One Canadian made $114 million after we all pressed Play.

If there’s one word to describe listening to music today, it’s convenience.

When there’s a song stuck in your head, you can simply reach into your pocket, grab your phone, and within a few taps, hit that play button.

Taylor Swift’s Cruel Summer starts playing.

Ah, finally. Wasn’t that easy?

No more tapes, CDs, or LimeWi - I mean legally buying new songs on iTunes.

For a small fee each month, you can easily listen to almost any song in the world using music streaming services.

But this convenience also means no more lines at HMV (RIP) and no more album sales with the phasing out of CDs and records.

Which begs the question:

How do our favourite artists actually make money off streaming?

Music artists now earn money through streams. Well, sort of.

And not the kind of streams Kenny Rogers and Dolly Parton were thinking of in Islands in the Stream.

Streams as in hitting Play on a song on your favourite music service, which then causes a digital reproduction of the song. More commonly known as a mechanical royalty.¹

Did you know digital music streaming represents more than 50% of global recorded music revenue?² Spotify is also the largest contributor to that revenue.

Sidenote: At oxio, most of us admittedly opt for Spotify. But full transparency, our Marketing Director is probably the only person we know who uses YouTube Premium. You didn’t hear that from us. Whatever your choice, which we won’t judge, these music service platforms do in fact pay artists per stream.

But…

Artists don’t receive direct payment. The rightsholder receives payment.

Well, it’s pretty much who the artist has a contract with. Typically a record holder or distributor.³

They receive a streamshare from the music service. Streamshare measures the frequency of streaming for music owned or controlled by a specific rightsholder. You calculate it by dividing the number of streams of that music by the total number of streams in the market.⁴

It goes something like this:

The rightsholders receive this payment that comes from a distributed amount of net revenue from Premium subscriptions and ads. Artists' earnings on Spotify can vary for several reasons. These reasons include streaming methods, agreements with labels or distributors, or even their association with a music group.⁵

As some can guess, these types of relationships don’t always go so well. Music managers often make a significant amount of money by selling music catalogs to investment firms. Unfortunately, in these transactions, the artists do not always receive a fair share of the profits.

Well, here's the juicy bit and how music listeners play a significant role.

These services pay the following amounts to rightsholders per stream, according to estimates.⁶

Although the initial number may seem small, popular artists will have their music on many streaming platforms.

Apple Music pays 1 cent per stream. So, if there are 100,000 streams, the rightsholder earns about $1000.⁷ That's just from one music platform.

In 2022, pop music icon Taylor Swift had over 28 billion streams. As a result she, er, her rightsholders earned over $70 million from us tapping play.⁸ Yes Romeo, take me somewhere we could be alone.

In case you were curious…

For an up-to-date list of the top 10 earning artists, you can view it here.

*Just keep in mind the artist won’t earn this full amount. Part of the earnings will go to their label/manager too depending on their contracts.

Regardless of your taste in music or your taste in music streaming platforms, ahem, even Youtube Music, we’re part of a new era where simply pressing Play and enjoying our favourite songs at leisure equals more bread on the table for our favourite artists. Albeit, a very large loaf of bread in some cases… which, as we now know, is then broken up into smaller pieces and divided by the rightsholder.

Thanks to Suzanne, Savannah, and Danilo for their feedback and mutual love of Tswift music. And thank you Julien for the excellent FR adaptation!