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Music Royalties And Streamshare

Music Royalties And Streamshare

Music Royalties – This past week music streaming service gargantuan, Spotify, released ‘Loud and Clear’. The aim of the website is to discuss how music royalties and Spotify work. How Spotify ultimately pays distribution companies these royalties. The idea then being that distribution will pay the musicians royalties they deserve.

What Are Music Royalties?

Music Royalties

To avoid digging too deep into nerdy music industry terms I’ll be brief. Music royalties can be summed up in one word; Payment. It’s not anywhere near that simple to go further on the topic, but now you at least have an idea. Aside from the Creator, one must consider anyone else included on the track/EP/Album. Other recording artists, songwriters, composers, music publishing companies and copyright holders.

The Four Types Of Royalties In The Music Industry

  • Mechanical royalties
  • Public Performance royalties
  • Synchronization royalties (sync)
  • Print Music royalties


Mechanical Royalties

Mechanical royalties mean music income. Income for reproducing and distributing this copyrighted music work. All formats of playback would be acceptable examples of mechanical royalties. Examples including CDs, Vinyl and Streaming Services.

Public Performance Royalties

Public performance royalties mean music income for artists as well. When copyrighted works are performed, streamed or played publicly the musician receives royalties from its public use. Publishing Rights Organizations, or P.R.O.’s, will collect and dispense royalties in regard to public performance. Some examples of P.R.O.’s would be music publishers like B.M.I., A.S.C.A.P., or S.O.C.A.N.

Sync Royalties

Sync royalties mean musicians earn revenue for their copyrighted works through its use, or ’sync’ in visual media. Synchronization licenses make this possible. A sync license is deployed when the copyright owner lends the music for use in films, ads, TV, video games, etc. It’s worth noting the importance of a master use license here as well. Both are necessary to see a sync license through to completion.

Print Music Royalties

Print music royalties are scarce for the independent artist in the 21st century. This is unless you are working on material which is more traditional and requires sheet music. Since most of us are not distributing sheet music manuscripts with the hope of making a profit, this is why it is seen more infrequently nowadays.

Spotify’s Streamshare And Music Royalties

Spotify Logo

Well, for an effort at being straight-forward, I find it funny I need to click no less than three times to get an answer from the loud and clear page. Worth adding that click one was on a link titled, “What is Spotify’s Streamshare?”

Streamshare is, as defined by Spotify on Loud and Clear, “Every month, in each country we operate in, we calculate streamshare by adding up how many times music owned or controlled by a particular rights holder was streamed and dividing it by the total number of streams in that market.

So if an artist received one in every 1,000 streams in Mexico on Spotify, they would receive one of every $1,000 paid to rights holders from the Mexican royalty pool. That total royalty pool for each country is based on the subscription and music advertising revenues in that market.”

Uhm, Excuse Me? *Raising Hand* I’m Going To Need To Call Bogus On This One

The trouble enters here, when Spotify says, “…and dividing is by the total number of streams in that market.”

This means the top dogs in your market of the music industry define your music royalties. Spotify tries to deny this on the same page, but by using logic, it’s hard to see how this is not the case.


How Do We Reclaim Our Music Royalties?

Unfortunately, major change at Spotify or to music distribution laws needs to occur to change this. I don’t foresee either happening any time soon. What would be nice is if Spotify adopted a more one-to-one, direct monetization system. Similar to what Deezer has done for years. Also similar to what Soundcloud will be making universal shortly.

I commend Spotify for coming forth and admitting what streamshare was (finally). Other than that, this is another slap in the face from Ek and Co. A really unnecessary one that sings. Well, we can still make fun of Spotify’s CEO for being super bald and looking like a baby in a grown man’s body. Can’t take that away!

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