You release a song.
It goes live on Spotify, Apple Music, YouTube Music and everywhere else.
People start streaming it.
Then you check your distributor account waiting for the money to show up.
But where is that money actually coming from? Who pays who? Why do people talk about DistroKid, ASCAP, BMI, The MLC and SoundExchange like they're all paying you for the same song?
This is one of those parts of the music business that confused the hell out of me when I first started learning it because people make it sound way more complicated than it needs to be.
So I'm going to explain it the way I would've wanted somebody to explain it to me.
And I'm going to use a situation that's probably familiar to a lot of independent artists:
You find a beat on YouTube, lease it, record a song over it and release it yourself.
By the end, you should understand where the money from that song can actually go.
First: A Song Has Two Different Sides
This is the biggest thing you need to understand before anything else.
When you hear a finished song on Spotify, you're really dealing with two separate copyrights.
1. The Master Recording
The master is the actual recording you're listening to.
Your vocals.
The beat.
The mix.
The master.
The finished WAV file that eventually gets uploaded to your distributor.
If I record a song and own that finished recording, I have ownership on the master side according to whatever agreements I have with the other people involved.
2. The Composition
Then there's the actual song underneath that recording.
The lyrics.
Melody.
Musical composition.
That's the songwriting/publishing side.
These two sides can generate different royalties.
Spotify itself separates its music royalties into recording royalties and publishing royalties. Recording royalties go to recording rightsholders through the label or distributor that delivered the music, while publishing royalties are owed to the songwriters/owners of the composition and flow through publishers, collection societies and mechanical agencies depending on the territory. (Spotify)
That distinction explains a LOT of what comes next.
Let's Say I Find a Beat on YouTube
Here's our example.
I'm scrolling through YouTube looking for beats and find something like:
[FREE] Future x Lil Baby Type Beat 2026 — "Pressure"
I start writing to it.
I like what I come up with enough that I want to actually release the song.
The first thing I'm doing is finding out how to license the beat.
Maybe the description sends me to BeatStars.
Maybe the producer has their own website.
Maybe they tell me to email them.
Let's say I go to their store and buy a:
$50 WAV Lease
Now I've got permission to commercially release music using that beat according to the terms of that license.
That last part matters.
Leasing a Beat Doesn't Usually Mean You Bought the Beat
This is where artists can get themselves confused.
I paid $50.
That doesn't automatically mean:
"This beat belongs to me now."
I bought a license to use it.
The producer may still own the underlying instrumental and whatever other rights are spelled out in the agreement.
My lease might give me permission to:
release the finished song commercially,
put it on Spotify and Apple Music,
make a music video,
perform it,
sell downloads,
and generate streams.
But it could also contain conditions involving:
stream limits,
sales limits,
publishing splits,
producer credit,
Content ID,
music videos,
sync licensing,
or other uses.
Every agreement can be different.
So don't just buy a beat and never look at the PDF that comes with it.
Read your license.
Now I Make the Song
Let's say I take that beat into FL Studio.
I record my vocals.
I mix everything.
I master it.
Now I've got my finished record:
"Pressure."
Let's keep the example simple and say my agreement gives me the applicable rights to commercially release my finished recording.
It also says the composition is split:
Me — 50%
Producer — 50%
Those aren't universal beat-lease terms. I'm just using them for this example.
Your actual agreement is what matters.
Now I'm ready to release.
This Is Where My Distributor Comes In
I can't just drag my WAV file directly into Spotify for Artists and release it.
Independent artists normally use a music distributor.
That could be:
DistroKid
TuneCore
CD Baby
UnitedMasters
or another distributor.
I upload "Pressure" to my distributor along with my:
artist name,
song title,
cover art,
audio,
songwriter information,
release date,
and other metadata.
The distributor delivers it to Spotify, Apple Music, YouTube Music, Amazon Music and the other platforms I've selected.
Now someone finds "Pressure" on Spotify.
They press play.
This is where we're going to follow the money.
Spotify Doesn't Just Send Me Money
This is probably the easiest misconception to clear up.
I'm an independent artist.
Spotify generally isn't sending the recording royalties directly into my bank account.
Remember who delivered my music?
My distributor.
Spotify says recording royalties are paid to rightsholders through the licensor that delivered the music—typically a record label or distributor. (Spotify)
So in my example, the simplified recording side looks like this:
LISTENER
↓
SPOTIFY
↓
MY DISTRIBUTOR
↓
ME / MASTER RIGHTSHOLDER
If I used DistroKid:
Spotify → DistroKid → Me
If I used TuneCore:
Spotify → TuneCore → Me
Same basic idea with Apple Music:
Apple Music → Distributor → Me
That's why you eventually see streaming earnings inside your distributor dashboard.
