Every time a song streams, money starts moving through one of the most convoluted payment systems in any industry. Understanding it takes ten minutes, and it explains almost everything about why artists are broke and catalogs are valuable.
The two copyrights in every song
Every recorded song contains two separate assets. The master recording is the actual audio — historically owned by labels, increasingly owned by independent artists. The composition (or "publishing") is the underlying song itself — the melody, lyrics, and structure — owned by songwriters and publishers. Each generates its own royalty streams, collected by different organizations, on different schedules.
Where the money comes from
Streaming royalties are the big one for modern catalogs: Spotify, Apple Music, and other services pay rights holders from subscription and ad revenue. Performance royalties flow when a song plays on radio, in venues, or on TV, collected by PROs like ASCAP and BMI. Mechanical royalties come from reproductions, including a slice of every stream, collected in the US by The MLC. Sync fees are paid when songs land in films, shows, and ads.
How a stream becomes a check
A stream happens. The platform tallies it and calculates a payout based on its revenue that month and the song's share of total streams. For an independent artist, the master side flows through a distributor — DistroKid, TuneCore, CD Baby — which pays out monthly statements, typically two to three months after the streams happened. The publishing side takes even longer, often six months or more, routed through PROs and the MLC.
Why this matters for artists
Royalties are slow, fragmented, and opaque — but they are also predictable. A catalog that has streamed steadily for three years tends to keep streaming, which is exactly why institutional investors have spent billions buying catalogs. The same predictability that attracts funds is what makes a catalog valuable to an artist's own fans.
Artist or manager? Get a free estimate of what your catalog is worth and what a fan raise could look like: run the 30-second calculator.
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