1. How Revenue Flows

In the music industry, money rarely moves directly from the listener to the creator. It follows two parallel tracks: the Master (Recording) track and the Composition (Song) track.

1. Streaming: Sound Recording Flow (The “Master” Side)

This is typically the fastest and most direct flow of income. It is based on the ownership of the audio file itself.

The Path: DSP (Spotify/Apple) → Distributor (Tiny House Music/ DistroKid) → Label or Artist

Key Detail: The DSP pays out a % of its total revenue to the Master owner. If you are signed to a label, the distributor pays the label, and the label pays you after deducting their share and "recouping" expenses.

2. Streaming: Composition Flow (The “Publishing” Side)

This path is significantly more complex because it involves multiple types of rights (Mechanical and Performance) often collected by different entities.

The Path: DSP → PROs / MRO / CMO (SOCAN, The MLC) → Publisher or Admin → Songwriter

Key Detail: About 12-15% of streaming revenue goes to the composition. This is split into Performance Royalties (sent to PROs) and Mechanical Royalties (sent to Mechanical societies like The MLC or CMRRA).

3. Radio Flow: Sound Recording & Neighboring Rights

When a song is played on the radio, the recording earns “Neighboring Rights” (except on US terrestrial radio).

The Path: Radio Station → Phonographic Societies (Re:Sound, PPL, SoundExchange) → Master Owner + Performer

The Split: This is a statutory “Equitable Remuneration” payment. Usually, 50% goes to the Label (Master Owner) and 50% is shared among the Artists and Session Musicians who played on the track.

4. Radio Flow: Composition & Publishing Rights

Every time a song is broadcast, it is considered a “Public Performance” of the underlying composition.

The Path: Radio Station → PROs (SOCAN, ASCAP, BMI) → Publisher / Pub Admin → Songwriter

Key Detail: Radio stations pay “blanket licenses” to PROs, which then use data logs to calculate how many times your specific song was played.

5. Live Flow: Composition & Public Performance

Even if you are the one performing your own songs, the venue must pay for the right to “perform” that composition in public.

The Path: Live Venue / Promoter → PROs (SOCAN, PRS) → Publisher / Pub Admin → Songwriter

The Pro-Tip: Many artists forget to “Setlist” their shows. If you don’t submit your setlist to your PRO after a concert, the venue’s license fee won’t find its way to you—it stays in the “Black Box.”

Summary Table: Who Collects What

Notice that the Master owner rarely makes money from Live performances (unless the artist is using a backing track and the label has a specific contract for it), whereas the Songwriter makes money in almost every scenario where music is heard.