How to make money off music streams. That's a great question. You’re probably wondering how a simple stream online can generate money, but it’s easier than you might think.
Large music streaming platforms rely on subscriptions, ads, partners, and stakeholders to drive revenue. When someone plays your music on one of these services, the revenue share is shared between labels and distributors. Those then pay the artists according to their agreement.
But not all streaming services are alike. Some pay more, others pay less – but some are more popular, which can factor into your number of streams and generated revenue.
Let’s dive in with how you can make money off music streams. But first, we need to explain how you can get your music on platforms like Spotify.
Best Distribution Services
To get your music on a streaming platform, you have two options. The first is to get signed by a label, who will handle your contracts, agreements, distribution, and payments. The second and popular method is using a music distribution service.
A music distribution service takes care of everything for you. Upload your music to the service, pay a small fee, and the company will handle payments, contracts, and uploading to streaming platforms for you.
Spotify recommend these artist distributors:
So, which one is the best distribution service? It depends on your upload frequency and what your goals are. But Distrokid is a very popular choice by independent electronic music artists around the world.
How To Get More Streams On Spotify
Getting more streams on Spotify is all about marketing and doing the right things. To increase exposure and get more streams, you can do several things.
The first and most obvious one is claiming your artist profile. With a music distribution service, it's already done for you. You can also create and market your own playlists with your music and drive listeners to them.
We have listed a total of 10 tips on how to get more streams on Spotify in a recent article. Read it here.
Popular Streaming Services
Today, almost everything is online. We watch series on Netflix, play multiplayer games, and even take online music courses. We also listen to music on the internet – most commonly through streaming services like Spotify and Apple Music.
Not surprisingly, one of the most popular ways how to make money off music online is through music streaming services.
But not all platforms are alike. Some give you more money per stream, but you must also factor in its popularity as a total number of plays can equal big bucks.
Let’s go through the most popular platforms to see how much money you can earn.
Spotify needs no long introduction. The popular global streaming service lets you search for virtually any music worldwide, which you can listen to without interruptions for a small price each month.
Some larger artists stopped releasing music on Spotify due to their more restrictive royalty program.
How much can you earn from Spotify?
According to Business Insider, the average payout rates are $0.0033 up to $0.0054 per stream. According to them, you need about 250 streams to earn a dollar. And for every million streams, that means you can earn upwards of $5400.
The rate seems to change, though. Not only yearly but also between countries. It also seems that the rate is higher for plays from Spotify premium users.
However, Spotify says something different...
Spotify states that they don’t pay artist royalties on a per-play or per-stream rate. Instead, they calculate the total number of streams each month and determine “what proportion of those streams were people listening to music owned or controlled by a particular rightsholder.”
In other words, how much you get paid depends on several factors, including how people stream your music and agreements with labels or distributors.
And that’s a fact of most streaming services – it’s not up to the streaming services themselves but rather the label and distributors. If the rate is low, it’s usually because the label or distributor gets a bigger cut.
How often do you get paid from Spotify?
To release music on Spotify, you need to work with a record label or other distributor. How often you get paid is determined by the individual agreement you have with them.
How do you get paid from Spotify?
Spotify is not involved in the agreements labels and distributors have with artists. Therefore, your payment method is something you set with who you release music through.
SoundCloud lets you monetize your music after joining Premier. If you currently have a free account with millions of plays, monetization only starts for the streams you get after signing a Premier contract.
How much can you earn from SoundCloud?
SoundCloud doesn’t disclose how much you can earn on their website. They say that the amount will vary each month depending on how many streams you have generated. They also tell you to check your agreement for more details.
A quick Google search states you earn around $2.50-4.00 for every thousand plays, but I can’t verify the truth.
The streams must come from at least one of these eligible countries:
How often do you get paid from SoundCloud?
SoundCloud states you get your first payment within 45 days after the end of the reporting period, typically the end of the month after you start monetizing.
How do you get paid from SoundCloud?
SoundCloud pays your money earned through monetization through PayPal.
Bandcamp is a music distribution platform where independent artists and labels can upload music and sell music and merchandise. During the COVID-19 pandemic, they have generously waived their revenue share to donate it back to the artists.
Many artists like Bandcamp because it's free and for its generous terms.
How much can you earn from Bandcamp?
The beauty of Bandcamp is that the label or artist can set their own pricing. If you want, you can price your tracks $500 each (the question is if someone will buy them.)
For every sale of digital items, Bandcamp collects a 10-15% revenue share along with payment processor fees. Payment is made to you 24-48 hours later.
Higher-ticket sales, like the previous example of the $500 track, are manually reviewed and may take up to two weeks.
Merchandise is paid directly from the buyer to your PayPal account.
How often do you get paid from Bandcamp?
All payments go directly to you after the above specified times, 24-48 hours or two weeks, depending on item and price.
How do you get paid from Bandcamp?
Bandcamp pays your PayPal account.
Apple Music is an on-demand music and video streaming service launched in 2015 as a competitor to the popular Spotify platform. Last year, the number of paying users exceeded 70 million.
How much can you earn from Apple Music?
The royalty rate from Apple Music is competitive. According to Rolling Stone, Apple recently announced a per-stream average of $0.01 – more than double the rate of competitors.
With that average rate, an artist makes $2.5 for every 250 streams and ten thousand dollars for every million. Not too shabby from Apple Music.
How often do you get paid from Apple Music?
According to Apple, payment is made no later than thirty (30) days following the end of each monthly period. But make sure you have provided all necessary bank and tax information.
Depending on your region and currency, you get a minimum threshold you must reach to get your money transferred. For most countries, it’s $10. For others, it can be as much as $150. Check the link above to see what applies to your country.
How do you get paid from Apple Music?
All payments from Apple Music are made through electronic funds transfer.
Now you know a little better how to make money from your music. Earning a lot of money from music streams alone is tough. Even from Apple’s generous average of $0,01 per stream, you still want half a million plays a month to generate a decent income.
That’s why many artists don’t rely solely on music streams. But, when you also play live gigs, sell merchandise, and sample packs and teach, that's often when the numbers go up.
There are many ways an artist can make money on their music. In the next articles, we will talk you through several other ways you can make money from your music.
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About the author
Pelle Sundin is a Swedish music producer and writer, active with his chillout project PLMTRZ. He also produces psytrance. When he's not producing, he surfs, skates, and chugs coffee.