Spotify Doesn't Have One Guaranteed "Pay Per Stream" Rate
You've probably seen numbers like:
Spotify pays $0.003 per stream.
Those kinds of numbers can be useful for rough estimates.
But don't think Spotify literally has a button somewhere that says:
1 stream = $0.003
for every song, every listener and every country.
Spotify doesn't use one universal fixed per-stream rate.
Its royalty system accounts for eligible listening and distributes recording and publishing royalties to the applicable rightsholders.
So when we eventually do the math on:
1,000 streams,
10,000 streams,
100,000 streams,
or 1 million streams,
we're talking about estimates, not a guaranteed rate.
But Here's Where Artists Miss Money
Let's go back to my song.
I open my distributor dashboard.
I see money from Spotify.
Then Apple Music.
Then YouTube Music.
I might think:
"Cool. I'm getting all my royalties."
Not necessarily.
Because we've only been following one side.
The master.
Remember the other side?
The composition.
And that's where things get more interesting.
Go Back to That YouTube Beat
Remember our example split?
Me — 50%
Producer — 50%
Again, that's just an example.
The actual agreement controls.
I wrote my lyrics and vocal melody.
The producer created the instrumental.
Our agreement establishes our respective ownership.
Now the composition itself can generate publishing royalties when the song is streamed.
And those royalties don't necessarily travel through the exact same pipeline as my master royalties.
So the same song can have:
MASTER MONEY
and
PUBLISHING MONEY.
That's the concept I wish somebody would've drilled into my head early.
Where ASCAP and BMI Come In
This is probably where you've heard:
ASCAP
and:
BMI.
They're Performing Rights Organizations—PROs.
They help songwriters and publishers collect eligible performance royalties generated by the compositions they represent.
That's the songwriting side.
So now our royalty map is starting to expand.
My distributor is involved with the recording/master side.
My PRO is involved with applicable performance royalties on my songwriting/publishing side.
They're not doing the exact same job.
Then There's The MLC
Now we've got another type of publishing royalty:
mechanical royalties.
Interactive streaming services can generate digital mechanical royalties for compositions.
In the United States, The Mechanical Licensing Collective (The MLC) administers the blanket mechanical license for eligible digital streaming and download services.
DSPs send usage data and royalties to The MLC, The MLC matches that usage to registered compositions and then pays the appropriate members/rightsholders. (Mechanical Licensing Collective)
And here's another thing worth understanding:
There isn't one simple fixed mechanical rate for an interactive stream either.
The MLC explains that streaming mechanical royalties use formulas involving factors such as DSP revenue, subscribers, sound-recording payments and performance royalties. (The MLC Help)
You don't need to memorize the formula.
You need to understand what money The MLC is collecting and whether somebody is already collecting it for you.
Now Our YouTube Beat Example Makes More Sense
Let's put everything together.
I found a beat on YouTube.
↓
I bought the proper license.
↓
I wrote and recorded "Pressure."
↓
My producer and I have an agreed publishing split.
↓
I release the finished recording through my distributor.
↓
People start streaming it on Spotify.
Now we've potentially got two different paths.
RECORDING / MASTER SIDE
Spotify
↓
Distributor
↓
Master Rightsholder
And separately:
SONGWRITING / PUBLISHING SIDE
Spotify
↓
Publishing Royalty System
↓
PRO / Mechanical Collection / Publisher / Administrator
↓
Songwriters & Publishers
Same song.
Same stream.
Different rights. Different royalty systems.
Once I understood that, royalties became a lot easier to understand.
What If I Just Rip the Beat From YouTube?
Don't.
Let's say instead of buying the $50 license, I download the YouTube audio, record over it and release the song.
My distributor accepts the upload.
Does that mean I'm good?
No.
Getting a song through a distributor doesn't magically give me rights to music I didn't own or license.
The producer still has whatever copyright rights they hold.
If they discover my unauthorized use, I could potentially face copyright claims, disputes, takedowns or other consequences depending on the situation.
And imagine the song unexpectedly blows up.
Now I've built my biggest record on a beat I never actually got permission to use.
That's a terrible time to start figuring out ownership.
If you're serious enough about a song to release it commercially:
license the beat.
Save the receipt.
Save the agreement.
Save the producer's contact information.
"Free for Non-Profit" Isn't the Same as a Commercial License
This gets artists too.
A YouTube title might say:
[FREE] Drake Type Beat
That does NOT automatically mean:
"Do whatever you want with this beat forever."
Read the description.
"Free" might only mean you're allowed to use it for certain non-commercial purposes.
