Ultimate Guide to Music Monetization

Streaming

Streaming is the premier monetization model. It offers artists immediate monetization with minimal consumer buy-in. A stream only has to last 30 seconds to be monetized. Artists don’t need anyone to be in love with them or their music to make money. All an artist has to do is get people to listen, and the price people often pay to listen is ZERO! It’s a dream scenario. So, what’s the problem?

The problem with music streaming and monetization is the payment distribution model. The royalty pie is split between all rights holders based on their percentage of the total number of streams. The bar of a 30-second stream strips away the need for consumer buy-in. Listeners don’t have to love, or even like, a song, just stream it for at least 30 seconds. It’s like paying car salesmen per sales pitch rather than per sale. Imagine a dealership pools its sales revenue and pays commissions based on that system.

You’d have workers making shorter, less effective pitches. The system could easily be gamed by having family and friends stop by, pretending to be interested in buying, maybe even paying people to stop by, depending on the ROI.

Now we have artists making 1-minute songs because they earn 3 streams, in the time it would take a listener to get through a 3-minute song that would earn 1 stream. We see programs that automate streaming to artificially inflate artists’ stream counts and their share of the revenue pie. This results in artists earning less for legitimate streams.

The second problem is that the revenue paid to rights-holders is capped. If there’s $1,000 paid by Spotify to rights holders. The most anyone can earn is 100% of $1,000, no matter how many streams are generated, because the revenue doesn't increase with streaming activity. Users aren’t charged based on consumption. They pay a flat fee for all they can eat. 

It’s not a situation where more streams necessarily equal more money. Since the revenue pool is fixed, more streams can mean smaller slices for everyone. The value of a stream declines if the size of the pie doesn’t grow at a comparable rate to the number of mouths eating it.

$1,000 / 1,000 streams = $1 per stream

$1,000 / 10,000 stream = $0.10 per stream

$1,000 / 100,000 streams = $0.01 per stream

$1,000 / 1,000,000 = $0.001 per stream

Monetization Thresholds & Restrictions

Streaming platforms cannot force more people to subscribe and grow the pie. But the major record companies with the catalogs they depend on are concerned about their shrinking share of it. While they can’t control how many people subscribe, they can control the number of rights holders they have to pay. So, what they’ve chosen to do is eliminate mouths.

Coerced by Universal Music Group to adopt their “Artist-Centric” model, DSPs like Deezer, Amazon Music, and Spotify now have - or plan to implement - monetization thresholds. DIY digital distributors like Distrokid now have to pay $10 for each song that’s flagged for streaming fraud. What classifies as streaming fraud is at the discretion of the DSP. Some distributors have highlighted a sudden spike in streaming activity as streaming fraud. Music designed to help listeners focus, meditate, or sleep has been reclassified as “functional” music, demonetized, and replaced with non-revenue-earning, platform-created music designed for the same purpose.

The point of the threshold is to ensure that revenue is driven to the artists who add the most value. Streams don’t generate revenue; subscriptions do. The artists with the greatest value are those who drive subscriptions.

It’s like a concert where you have a headliner and an unknown opening act. The headliner gets paid because they’re the reason people buy tickets, not necessarily because people love their performance. The opening act could outshine the headliner, but nobody paid to see them. This is the logic behind Artist-centric.

It’s not about what fans choose to stream, it’s about what drives them to subscribe. Every artist can upload music to platforms and receive streams, but not all streams are equal. Royalties have a clear destination and rules change to ensure they get where they’re “supposed” to go. That’s into the pockets of major record companies and labels.

Thresholds

Under Spotify’s threshold, each song that generates fewer than 1,000 streams every 12 months gets demonetized. Additionally, the streams must come from an undisclosed number of listeners, kept secret by Spotify due to their claim that it leads to manipulation. Every song in an artist’s catalog with fewer than 84 streams each month earns nothing. Even songs that qualify will lose all revenue from their first 1,000 streams, depending on how many months it takes to reach the total.

A song could surpass the required number of streams but fail to reach the listener threshold. Due to only being paid for streams acquired during the month the threshold is reached, an artist would be paid for 84 streams if it took them 12 months to earn 1,000 streams. So 916 streams of every song that follows this pattern would be disqualified from monetization.

Deezer has a separate threshold model. Amazon Music hasn’t disclosed what its threshold will be.

Apple Music

Apple Music has also adopted Artist-centric, but in an alternate way that isn’t as restrictive as Spotify’s. Instead of demonetized songs, Apple Music rewards songs mixed in Spatial Audio, which is a new high-quality audio format offered on the platform. Technically, anyone with engineering expertise can take advantage, but without that, most indie artists may find themselves priced out. Billboard magazine stated:

“The average cost for mixing a song for spatial audio, like Dolby Atmos, can range from $500 to $5,000 per album, with some experts citing costs as high as $15,000. More affordable options are available online, but Apple discourages those that don't meet their standards.”

