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Music streaming platforms, also called Digital Services Providers (DSPs), are often criticized for their artist payment model. And yet their success is too important for artists not to make their musical works available on these platforms.
A major advantage of DSPs is that it’s very easy for artists to make their music available on them: you don’t need a manager or a label nowadays. You simply need to register with a digital distributor such as Distrokid, CD Baby or TuneCore.
Because the business model of these actors is still quite new, it evolves regularly. It is not easy for artists to understand all the legal and financial aspects of it. The fact is that the money generated by artists on streaming platforms depends on the specifics of their own situation more than the mechanics of the platform.
To get the most out of these music industry players, it is important for artists to understand how they work.
The performer is the person who represents, sings, recites, declaims, plays or performs in any other way a literary or artistic work, a variety show, circus, or puppet show. Though the exact legal definition may vary slightly from one country to another, the substance is always the same.
In just a few words, these are the people who take the stage – such as the singer or guitarists – as opposed to someone who is solely responsible for composing. It is common that several people have been working on the same part of the creation of a track. The performer may also be a songwriter, either in a band or solo.
If this describes your case, then you accumulate different rights, and thus several types of remuneration. As a solo artist, it’s easy to add everything up, but in a band, it's vital to define the roles of each member, and therefore the rights held by each of them, before receiving payments. Not only does this avoid unnecessary misunderstandings, but it also gives you more time to create music together!
To stay focused on the streaming aspect, we won’t list here all the rights that exist in the music industry. Keep in mind that the performer is entitled to master royalties.
Performers hold master rights as a result of their contribution to the recorded performance of the musical work. This entitles them to receive master royalties for that recording.
As with other types of rights, master royalties may come from various sources:
To understand how incomes work for performers in streaming, it is necessary to distinguish between
A distributor is a music industry agent whose function is to sign partnerships with music streaming services on behalf of musicians. Its job is to deliver content that meets the standards of streaming services (audio definition, metadata, and more). Distributors have changed the face of the industry forever by making it possible for millions of artists to be available on Spotify without having to be on a label.
When contracting with a distributor, you entrust them with one job: making your songs available on streaming services. Their mission is to do this, and to share with you the master royalties generated by the streams they achieve for you.
This is where your situation plays an important role: if your contribution is solely limited to your role as a performer, there is a high chance that you’re not the person who created the band account on DistroKid to distribute the recording to the streaming services. That person might be the leader of the band, if there is such a thing, or the producer.
This means that you have limited visibility over the revenues generated by the recordings on the streaming platforms. That’s why it’s so critical to define in advance the splits between all the people who contributed to the recording:
There is no universal answer to this question. All bands will end up with their very own solution, and that’s totally fine. But before releasing your first single, EP or album, you need to address this question. Otherwise, when it comes to the time of the first paycheck, you might end up in conflictual discussions about how much should everyone get. Better to tackle this from the beginning.
Make sure also to define who can access the account on the distributor’s website, and how often this person should report to the others. If you’re a solo artist – meaning that you act as a songwriter, performer, and producer – then it’s easy. You created the account, and you get 100% of all the revenue streams.
First, it is important to remember that all companies that produce recordings – the masters or records mentioned above (or even named phonograms if you want to sound a little bit posh) – are labels, including record companies. They benefit from the recording copyright that they share with the performers they represent.
Also, it is very important to perfectly understand the contract that you are about to sign with your label. This contract will define the distribution of your rights with the producer. A crucial part of the contract is how incomes, whether related to streaming or not, are shared. Being in a label typically means that there is another intermediary between you and the streaming platforms. Your label might have a deal with a major distributor, or they might rely on another third party to handle the technical part of delivering tracks to streaming services.
Digital distribution is indeed a truly complex technical endeavor. It requires uniformizing the data of each track and adapting it to make sure it meets the technical requirements of all the streaming platforms. And the latter don’t always have the same requirements. That’s why even the bigger labels often work with a third party to handle digital distribution. It really is a separate job in its own right.
This means that before you get your share of your master royalties, the technical third party gets a share, and then your label gets a share. Which doesn’t mean that being on a label isn’t interesting, though: they offer a wide range of services to further develop your career – so it’s more a question of whether the benefits they bring outweigh the cut they take.
Performers are related to the recording of a song and are remunerated by master royalties because they contribute to the master. Streaming can bring 2 different situations for performers: a simple distribution contract has been signed (distribution), or a partnership with a label. The income will depend on the situation.
