An important notice: Following this post, to better your understanding about the streaming sector.

For every stream, there are 3 separate royalties to be accounted for. Be aware that the streaming platform makes 3 different payments to rightsholders.

Meaning, when a listener streams your song and let's say that stream is worth NGN1; the entire NGN1 doesn't go to you [the artist] alone, it's also goes to your collaborators [after the platform takes its cut] and I'll tell you how.

After the streaming platform takes its share, the money is then split into 3 different payouts viz:

• Mechanicals royalties
• Public Performance royalties
• Recording Royalties

Mechanicals: This is automatically generated whenever the listener chooses to play a song and is paid to Songwriters/producers [or their publisher]. Now, you understand the spat between songwriters and Spotify, as discussed in March 2019 as some Artistes wondered "what [direct] business does Spotify have with songwriters". This payment is down to everyone who contributed to the song, even if it's a single line.

Public Performance Royalties: This is paid to Songwriters/producers [or their publisher]. This royalty is also generated for every stream - even if the listener is enjoying it in the privacy of his/her headphones.

Payout to Recording Owners: This makes the most substantial part of the payout and it goes to owners or custodians of the Masters (artist, label, distributor).

So when people ask "how much streaming platforms pay".

They're often referring to the payout for masters.

Summary:

For every stream, streaming platform takes its cut, which is about 30% while 70% goes to the music industry. As we know, in the music industry, there's the recording (masters) and publishing sector (composition).

So out of the 70% that comes to the music industry, about 13-15% (unsure of the exact figure) goes to the publishing sector - which is then split into Mechanicals & Public Performance.

Also, not many artistes get their mechanicals & public performance, most are only aware or interested in the chunk [55-58%] of it [recording royalty], while the rest 13% goes to the royalty blackbox as the Songwriter/producer is either not recognized, or signed to a publisher that handles this or mere inappropriate metadata. And in cases where the Artistes is the Songwriter and/or producer, they don't have a publisher that ensure these royalties are acclaimed.

According to a 2015 report by Berklee College of Music, 20%-50% of music payments do not make it to their rightful owners. Shocker?