Spatial Audio pays 10% more, and under the shared revenue model, if a group gets 10% more, everyone else gets 10% less.

Deezer

Artist-Centric on Deezer takes the form of a threshold of 1,000 streams per month from a minimum of 500 listeners. Technically, it’s not a threshold because songs aren’t being demonetized; instead, boosts are being applied to songs that reach certain milestones. Earning 1,000 streams from 500 listeners results in a double boost, where each stream would count as two. Having songs sought out through search and added to non-algorithmic playlists would result in a quadruple boost, where each stream would count as four. Under a shared revenue model, these boosts effectively demonetize songs that don’t qualify for them by draining the revenue pool. That’s what makes it a threshold.

Deezer has fewer than 20 million subscribers as opposed to Spotify, which has over 230 million. A song that gets 1,000 streams every 12 months on Spotify would likely earn just 87 streams over the same period on Deezer. An artist would have to drive at least 150K streams on Spotify to be in the range of monetization on Deezer.

Amazon Music

Amazon Music has also announced that it plans to implement the Artist-centric model, but hasn’t provided any details on how.

Staying monetized

Spotify has an advertising tool called Showcase. Artists can use the Showcase tool to promote old releases to old and new audiences. Showcase ads are shown to both users on the premium and ad-supported tiers. Songs that no longer qualify for monetization can be advertised to meet the threshold. What it comes down to is the cost.

Monetization Beyond a Stream

Event Promoters, investors, and just about everybody with the ability to make anything happen for an artist are moved by Spotify numbers. The stream counts are publicly visible and provide instant insight into an artist’s value.

The numbers, on their own, don’t do much for an artist unless they chart, but for artists with relationships, a lot can happen. If an artist is in contact with talent bookers, they make for an easier pitch and higher pay. If they’re in contact with investors, they work to justify greater investment.

Catalog sales & advances 

Companies are buying the rights to the streaming royalties of Indie artists. An artist may not be able to make a living off $3K annually, but a catalog acquisition might pay $30K upfront based on its value over the next 10 years. Streams are an asset because they’re guaranteed cash flow, even if it’s not a major amount.

Thriving on Streaming

The streaming monetization model isn’t one size fits all. It’s for music that works for mass consumption. We’re talking about easy listening-style songs that can play on loop in department stores and what I call “high-usage music” like workout songs, songs for studying, and meditation, that fit into users’ daily routines. If you want to find success on streaming, your music needs to fit into one or multiple of these categories, or you need a hit record.

What if you get a hit? It doesn’t have to be a major hit, it could be a hit within your niche genre. Maximizing revenue from streaming is a game of quantity. To maximize the revenue of a hit, artists should create cover song and remix contests to crowdsource as many renditions as possible. Through Publishing rights and rights to the master, they’d have an equity stake in each creation and an endless stream of digital assets.

Takeaway

Spotify and other major DSPs have become hostile territory for DIY artists releasing through distributors like Distrokid. Spotify, in particular, is a platform controlled by major labels and partly owned by one, with UMG having an actual equity stake. Once upon a time, artists could earn by committee, releasing lots of songs that could collectively allow them to at least recoup what they spent on distribution. Spotify has now declared that a form of gaming the system. Here’s a quote from them on the topic.

“We also believe the policy will eliminate one strategy used to attempt to game the system or hide artificial streaming, as uploaders will no longer be able to generate pennies from an extremely high volume of tracks.” 

Spotify routinely puts its thumb on the scale in favor of major label releases. A stark example came in 2018, when the platform placed Drake on the cover of nearly every editorial playlist, even ones where his music wasn’t a natural fit. This kind of exposure, both editorial and algorithmic, acts like a turbo boost for mainstream artists. Compounding the issue, Spotify doesn’t allow users to dislike a song or ban an artist from recommendations, making it difficult to signal genuine listening preferences. Multiple plays - even accidental or passive ones - trigger more recommendations, creating a feedback loop that floods listeners with major label content.

For independent artists, it’s not a level playing field. Spotify’s editorial strategy and opaque recommendation systems often suppress the discovery of emerging or DIY talent. Artists must decide whether it’s worth the increasing trouble of navigating a platform whose rules, thresholds, and tactics seem designed to push them out of the game.

Soundcloud monetization 

SoundCloud has quietly built one of the most artist-friendly monetization systems in the music industry, especially for independent creators. While Spotify pays based on total global streams (the pro-rata model), SoundCloud’s Fan-powered model pays you based on how much your actual fans listen to you. This shift in approach creates a more equitable playing field for DIY artists, giving them a better shot at making real money from loyal listeners.

