How artists get paid per stream: the ins and outs of music streaming royalties

Over at the Soundtrack blog, we've covered in detail the various benefits of playing music in a business environment, whether that's in an office or a retail space. But how do music streaming royalties actually work, and why does it make for good business practice?

What happens when businesses play music publicly

In order to understand why businesses pay for music, it's important to understand the consequences of playing music without the right streaming license. Streaming platforms like Spotify, Apple Music and YouTube Music might have more than a billion users combined, but that doesn't make them compliant for use in a public setting. In fact, it's against their terms of service.

Photo: Tseinn Wong / Unsplash

Depending on your location, penalties can range from a few hundred dollars to hundreds of thousands. Many businesses have been forced to shut down permanently due to the legal consequences of using improperly licensed music.

Beyond potential fines and reputational damage, playing music legally in your business compensates the creators who made it. According to reports, public performance income (shops, hospitality, live, broadcast) in the UK alone generated over £122 million in 2025, representing roughly 40% of total collections for performing rights organizations. Those royalties can make up to 15-25% of a musician's income.

How music streaming actually works

Streaming feels simple. You press play, the music plays, vibes aplenty. Behind the scenes, it's anything but.

Most major platforms operate on a pro-rata model, where subscription fees and advertising revenue are pooled and then distributed based on the share of total streams.

That money is then split between multiple rights holders: recording artists, songwriters, publishers and record labels. A single stream sets off a chain of payments that's far more complex than most listeners realize.

Which is why questions like what are music royalties and who pays them, how do musicians get paid and how musicians earn beyond streaming rarely have straightforward answers. But for businesses, the important distinction is this: streaming for personal use and streaming in a business environment are not the same thing.

Who pays music royalties (and how)

When you listen to music at home, streaming platforms handle the royalties. You pay your subscription and they distribute the revenue.

But the moment music is played in a public setting — a shop, a café, a hotel, an office — it becomes a public performance. And at that point, the responsibility shifts.

Photo: Tommao Wang / Unsplash

Now the business, not the streaming platform, is responsible for ensuring that the appropriate licenses are in place and that musicians get paid. Because in this context, music becomes a branded asset and this is where many businesses run into trouble. Personal streaming services don't cover public performance rights, regardless of the subscription type.

The system itself is fragmented. Different rights, different territories, different organizations — all ensuring that songwriters, artists and rights holders are paid correctly. This is exactly where licensed streaming services like Soundtrack come in.

Instead of piloting multiple licenses, reporting usage and making payments to different organizations, Soundtrack handles the complexity for you. Negotiating with and paying multiple rights holders on your behalf and ensuring your business is fully covered.

So rather than asking who pays mechanical and performance royalties, the better question is: who's responsible in your context?

For businesses, the answer is clear — but it doesn't have to be complicated.

Spotify, Apple Music, YouTube and Tidal: comparing payouts

There's a lot of noise around streaming payouts. How much do artists make on Spotify, Apple Music or YouTube? And ultimately, which platform pays the most? The truth is, there's no fixed rate.

Payouts vary depending on geography, subscription type and the overall size of the revenue pool. A premium subscriber in one market may generate significantly more value than an ad-supported listener in another.

There's also a difference between independent artists and major label acts. Labels often negotiate deals at scale, while independent artists rely on distributors and aggregators, which can affect how revenue flows. And crucially, streaming income is rarely tied to one platform.

Artists typically earn from a combination of sources — Spotify, Apple Music, YouTube, Tidal and beyond — making the overall picture far more complex than any single per-stream number suggests.

For businesses, this complexity reinforces a simple point: music isn't free. It's part of a system designed to reward creators — and using it commercially means participating in that system properly.

Looking at the US market, streaming revenue isn't evenly distributed — it's shaped by three forces: scale, value and reach. Spotify leads in volume, Apple Music in per-stream value, and YouTube in sheer audience size.

The following is based on the latest data, albeit subject to region and subscription type:

The role of performing rights organizations

Performing rights organizations (PROs) like ASCAP in the United States or PRS for Music in the United Kingdom collect and distribute performance royalties to creators.

They issue blanket licenses that allow businesses to play music from vast catalogs legally, and they either track or estimate usage to ensure the right people are paid. It's a complex and some might say antiquated system, but an essential one.

If Apple Music, Spotify and the like are the front end of music consumption, ASCAP, BMI royalties and other PROs are the infrastructure that keeps it working once the sound leaves your headphones.

What this means for your business

All of this can feel abstract, but the implication is simple. If you're using music as part of your business — whether that's shaping atmosphere, influencing behavior or communicating your brand — you need to be using it correctly.

The challenge isn't understanding every detail of music licensing. The challenge is making sure your business is set up with licensed business music so you don't have to. 

With a library of more than 125 million songs and thousands of playlists, Soundtrack can help. 

• Fully licensed music for public performance

• Payments to rights holders taken care of

• Playlists built for different times, moods and spaces

• Tools like the AI Playlist Creator to match music to your brand

In other words, everything behind the scenes, so you can focus on running your business. Try Soundtrack free for 14 days.