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Music Royalties Explained: Where Streaming Revenue Actually Comes From
31 Jul 2026

Music Royalties Explained: Where Streaming Revenue Actually Comes From

"How much does a stream pay?" is the wrong question — because a single stream can generate more than one type of royalty at once, paid to different people, through different systems, on different schedules.

Mechanical royalties

Paid to the songwriter/composer whenever the composition is reproduced — including on-demand streams. This is separate from whoever performed the recording.

Performance royalties

Paid to writers and publishers when a song is performed publicly — streaming counts, as does radio and live performance. In Azerbaijan, this is where an organisation like RAYS comes in, collecting and distributing royalties whenever a recording is broadcast or played publicly across the country.

Master recording royalties

Paid to whoever owns the sound recording itself — typically the artist or label — based on the platform's per-stream rate and the artist's share of total streams on that platform in that period.

Sync licensing fees

A flat, negotiated fee paid when a recording and its composition are licensed for use in a film, show, ad or game — usually the single highest-value use of a song, and one that depends entirely on the composition being properly registered in the first place.

Every one of these revenue streams depends on accurate registration and reporting somewhere upstream. That is the actual job of publishing and distribution — making sure none of it goes uncollected.

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