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Royalties

Where Does the Money From One Stream Actually Go?

By Boboy Watson·Last verified August 31, 2026·2,084 words·Royalties

Somebody presses play on your song one time. That single play does not create one payment. It creates four, and they go to four different places that do not communicate with each other.

This is the single most useful thing I learned in ten years of releasing music, and it took me most of those ten years to learn it. What follows is the United States system specifically — the number of pots and the names on them change once you leave it.

Where does the money from one stream go?

Read that column on the right again. The MLC is free. SoundExchange is free. BMI songwriter affiliation is free. The reason people do not collect this money is not cost. It is that nobody tells them the pots exist.

Why does one song split into two copyrights?

This is the concept everything else hangs on, so it is worth being precise.

When you make a song, you create two separate pieces of property:

• The composition — the song as an abstract work. The melody, the chords, the lyrics. If someone else covered your song tomorrow, this is the thing they would be covering, and it is the thing they would owe you for.
• The sound recording — usually called the master. The specific audio file that came out of your session. Your particular performance of the composition.

Both are protected under US copyright law. Both earn money. And critically, they earn through different channels collected by different organizations. DistroKid, TuneCore and CD Baby live entirely on the sound recording side. ASCAP, BMI and The MLC live entirely on the composition side. SoundExchange sits on the recording side but collects only from non-interactive digital radio.

If you have only ever uploaded to a distributor, you have registered one of your two copyrights.

Why are performance and mechanical royalties separate?

Within the composition side there is a second split, and it catches almost everyone.

A performance royalty is generated when a composition is publicly performed. In the streaming era that includes being streamed, alongside terrestrial radio play, live venues, and background music in a coffee shop. ASCAP, BMI, SESAC and GMR collect performance royalties in the United States.

A mechanical royalty is generated when a composition is reproduced. Historically that meant pressing a physical copy; today it includes every on-demand stream and every download. In the United States, The MLC collects mechanicals from on-demand services under the Section 115 blanket licence created by the Music Modernization Act.

Same song, same stream, two different royalties, two different organizations. ASCAP does not collect mechanicals. The MLC does not collect performance royalties. Registering with one does nothing for the other, and the Harry Fox Agency, which handled mechanicals for decades before The MLC existed, now sits mostly outside the streaming path for self-administered writers.

Which platforms generate which pots?

Not every platform triggers all four. The distinction that matters is interactive versus non-interactive — whether the listener chose the song or a service picked it for them.

That third row is the one that surprises people. The United States is an outlier among developed countries in not paying a sound recording performance royalty on AM/FM radio. If your song gets terrestrial airplay, the songwriter and publisher get paid and the recording artist does not.

What does SoundExchange collect that a distributor does not?

SoundExchange collects the digital performance royalty on the sound recording from non-interactive services — Pandora's radio tier, SiriusXM satellite radio, and webcasters. Registration is free; SoundExchange's own wording is that registering is free, simple and fast.

The structural feature worth knowing is that SoundExchange pays the featured artist directly, separately from the share paid to the owner of the sound recording. That is unusual. If a label owns your master, the label's share goes to the label and your artist share still comes to you — but only if you have a SoundExchange account. No distributor collects this, and it does not appear anywhere on a DistroKid or TuneCore statement.

Why do I only get half my performance royalties?

Inside pot 2 there is one more division, and this is where the most money quietly disappears.

Every performing rights organization splits performance royalties into a songwriter share and a publisher share — roughly half and half. They are two separate claims on the same pot. If you affiliate with ASCAP or BMI as a writer and never register a publisher entity, the publisher half of your own song's performance royalties has no claimant.

Not held for you. Not paid later. Simply unclaimed.

If you are self-releasing, you are your own publisher. ASCAP charges $50 for the publisher account on top of the $50 writer account. BMI's songwriter affiliation is free, and BMI's publisher affiliation is $175 for an individual, $250 for a corporation or LLC, and $500 for a partnership. BMI also tells new songwriters directly that they will not need to set up a publishing company, so the honest move at BMI is to start free as a writer and pay the $175 later if and when a publisher entity is actually warranted.

When does each pot actually pay out?

The lag is the part nobody warns you about. A stream in January is not money in January.

The MLC is the only one of the four that publishes a clean, checkable rule: 75 days after the end of the monthly usage period. It is also the only one with published payout minimums for US members — $5 by ACH, $100 by check, $250 by wire. Choose ACH. A small catalogue can wait years to cross $100 and the money just sits there in the meantime.