Commercial distribution to Spotify and Apple Music may require purchasing a license.
Don't base your music business on the word FREE in a YouTube title.
Read the producer's actual terms.
What If I Buy the Exclusive Beat?
Another common misunderstanding:
Exclusive doesn't automatically mean I own 100% of everything.
An exclusive agreement may stop the producer from selling new licenses to other artists.
But that doesn't automatically tell you:
who owns the publishing,
who owns the master,
whether previous licenses remain valid,
whether the producer gets royalties,
or what other rights they retained.
The agreement tells you that.
Not the word exclusive.
What If I Made the Beat Myself?
Now let's change the example.
I made the beat.
I wrote the lyrics.
I wrote the melody.
I performed everything.
I recorded everything.
And I own the master.
Assuming no samples, collaborators or other agreements affect ownership, I could potentially own:
100% of the master
and:
100% of the composition.
Now I'm wearing multiple hats.
I'm the:
Artist
Songwriter
Producer
Master Owner
That's where being able to do more yourself can become powerful.
It doesn't mean the money automatically finds you.
You still need to make sure your rights are properly registered and administered.
But you're potentially controlling more of the pie.
What If I'm Working Directly With a Producer?
Maybe you don't lease beats online at all.
You and a producer sit in the studio and create a record together.
Great.
Have the ownership conversation.
Before the song blows up.
Not after.
Talk about:
songwriting splits,
publishing,
master ownership,
producer fees,
producer royalties/points,
credits,
and anything else relevant to the agreement.
Get it documented.
Because everybody remembers the conversation one way when the song has 800 streams.
People suddenly remember things differently when it has 8 million.
How Apple Music Fits Into This
Apple Music works under the same basic copyright reality.
There is still:
the sound recording
and:
the composition.
So for an independent artist using a distributor, the simplified recording path is still:
Apple Music
↓
Distributor
↓
Master Rightsholder
And publishing royalties associated with the composition are handled through the applicable publishing/licensing systems.
The exact royalty calculations aren't necessarily identical across Spotify, Apple Music and every other DSP.
But your song doesn't stop having separate recording and composition rights because somebody listened on Apple instead of Spotify.
What About YouTube Music?
YouTube can get a little more complicated because music can show up all over the platform.
Your song might exist as:
an official music video,
an Art Track,
a YouTube Music stream,
a lyric video,
a Short,
or inside somebody else's video.
YouTube also has Content ID.
When participating rightsholders provide reference material, YouTube can scan uploaded videos against that database. When it finds a match, a claim can be created and the rightsholder can apply the appropriate policy to that use. (Google Help)
That's another reason our beat lease matters.
Some non-exclusive beat licenses have specific rules about Content ID.
Think about why.
The producer could have licensed the same instrumental to 20 artists.
If every artist tries to claim exclusive ownership of that same underlying beat through Content ID, things get messy quickly.
So before putting a leased-beat song into Content ID:
check your license.
Where SoundExchange Fits In
Here's another one I used to see people mix up with Spotify royalties.
SoundExchange isn't just another version of ASCAP or DistroKid.
It handles a different right.
In the U.S., SoundExchange collects statutory digital performance royalties for certain non-interactive digital uses of sound recordings.
Think:
SiriusXM,
certain Pandora uses,
internet radio,
webcasters,
and similar eligible services.
These are generally services where the experience works more like radio rather than you selecting the exact recording on demand. (SoundExchange)
SoundExchange distributes those royalties:
45% to featured artists
50% to the sound-recording rights owner
and:
5% to funds for non-featured performers. (SoundExchange)
If you're both the featured artist and the owner of your master, you can see why understanding SoundExchange matters.
And this is separate from your songwriting royalties.
One Song Can Have Money Coming From Multiple Places
This is the part I really want independent artists to understand.
Let's say "Pressure" starts doing numbers.
Depending on where and how it's being used, there could potentially be money coming through:
My Distributor
For applicable recording/master royalties from services such as Spotify, Apple Music and other DSPs.
My PRO
For applicable performance royalties generated by my share of the composition.
The MLC / My Publishing Administrator
For applicable U.S. digital mechanical royalties generated by my share of the composition.
SoundExchange
For eligible non-interactive U.S. digital performances of the sound recording.
YouTube Rights Management
For eligible uses being monetized through the appropriate YouTube rights-management setup.
And remember:
I leased the beat in our example.
So the producer may also be entitled to their share of the money according to our agreement.
That's why:
"My song generated $5,000."
doesn't automatically mean:
"I get $5,000."
Ownership matters.
Your Distributor Isn't Necessarily Your Entire Royalty Setup
This is probably the biggest takeaway from this whole article.
