Answers/Glossary/DSP (digital service provider)
Glossary · Technical
DSP (digital service provider)
A DSP, digital service provider, is a streaming service or download store that licenses and delivers music to consumers — Spotify, Apple Music, Amazon Music, YouTube Music, Tidal, Deezer. DSPs pay recording royalties to distributors and mechanical royalties to The MLC.
DSP is the industry's collective noun for the services that actually deliver music to listeners. In the United States, a DSP operating an interactive service is licensed on both copyright sides and pays into both.
On the recording side, the DSP pays out of its revenue pool to whoever controls the master, which for an independent artist means the money arrives through DistroKid, TuneCore or CD Baby. On the composition side, the DSP operates under the Section 115 blanket licence created by the Music Modernization Act, reports its US usage to The MLC, and pays the mechanical royalties there. The same play also generates a performance royalty on the composition, licensed by ASCAP, BMI, SESAC or GMR.
That is three payments from one stream, arriving through three separate organisations, on registrations you have to make separately. Understanding a DSP as a payer into multiple systems rather than as a single source of income is what makes royalty statements legible.
Interactivity is the distinction that decides which system applies. A DSP where the listener chooses the exact track is interactive, and its recording royalties come through your distributor. A non-interactive service — Pandora radio stations, SiriusXM, internet radio — pays the digital performance royalty on recordings through SoundExchange instead, and no distributor collects it.
The misunderstanding: assuming that being on a DSP means every royalty it generates is being collected. Delivery to Spotify handles the recording side and nothing else. The MLC registration and the PRO registration are yours to do, and a DSP will happily pay money into systems where nobody has claimed your work.
One stream, three payers, three registrations — that is the whole map. Artist's notes, not legal advice.
Related terms
- Music distributorA music distributor delivers recordings to streaming services and stores on an artist's behalf and collects the recording…
- Royalty poolA royalty pool is the total sum of money a streaming service sets aside for rights holders in a given market and month, before it…
- Pro-rata allocationPro-rata allocation is the method streaming services use to divide royalties: all revenue in a market and month is pooled, a…
- The MLC (Mechanical Licensing Collective)The MLC is the non-profit organisation designated under the Music Modernization Act to administer the United States blanket…
Definitions on this site describe the United States system. I am an artist who has been through this, not a lawyer.
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