Correct payment for artists
There are plenty of moving parts when it comes to making music, and it's crucial that everyone gets the right share.
Soundtrack licenses music directly from record labels and publishers. Users play that music directly into their hotels, cafés, stores and gyms. There's a clear flow of where the money goes, the whole way down the chain. Let's see what happens when a business presses play.
Who are music creators, exactly?
A song might sound like one person's work. It almost never is.
There's the songwriter, who wrote the melody and the lyrics. Sometimes that's one person with a guitar; often it's more like three or four people in a room trading lines. Then there's the recording artist who performs the song and tends to be the face of the whole operation. They might also be one of the writers (or not).
You've also got the producer who shapes how the whole track actually sounds. They transform the song from a rough cut or demo to the polished version you can't get out of your head. You'll also have session musicians who play the various musical instruments like a guitar, keyboard or ondes Martenot. Plus engineers who record, mix and master it until the song's ready to be blasted through your speakers.
Behind this crew, you reach the business layer. The publisher represents the writers and manages the rights to the composition of the song itself. The label owns the actual recording, which is the version you hear. A distributor gets that recording out to streaming platforms and stores.
Then there's the PRO (performing rights organization) that collects a fee every time a song is played in public, whether that's on radio or through the speakers in your business.
Feels somewhat familiar? You've almost got a small to medium business working behind every song that exists in the world today. A founder with an idea, specialists who make it real, partners who get it to market. A song works in a similar way.
So, when a song is played in your business, it's only right that the whole team behind it should get their cut.
Some contributors collect set fees for their work. Others earn a share of what the song makes. These music royalties are divided up depending on the deals that have been agreed and signed. Spoiler alert: there's no one-size-fits-all.
What is each song worth?
No major streaming service typically pays a fixed rate per stream. Instead, revenue goes into a royalty pool. Rightsholders are paid based on their share of total listening. If a track accounts for 1% of plays in a market, rightsholders receive 1% of that market's pool.
The pool itself is a moving target. It varies based on country, subscription prices, advertising revenue and how much music people actually play.
The per-stream figures you sometimes see quoted online are simply averages. Total payouts are divided by total streams, not a price that anyone set in advance.
Before a song's release, a lot of negotiations happen. The artist's split with their label, the songwriter's split with their publisher, the producer's cut from the recording, session fees, recoups on advances. The list isn't short. Each of those rates was agreed between different people, deal by deal.
Music for business has another layer of complexity since public performance fees usually relate to the size of the space. A small florist and a vast nightclub don't pay the same costs (and nor should they).
Frankly, a one-size-fits-all price per stream would be a huge oversimplification. What's more important is that each play is tracked accurately, that it's reported correctly and that each slice of the pie is respected so that the profits land in the right purse.
The bigger the room, the bigger the royalties
When your business plays a track, that play generates more money for rightsholders than a personal stream (as it should). The right song at the right moment transforms the feel of a room. Commercial listening equals commercial rates.
On Soundtrack's Unlimited plan, royalty payments run up to five times higher than personal streaming services. The rates are based on what's actually happening: many people listening, in a business with commercial intentions.
So, how does it work?
Your subscription plan funds the pool. Part of what your business pays goes toward music royalties at commercial rates, because a room full of customers is not the same as a single private listener.
Every play is tracked. Soundtrack's systems log each track, each play, each location. This is the behind-the-scenes part that everything else depends on. Without accurate data, no correct payments would be possible.
Royalties are reported and paid to rightsholders. Soundtrack reports the song usage and pays royalties to its music licensors: the labels, publishers, distributors and organizations it has direct license agreements with.
Rightsholders pay artists and songwriters. From there, the money moves to the creators who made the music, according to each artist's or songwriter's own agreement with their label, distributor and publisher.
Music: the most invisible invoice
Every good business pays its suppliers correctly, on time, at the agreed rate and without being chased. Music is a supplier, too, although perhaps a less visible one. Each song arrives as if by magic. There's no bulky delivery, no signature required. The right music supplier and licenses settle that invoice the same way you'd settle any other.
Play from a correctly licensed music-for-business service, tracked per play and priced for commercial listening instead of private. Rightsholders then have accurate data and commercial funds to work with when they pay music creators under their own agreements. It's just good business. Try Soundtrack free for 14 days.