If I open DistroKid and see $300...
I shouldn't automatically assume:
"That's every dollar my music generated everywhere."
My distributor is an important piece of my business.
But it's one piece.
There can also be publishing royalties and other eligible digital-performance royalties depending on how my music is being used and which rights I own.
This is why learning the business side matters.
Does DistroKid Pay More Per Spotify Stream Than TuneCore?
Not really in the way people usually ask this question.
Spotify doesn't see that I use DistroKid and decide my stream is worth more.
Your distributor matters because of things like:
fees,
commissions,
plans,
withdrawal rules,
optional features,
Content ID,
publishing services,
and other terms.
That's different from saying:
"DistroKid makes Spotify pay me more per stream."
If you're deciding between the two, I've already broken down the actual differences in our DistroKid vs TuneCore guide.
That's a separate decision from understanding how streaming royalties themselves work.
How Long Does It Take to Get Paid?
Another thing I learned quickly:
Spotify for Artists numbers and distributor money don't move at the same speed.
You could see thousands of streams in your analytics and then open your distributor account wondering:
Where the hell is the money?
Streaming royalties aren't reported in real time.
DSPs have reporting/accounting periods.
Then the information and money have to move through the applicable rightsholder, distributor, publisher or collection system.
Publishing royalties can take even longer to work through the system.
So:
Stream today ≠ money tomorrow.
That's normal.
How I Would Keep a Leased Beat Organized
If you're regularly finding beats on YouTube and licensing them, don't have licenses scattered across emails and random Downloads folders.
I'd make a folder for every released song.
Something like:
PRESSURE
Inside:
Final Master.wav
Instrumental.wav
Beat License.pdf
Beat Receipt.pdf
Producer Info.txt
Cover Art.png
Split Sheet.pdf
ISRC / Release Info.txt
That might seem like overkill when you've got 500 monthly listeners.
It won't feel like overkill if the record takes off three years later and you need to prove what you actually agreed to.
Treat your music like something that could become valuable.
What Should an Independent Artist Actually Have Set Up?
Don't read this article and immediately make accounts with 17 different companies.
Understand what each piece does first.
At minimum, I'd want to understand these seven things:
1. My Distributor
Who's delivering my master and paying me the recording royalties they receive for it?
2. My PRO
Who's handling applicable performance royalties on my songwriting side?
3. My Mechanical Royalties
Who's collecting the eligible mechanical royalties generated by my compositions?
4. SoundExchange
Do I have eligible U.S. non-interactive digital performance royalties from my recordings?
5. My Beat Licenses
Do I actually have permission to commercially release every beat I'm using?
6. My Splits
Who owns what percentage of the composition?
7. My Masters
Who actually owns the finished recording?
If I can answer all seven of those, I'm already in a much better position than blindly uploading songs and hoping every dollar somehow finds me.
Here's the Whole Thing in Plain English
Let's go back to our original example one last time.
I find a beat on YouTube.
↓
I buy the proper license.
↓
I read the license and understand what I can do with it.
↓
I write and record my song.
↓
The producer and I have clear ownership/splits.
↓
I upload the finished master through my distributor.
↓
The distributor delivers it to Spotify, Apple Music, YouTube Music and other DSPs.
↓
People stream it.
↓
The recording/master side generates royalties for the applicable recording rightsholders.
↓
The composition/publishing side generates separate royalties for the applicable songwriters/publishers.
↓
Other types of digital use may create additional royalties through systems such as SoundExchange or YouTube rights management.
↓
Everybody gets whatever they're entitled to based on the rights they own and the agreements they signed.
That's the system.
Obviously there are deeper layers once you get into labels, publishing deals, international collection, samples, sync, producer agreements and everything else.
But if you're an independent artist releasing your own music, understanding this foundation gets you a long way.
The Bottom Line
Getting a song onto Spotify is easy now.
Understanding what happens after somebody presses play is where a lot of artists get lost.
I don't think every artist needs to become a music-business lawyer.
But if you're serious about releasing music, you should understand:
what you own,
what you licensed,
who owns the composition,
who owns the master,
and:
who is collecting the money generated by each one.
Especially if you're leasing beats from producers online.
Don't just rip something from YouTube because the title says "FREE," record a song, upload it and hope everything works itself out.
Get the license.
Read it.
Know your splits.
Keep your paperwork.
Register your music properly.
Then when the streams start coming in, you'll actually understand where the money is supposed to go.
Because the goal isn't just to get streams.
The goal is to own what you can, understand what you don't own, and actually collect the money your music earns.
Built4Music — The Work Behind the Music.