales revenue and royalties, and in fact, the money you may be calling “royalties” is actually your “sales revenue”. Confusing? Lemme break it down.

Sales revenue is collected by your distributor on your behalf and is money that is due to the performing artists on a given track.

Then, there are two different types of royalties–mechanical and performance–and those are money that are due to be paid to the composers of a piece of music.

All distributors, like Soundrop, are able to collect your sales revenue and pay that out to you on your behalf. If your song is an original song that you wrote yourself, you may be due further money and should look into registering with a Performance Rights Organization (or P.R.O.) to collect those funds.

What about splitting my royalties (er… sales revenue)?

But if sales revenue is due to artists who perform on a release, what happens when you have multiple performing artists on a track? Payment is owed to all of them, right? You could do things the old-fashioned way and have one person collect the cash, then divvy it up based on what you agree on with your collaborators, but why do that when we can do it for you?

Soundrop has a super easy, automated revenue sharing tool where we can literally split up your revenue by percentage to everyone who needs to get paid. Want to keep 50% and give your collaborator 50%? We can do that. Have 15 artists on there who all need different percentages? We can do that. Artist isn’t already using Soundrop? We’ll make them a free account–then we can still do that. It’s super easy to set up: you enter the percentages everyone’s owed and the email addresses for your collaborators, then we will automatically split up your revenue for you and send the appropriate amounts to the appropriate accounts so that you don’t have to lift a finger. Soundrop payment is neat and easy so you can spend less time doing admin work and more time making new music.

Alright, done! Now… where’s my money!? 👀

With any distributor, you’ll notice that payments aren’t instant. This is because the platform that your music was played on needs time to calculate exactly how much they owe you for each download or stream. Once they’ve calculated that, they send a bulk report over to your music distributor for all those sales, then your distributor gets it paid out to you.

Their calculations can take a little time–usually a few months–so if you haven’t seen a sale yet and your release has been up for several weeks, don’t panic! That money is just still being tallied up by the platforms. It’s why if you cancel your music from distribution, you could still see sales coming in for a while–it’s not that your music is still live and generating new revenue for you, it’s that it generated revenue before you canceled it that is still being reported for payout. Our Help Center actually has a great article that summarizes the average payout timelines for each platform–you can check that out here.

While that delay can be a little frustrating, it’s pretty advantageous; your payments go through multiple rounds of vetting, first by the stores themselves, then by your distributor, to make sure you’re getting every single cent you’re owed. Hopefully that makes the delay pretty worth it!

Your creations deserve recognition all the way from your brain to your bank account. Collect what you’re owed. Make a free Soundrop account today.