Spoiler: The one who shared the track and built the hype that made it a hit? Never. That, I can guarantee

There was a time when music lived on vinyl. You bought a record, dropped the needle, listened. That was it. The artist got paid, the record store took its cut, and everyone was happy. Especially, and above all, our friends at the Majors.

Then came CDs. Then iTunes. You paid 99 cents for a song and the file was yours. Still a clear model: you sell, you earn. Every listen was a sale. Every sale, a royalty.

Then came the Napster moment, and that’s when everything really changed. Napster turned music into a copyable file. Liquid. Priceless. It made music intangible. The majors? Caught off guard, losing control overnight.

And instead of reacting, they curled up and played defense. Huge mistake. Because while they fought over CDs and began the layoffs, someone else, outside the industry, saw exactly where we were heading.

That someone was Spotify. Spotify showed up to “save” the system, and in part it did. It made music legal, accessible, convenient. But also two things at once: infinitely monetizable and infinitely fragmented.

Today, a track isn’t bought, it’s streamed. Listened to once, ten times, a hundred, a thousand. Each time it generates a micro-payout. On average, between $0.003 and $0.005 per stream. Music no longer feels like a product. It’s a flow.

Ok, now that we’ve covered a bit of history, the foundation is set.

Let’s take Hallelujah by Leonard Cohen. One of the most reinterpreted songs ever: Jeff Buckley, Rufus Wainwright, k.d. lang, even Shrek. And if I wanted to, I could record it too. Maybe it would be just a little less famous, but legally, I can.

Why?Because in music, there are two major types of rights:

Publishing rights → lyrics + melody

Cohen wrote the song. Whoever holds the copyright of the composition gets paid every time the track is:

These payments are collected by the so-called PROs (Performing Rights Organizations): SIAE, ASCAP, BMI, PRS, SACEM, and distributed to the publishing rights holders, meaning the authors and/or their publishers.

But where does that money come from?

From radios, venues, TV networks, festivals, and streaming platforms. Every time your song is played or performed publicly, someone pays. And the PROs are responsible for collecting and distributing that money to those who wrote the music.

Master rights → the audio recording

Every time someone records a new version of Hallelujah, that specific recording becomes a new master. And that master has its owners: sometimes it’s the label, sometimes the artist, sometimes the producer, or all of them in varying percentages.

If you listen to Buckley’s Hallelujah on Spotify, whoever owns that master gets paid. If the label owns 100%, it gets it all. If Buckley had a better deal, he gets a share too. If I record it myself, the master is mine. Every stream generates a payout for me, as long as I’ve uploaded the track to a DSP.

So: every time you stream a song, at least two parties get paid. The one who owns the master (recording) and the one who owns the publishing (composition).

But hold up a second.

We’ve talked about who gets paid. But where does the money in music really come from? Who pays what? What are the channels that turn a listen into revenue?

Because Spotify isn’t the only source of income. It’s just the most visible, or the most talked about. But around it, there are other streams, and other rules.

Here are the main ways music is monetized in the industry.

1. Streaming (Spotify, Apple Music, YouTube):

DSPs pay per stream, but not directly to the artist. They pay the master rights holder (roughly 80%) and the PROs (SIAE, ASCAP, etc.) for publishing. Deals are based on a pro-rata model: a fixed share of revenue (e.g. 70%) is divided based on listening share.

2. Downloads and physical (yes, still around):

Revenue per copy sold. The master owner gets a cut of the wholesale price. The author collects mechanical royalties, usually fixed by law.

3. Sync (films, ads, series):

One of the few places where artists earn real money. Using a song in an ad or movie requires two licenses: one for the master, one for the publishing. Payouts can range from €500 to €500,000. And if your name isn’t in the credits... good luck.

4. Performance rights (radio, venues, festivals):

Every time a song is played in public, someone pays. The money goes to the PROs, who redistribute it (more or less accurately) to authors and publishers.

5. UGC platforms (TikTok, Instagram, Reels):

This is where it gets blurry. In theory, there are global licenses between platforms and major labels. In practice, if you’re independent, seeing any money is a miracle. Yet those are the videos that make tracks explode. Something doesn’t add up.

Spotify collects monthly revenue from subscriptions and ads. Keeps around 30%, and the rest goes to master rights holders, in proportion to streams.

Let’s break it down step by step:

But be careful: even if you’re entitled to 10%, that doesn’t mean all of it goes to you.

It depends on your contract. On average, a signed artist receives between 10% and 20% of what the label collects. So if your track generates €1,000, and your royalty rate is 15%, your “theoretical” payout is €150.

Theoretical, exactly. Because if you haven’t recouped… you don’t see a cent.

Recoupment is a standard clause in label contracts. If you sign, you agree that any advance you get must be repaid using your streaming royalties.

It’s not a gift. It’s a loan.

Did you get a €20,000 advance? Until your song generates €20,000 in net revenue for the label, you don’t get paid. And it’s not just the advance: studio, video, stylist, TikTok promo, everything can become recoupable. Every euro you earn gets used to cover those costs. Only once it’s all paid off do they start sending you your cut. You can hit 5 million streams and still be in the red.

Let’s simplify it:

1 million streams on Spotify generates about $4,000 gross.

If your label keeps it all and your royalty rate is 15%, your share is $600.

But if you still owe the label money, those $600 are gone.

The track plays. The payment doesn’t.

Let’s try an example: imagine a film.

You wrote a killer script. You pitch it to a production company. They say, “Here’s €50,000 to make it. Then we’ll see.” The film drops. It works. Festivals, press, buzz.

Then the producer tells you, “Cool. But now we recoup: location, crew, promo, PR… all of it first. Once we get that back, we’ll pay you.” Maybe they never recoup. Or maybe they do, but you’ll never really know. Because the numbers are in their hands, and transparency hasn’t exactly been the industry’s strong suit.

Moral of the story? You wrote the script. Directed the project. Built the audience.

And still, you’re the last to get paid. Welcome to the music business.

To be clear, if you don’t sign with a label and release on your own, recoupment doesn’t exist. You upload, you earn. It all depends on the kind of freedom you want. But one thing is certain: historically, it’s been an uphill climb.

They share, recommend, hype, bring streams. Often, they’re the first to believe in the track, before anyone else.

If you like something, you post it in your story. If it represents you, you put it in a reel. If you love it, you tell people about it. And when you do, someone clicks. And when someone clicks…they land on Spotify, and that’s where value is created.

You’ve triggered a listen, generated a micro-payout, pushed a song into someone’s feed, into the algorithm, into the world. A referral system that’s insanely powerful, but totally unpaid.

Even though that click, on average, is worth €0.004. It may seem small, but multiply it by ten, a hundred, a thousand.

How much is your share really worth? In the current monetization system, though, the value goes only to those who hold the rights.

So no recognition. No share. No piece. Just likes and views. Invisible.

And so I ask you: if you’re the one making music move, isn’t it time someone put you in the equation?

You already know my answer.

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