How It Works

SoundCloud divides its revenue into two buckets:

● Pro Pool: Revenue from users who stream artists enrolled in SoundCloud Pro. This pool uses a Fan-Powered model - each user’s revenue goes to the artists they actually listen to.

● Non-Pro Pool: Revenue from streams of artists not enrolled in Pro. This follows the pro-rata model used by Spotify, where revenue is shared based on total platform streams.

Under the Fan-Powered model:

● If a listener spends 100% of their time streaming you, you get 100% of the revenue from that listener.

● Even free users contribute to your earnings through ad revenue, which scales with time spent streaming your music.

Why It’s Great

Free On-Demand Access for Listeners

Unlike Spotify, which limits how ad-supported users can listen, SoundCloud gives them full, on-demand access. If a listener wants to replay your song 100 times, nothing stops them. Every stream drives ad revenue, and most of it goes to you if you're a Pro artist.

Less Competition, More Opportunity

Many songs on SoundCloud are restricted to Go+ subscribers, reducing the noise for artists in the Pro program. This creates more opportunities to be featured on editorial and algorithmic playlists and increases your chances of being discovered by casual listeners.

Built-In Promotion

Every SoundCloud Pro user gets automatic promotion for each track they upload. Each release is pushed to up to 1,000 targeted users, offering a promotional boost that helps build your fanbase with every drop.

The Drawbacks

No Credit for Driving Traffic

Fan-Powered models only reward artists who get streamed, not the ones who bring fans to the platform. If 10,000 people visit SoundCloud because of your new release, but end up streaming other artists, you earn nothing from the traffic you brought, even if their subscriptions or ad views were triggered by your presence.

SoundCloud offers an affiliate program to help with this, but it caps earnings at just $150 per account, which is a poor trade for high-value traffic drivers.

Thriving on SoundCloud

Fan-Powered is a game of quality and quantity. Sure, one song can rack up streams from an individual user, but it’s easier if that user has multiple songs from the same artist in their library. SoundCloud has a tool called Fans that showcases an artist’s heaviest streamers and allows direct messaging at no cost. This grant artists the ability to communicate with their biggest fans and drive deeper connection and engagement.

Takeaway

SoundCloud’s Fan-Powered model is a breath of fresh air for indie artists. It rewards deep engagement and gives artists a direct line to fan-driven revenue, without gatekeeping playback on the free tier. While it’s not perfect, especially for artists who drive platform traffic without converting streams, it’s one of the few platforms where loyalty, not virality, actually pays.

YouTube Monetization

YouTube has always provided artists with expansive opportunities for monetization. In its early days, creators could integrate direct ads from their partners, having YouTube manage the delivery of impressions and track views. It also offered the ability to sell video on demand. While complaining about low royalty payments from YouTube, the industry never took advantage of any of these tools. Getting paid for views was simply the easier way. Though those tools are no longer in play, YouTube has replaced them with much better ones.

YouTube monetization is broken into three platforms, each with unique models. You have:

1. YouTube.com - Ad Revenue, Memberships, Merch, Micro-payments

2. YouTube Music - Ad and Subscription Revenue

3. YouTube Premium - Subscription Revenue

Let’s break it down.

1. YouTube.com: Ad Revenue, Memberships, Micro-payments, Oh My…

Ad Revenue

YouTube.com pays you a cut of ad revenue for each view. If someone watches your video and an ad plays, if the ad costs an advertiser $1, you get $0.55, and YouTube pockets the remaining $0.45.

If the viewer skips the ad after 5 seconds (and let’s be honest - everyone skips ads, especially when they're trying to vibe through a playlist), nobody gets paid. Not you or YouTube.

While you can earn more per view than per Spotify stream (Spotify's payouts are like 0.003 cents per stream), most music fans skip ads. Unless you’ve got a strong relationship with your fans, like a loyal YouTube audience who wants to support you, ad revenue for music isn’t a gold mine.

Memberships

Creatives can offer different perks in exchange for monthly fees from viewers, like exclusive live streams, early access to videos, exclusive chats, custom stickers, and more. The group Blackpink did a ticketed live performance on YouTube using its membership feature. Buyers got access to the live-streamed concert and replays, plus other membership perks for a month. I’m almost certain many of the people who bought tickets forgot to cancel and continued to pay the monthly fee for months before noticing.

Super Chat

Super Chat is a feature reminiscent of Twitch and its micro-payment system, but more direct. On Twitch, users buy bundles of graphic images that represent fractions of pennies that can be given to streamers live as a show of support. Super Chat allows users to pay straight cash. They click the button to give, select a dollar amount, and pay. It was stated during Vidcon in 2019, after the initial launch of the feature, that some YouTubers were earning as much as $400 per minute through Super Chat donations. And, it had become the primary source of income for over 20,000 channels.

