Music Royalties: What They Are and How Artists Get Paid

If you’ve ever wondered why your favorite songs keep popping up on playlists, you’ve probably heard the word “royalties.” In plain terms, royalties are the money musicians earn when their recordings are used. Whether it’s a Spotify stream, a YouTube video, a download, or a live concert, each play triggers a tiny payment that adds up over time.

Understanding the basics helps you see where the money goes and why some artists make big bucks while others struggle. Below we break down the main types of royalties, who decides the rates, and what you can do to make sure the artists you love get a fair share.

Streaming and Digital Sales: The Most Common Royalties

When you stream a song on Spotify, Apple Music, or any other service, that service pays a royalty to the rights holder. The amount varies, but it’s usually a fraction of a cent per stream. The payment is split between the record label (or the artist’s distributor) and the songwriter/publisher. If the artist owns both the recording and the composition, they keep most of it; otherwise, the money is divided.

Digital downloads work similarly. Stores like iTunes sell a copy of the track, and a portion of the purchase price goes to the same parties. Because a download is a one‑time sale, the royalty per unit is higher than for a stream, but the overall volume is usually lower.

Live Shows and Performance Royalties

When a band plays a concert, they earn two kinds of money: ticket sales and performance royalties. Ticket revenue goes straight to the promoter and the artist, but performance royalties are collected by performance rights organizations (PROs) such as ASCAP, BMI, or PRS. The PRO tracks when a song is performed publicly—whether on stage, on radio, or in a restaurant—and then distributes royalties to the songwriters and publishers.

For big tours, these royalties can be a sizable chunk of the income, especially if the setlist includes many copyrighted songs. Smaller venues still pay out royalties, but the amounts are modest. Artists often register their songs with multiple PROs to ensure they get paid worldwide.

Another source of live‑event money is the "mechanical" royalty, which applies when a live recording is sold or streamed later. If an artist releases a live album from a concert, the same streaming and sales rules apply.

Now that you know the basics, here are three quick ways you can help artists earn more from their music:

1. Buy music, don’t just stream. Purchasing a track or album puts more money directly into the artist’s pocket.
2. Support official streams. Use the platform the artist prefers; some services have higher payout rates.
3. Attend live shows. Ticket sales and on‑site performance royalties both boost earnings.

In short, music royalties are a complex web of payments that flow from every play, download, and performance. By understanding where the money goes, you can make smarter choices that keep the music you love alive and thriving.