How Streaming Revenue Actually Flows
When someone streams your song, money moves through a specific chain before reaching you. Understanding this flow explains why your per-stream rate isn't a fixed number and why statements can be confusing.
The basic sequence:
- Listener pays subscription or watches ads
- Platform takes its cut (roughly 30%)
- Remaining 70% goes to rights holders
- Recording rights (your distributor payment) and publishing rights (songwriter payment) split
- Your distributor collects recording share, deducts any fees
- You receive what's left
Each step involves real percentage cuts. A $10.99 subscription becomes roughly $7.70 for rights holders, then splits between master and publishing, then your distributor takes their cut (0-15% depending on service), and finally you're paid.
Revenue by Subscription Tier
Not all streams generate equal revenue. The data from 388,000+ transactions shows clear stratification:
| Transaction Type | Avg Revenue Per Stream | Share of Total Streams |
|---|---|---|
| Subscription Audio Streams | $0.0037 | 23.1% |
| Ad-Supported Audio Streams | $0.0012 | 7.3% |
| Mid-Tier Subscription | $0.0028 | 14.7% |
| Non-Interactive Radio | $0.0009 | 23.7% |
| Fitness Subscription | $0.0344 | 5.3% |
| Short-Form Video UGC | $0.000004 | 25.4% |
Premium subscribers generate roughly 3x the revenue of ad-supported listeners on the same platform. An artist whose audience skews toward paying subscribers sees meaningfully higher effective RPM than one with predominantly free-tier listeners.
The Non-Interactive Radio Reality
"Non-interactive radio" - Pandora, iHeartRadio, SiriusXM - accounts for 23.7% of streams in this dataset but pays significantly less per play than on-demand streaming.
This reflects both the legal rate structure (compulsory licensing rates differ from negotiated streaming rates) and the listening context. Radio listeners don't choose specific tracks; they're served programmed content. The value exchange differs from someone actively seeking your song on Spotify.
Pandora alone generated 8 million streams paying $16,500 - an effective $2.07 RPM. That's lower than Spotify but with higher total volume for artists whose music fits radio programming.
Understanding Mechanical Royalties
Your distributor statement shows recording royalties - payments for the sound recording (the master). But streaming also generates mechanical royalties for the underlying composition.
If you wrote the song you're distributing, you're owed both:
- Recording royalties: Paid through your distributor
- Mechanical royalties: Collected separately through the MLC (Mechanical Licensing Collective) in the US, or through publishing administrators globally
The mechanical rate for US interactive streams is set by the Copyright Royalty Board at roughly 15.35% of streaming revenue. This doesn't come out of your recording royalty - it's a separate payment to songwriters/publishers from the platform's total rights holder payout.
Many independent artists miss these payments entirely because they haven't registered with the MLC or a publishing administrator. If you write your own music and haven't claimed mechanicals, you're leaving roughly 15% of your total streaming value uncollected.
Fraudulent Stream Detection
A small but notable category in royalty statements: fraudulent stream detection and clawbacks.
In this dataset, 4,129 streams across 358 transactions were flagged as fraudulent - bots, stream manipulation services, or suspicious patterns. Revenue for these streams was either never paid or clawed back from prior statements.
Platforms are increasingly aggressive about fraud detection. Spotify and Apple Music both charge distributors when fraud is detected, and distributors pass those costs to artists (or terminate accounts for repeated violations).
The best practice: never use stream manipulation services. Beyond ethical concerns, the financial risk isn't worth it. Clawbacks can exceed the original "earnings," and account termination means losing your entire catalog.
Currency Conversion Effects
Streaming revenue is generated in the listener's local currency, converted to your payout currency, and reported in your statement currency. Each conversion introduces small variations.
A statement might show:
What Actually Lands in Your Account
Taking a hypothetical 100,000-stream month with typical distribution:
| Category | Streams | Revenue |
|---|---|---|
| Spotify Premium | 25,000 | $92.50 |
| Spotify Free | 15,000 | $18.00 |
| Apple Music | 20,000 | $106.00 |
| Pandora | 15,000 | $31.00 |
| YouTube Music | 10,000 | $20.00 |
| TikTok UGC | 10,000 | $0.04 |
| Other DSPs | 5,000 | $15.00 |
| Total | 100,000 | $282.54 |
If you use a commission-free distributor (DistroKid, TuneCore), you keep the full $282.54. If you use a 15% commission service (AWAL), you keep $240.16. If you use CD Baby (9% commission), you keep $257.11.
This doesn't include mechanical royalties, which add roughly $35-45 if you wrote the song and are properly registered.
Key Takeaways
Subscription tier matters more than platform choice. Premium subscribers on any platform pay more than free-tier users on the "better" platform.
Non-interactive radio is high volume, lower margin. Don't ignore it, but don't expect Spotify-level per-stream rates.
Claim your mechanicals. If you're a songwriter not registered with the MLC, you're missing 15%+ of your streaming value.
Expect variation. No two months are identical. Currency fluctuations, tier mix shifts, and platform policy changes create ongoing variance.
Watch for fraud flags. If your statement shows clawbacks or fraud deductions, investigate immediately. Unaddressed issues can escalate to account problems.