What does "unclaimed" look like at scale?

Pot 3 gives the clearest measurement. When the Music Modernization Act blanket licence took effect in 2021, the digital services transferred approximately $424 million in accrued historical unmatched mechanical royalties to The MLC — years of prior streaming usage on real songs by real writers that had never been matched to a copyright owner. That was a one-time handover of a historical backlog, not a balance sitting at The MLC today, and The MLC has since matched and distributed a substantial portion of it.

The shape of the problem matters more than the headline number. Unmatched royalties are not a jackpot waiting to be claimed; they are a leak that runs every month, in all four pots, as new usage arrives and some of it fails to link to a registered work. That mechanism is the whole argument. It is not that the system is stealing from independent artists. It is that the system requires you to raise your hand, and nobody ever told you there was a hand to raise.

Being unregistered does not mean you are not earning. It means you are earning into a pile you cannot reach.

What does a distributor's publishing add-on change?

It changes who does the paperwork, not how many pots exist. DistroKid Publishing, for example, collects global digital mechanicals, US offline mechanicals, global digital public performance, US offline public performance, worldwide sync and settlement payments — and DistroKid describes that income as different from your usual streaming royalties, which it already collects for all members.

The important caveat is in DistroKid's own wording: if you are affiliated with a PRO it collects both the publisher and songwriter shares, and if you are not affiliated it collects the publisher share only. Songtrust, CD Baby's publishing product and TuneCore's all sit in the same category. They are administrators. None of them removes the need to affiliate with ASCAP or BMI.

Worked example: tracing one January of streams

Assume a song of yours is streamed on Spotify and Apple Music through January, and assume for the sake of the arithmetic that the composition side of that month's usage generates $80 of performance royalty at ASCAP and $20 of mechanical royalty at The MLC. Those are illustrative figures, not a forecast — per-stream rates vary by platform, country and month, and nobody should budget against a number in an example.

Here is where each piece lands and when.

• The sound recording royalty appears on your DistroKid or TuneCore statement on that distributor's own schedule, typically a month or more after the usage month.
• The $20 of mechanicals is paid by The MLC roughly 75 days after January ends — so around mid-April — and only if the composition is registered. Under the $5 ACH minimum it pays out; under the $100 check minimum it would sit in the account for a long time.
• The $80 of performance royalty is divided by ASCAP into a $40 songwriter share and a $40 publisher share, distributed quarterly. With a writer account only, you receive $40 and the other $40 has no claimant.
• $0 reaches you from SoundExchange, because Spotify and Apple Music on-demand are interactive services and SoundExchange collects from non-interactive radio.

The lesson in the arithmetic is the $40, not the $80. A writer-only registration halves one of your four pots by default.

Does registering with the US Copyright Office collect any of these?

No. Registration with the US Copyright Office is a legal filing, not a collection account, and it pays no royalties at all. It establishes a public record of your claim and it is what allows you to sue for infringement in federal court and seek statutory damages.

Per the Copyright Office fee schedule retrieved August 31, 2026, the Single Application is $45, the Standard Application is $65, Group Registration of Works on an Album of Music (GRAM) is $65 for a whole album, and Group Registration of Unpublished Works (GRUW) is $85. GRAM is the one worth knowing: $65 for twelve tracks against $540 if you filed the same twelve individually.

Copyright registration and royalty registration are answers to two different questions. The Copyright Office protects the work. ASCAP, BMI, The MLC and SoundExchange pay for it.

The order I would register in

If you are starting from zero, this is roughly one afternoon.

1. PRO first — ASCAP at $50 for the writer account, or BMI free as a songwriter. Decide the publisher half deliberately rather than by accident.
2. The MLC second — free, and you will want your PRO member number and publisher details from step 1 to hand. Set payment to ACH.
3. SoundExchange third — free, about ten minutes.
4. Register the works, not just the accounts — an affiliated account with no registered works collects nothing from any of them.
5. Read what your distributor plan actually covers rather than assuming it covers the composition.

Do this before your next release. Performance royalties accrue from the moment a song is publicly performed, and going back to claim retroactively is slower, more limited, and in some cases impossible.

I am an artist who has been through this, not a lawyer or an accountant. Fees and thresholds move — check them at the source before you rely on them.