Music streaming is now the dominant way fans listen to music across the globe. But for artists, music producers, and rights holders, understanding how streaming royalties are calculated and why they vary can be a confusing experience
What Are Streaming Royalties?
Streaming royalties are payments made to rights holders (artists, songwriters, producers, labels, and publishers) when a track is played on a streaming service.
There are two main types:
- Interactive Streaming Royalties: From platforms like Spotify, Apple Music, TIDAL – where users choose what to play.
- Non-Interactive Streaming Royalties: From services like Pandora (US) or digital radio (e.g. BBC Sounds), where content is streamed like radio and users don’t choose the specific track
In the UK, most streaming income is paid to the content provider of the music (i.e. record label if an artist is signed, or distribution service if releasing independently) , and then distributed to artists and rights holders based on play counts and agreements.
Additional royalties generated from streaming activity (i.e. publishing royalties, mechanical royalties) are collected by organisations like PRS for Music, PPL, and MCPS.
How Do Platforms Calculate Streaming Royalties in 2025?
Each platform uses slightly different royalty models, but most follow the pro-rata model, where there is a pool of revenue that is then split based on total streams. It is worth noting that this pool of revenue for royalty payments can fluctuate month-to-month, and so there is very rarely an exact value per stream for each platform.
Key factors that determine how much you earn:
- Platform revenue: The bigger the platform’s revenue, the more royalties there are to distribute.
- Market Share: when platforms split their pool of revenue, the % sent to each content provider to pay to artists, will be dependent on the market share the artist controls, i.e. a worldwide famous artist will receive a bigger % of the royalty pool due to their music generating a higher % of the over streams received in a given month.
- Subscription type: Premium streams are worth more than streams from listeners on a free/ad-supported account.
- Location of listener: Streams from the UK or US typically pay more than from countries with lower listener subscription costs.
- Label or distributor deal: artists may have intermediaries and agreed % splits in place with record labels and other parties.
- User-Centric Models (TIDAL, Deezer): A growing alternative model where your subscription fee goes only to the artists you listen to – but adoption is still limited in 2025.
- In app promotions: many platforms now provide promotion tools and services for artists to pay for and promote their music within the platform. Tools like Spotify Discovery Mode will suggest your music to more people through the algorithm (auto-play, radio discover weekly), however in return the royalties generated from streams coming from this promotion will be valued less than the streams generated from organic discovery.
- Artificial Streaming: if you generate streams that are flagged as being artificial / fraudulent (whether intentional or not) – platforms like Spotify will not pay royalties for these streams. However they may still appear on your Spotify for Artists account.
Non-Interactive Streaming Royalties Explained
In the UK, non-interactive royalties come from platforms like:
- BBC Sounds (when tracks are part of on-demand playlists)
- Internet Radio platforms
- In-store streaming systems (e.g. music played in shops and gyms)
These royalties are often collected and distributed by PPL and PRS, and paid to both performers and recording rights holders. The per-play value is generally higher due to blanket licensing deals, but fewer plays occur overall.
Royalties on Social media platforms
Meta and TikTok have confirmed that royalties are generated per video a song is featured on, rather than the amount of views each video containing the song gets.
Through the TikTok and Meta platform you will be able to see how many videos have been made that use your music.
Why Do Streaming Royalties Vary So Much?
Streaming royalties aren’t fixed. They change due to:
- Platform business models (ad revenue vs subscriptions)
- Market share and total plays
- Individual contracts (label cut, distributor share, etc.)
- Regional licensing and exchange rates
- Consumer behaviour (one user listening to 100 artists vs just 5)
- Streaming platform policies on in-app promotion or artificial streaming.
An artist with 100,000 streams on Apple Music may earn significantly more than the same count on YouTube Music despite the play count being identical.
Can You Maximise Streaming Royalties in 2025?
Yes – here are some practical tips:
- Prioritise high-paying platforms in your promotional campaigns (e.g. Apple Music, TIDAL).
- Focus on higher value markets (i.e. USA, UK) where per-stream value is higher.
- Consider user-centric platforms like Deezer or TIDAL for long-term fan loyalty.
- Use metadata and ISRCs properly so your plays are tracked and paid.
- Register with PRS, PPL, and MCPS to ensure you collect all types of royalties.
Streaming royalties in 2025 remain complex – but understanding how they’re calculated and what influences their value is key to building a sustainable income. Whether you’re an artist, manager, or independent label, staying informed helps you make smarter distribution and marketing decisions.
For UK artists, it’s more important than ever to register with the right collection societies, choose the right partners, and understand the economics behind every stream.