Super Thanks

While Super Chat is exclusive to live streams, Super Thanks has the same functionality but runs across on-demand videos. Under each video, there’s a button viewers can click to give as a thank you for its creation.

Merch Shelf 

YouTube allows creators to integrate their online stores and sell products directly on YouTube. They can link to specific products within videos, and there’s a visual display underneath each video calling attention to the products.

Affiliate/Shopping

Artists can link to products spanning across a multitude of retailers, from Apple to Walmart, and earn affiliate revenue from any product in each store. A song about cherry lipstick can link to cherry lipstick and get a kickback from each purchase.

Additional opportunities

Artists have tools such as the description box, pinned comments, the Community Tab, Cards (slide-out in-video displays), and End Screens (Calls-to-Action that display at the end of each video) that they can use to sell and direct traffic anywhere.

Drawbacks

Monetization on YouTube.com requires artists to reach a threshold of 500 Subscribers and 3,000 hours watched. Not only are artists restricted from monetizing through ads, memberships, etc., but they’re also restricted from linking externally in-video using Cards and End Screens. There’s no ability to immediately monetize outside of directing traffic off-platform through the description box and pinned comments.

YouTube’s monetization threshold is difficult for artists to reach because views are scattered across separate properties of the platform. An artist may have videos through VEVO, but the watch hours of those views don’t count toward monetization. They may upload albums on YouTube Music through their distribution company, but the watch hours of those songs don’t count toward monetization. Watch hours from views driven by Google Ads don’t count toward monetization.

Driving traffic off YouTube can lead to the suppression of your videos because it will drop the amount of time your viewers spend consuming media on YouTube.

The revenue split on memberships and donations is 70/30, with YouTube taking 30%.

YouTube Music: Stream Like It’s Spotify

YouTube Music works like Spotify. All the revenue from ads and subscriptions gets dumped into a big pot. Your payout depends on your share of total streams.

If you made up 1% of all streams on YouTube Music that month, you get 1% of the pie. And unlike YouTube.com, you actually get paid for every stream, whether someone skipped an ad or not.

Drawbacks

YouTube Music isn’t as widespread as YouTube.com. So if your fans are international, some of them might run into roadblocks trying to stream your tracks. Less reach = less revenue. Additionally, most people who use YouTube for music use YouTube.com and not YouTube’s music app. There’s no way to reach the YouTube music audience, even by advertising directly on YouTube.

The Artist-centric model being forced on DSPs by Universal Music Group will likely find its way to YouTube Music at some point. This will bring a monetization threshold to the platform, complicating revenue generation.

YouTube Premium: Time Is Literally Money 

YouTube Premium doesn’t pay you per stream. It pays you based on how long people watch your videos.

So if you’re running a podcast, talk show, or anything that gets people watching for hours, you’re gonna love YouTube Premium. If people spend more time watching your content, you get a bigger slice of the subscriber revenue.

Music videos don’t last that long. Three minutes, maybe five. You're not about to rack up premium hours like Joe Rogan. So while the money's good for long-form content, music isn’t really built to cash in here.

Drawbacks

It’s not beneficial to the way music is consumed. Songs are short, making it difficult to rack up watch time hours.

Music is competing with podcasts and live streams that go on for hours.

Content ID

Fingerprints of your songs are created, and YouTube is scanned for matches. Once a match is established on unauthorized third-party content, the video is claimed, ads may be placed on it, and the revenue from those ads will be paid out to you. Distributors and independent service providers like Audiam manage Content ID, and it comes with a price tag.

Drawbacks

Rights holders must sacrifice a percentage of their revenue, often between 20% and 30%, to join Content ID programs. Only channels that are in the Partner Program and whose videos qualify for advertising are sure to be monetized. A channel, including your own, that uses your music but isn’t in the Partner Program, may, but is unlikely to have ads run across its videos. Artists, even if utilizing Content ID, may still have to work to qualify for monetization.

MCNs - Multi-Channel-Netowrks

MCNs are like YouTube labels. Your channel would be signed to a deal with a larger entity. This would allow your entire channel to be monetized. The benefit of joining an MCN is that it can get direct advertising at higher rates and distribute the revenue across its partners however it chooses. VEVO functions like an MCN.

Drawbacks

Channels in MCNs are now subject to YouTube’s monetization threshold, so it’s not a workaround, as it was previously.

You’re giving total control over your channel to a third party that can hide certain metrics like your revenue totals, demonetize and monetize videos at its discretion, and more.

Most MCNs are using it as a backdoor to gain a percentage of revenue from a multitude of channels. It’s a quantity over quality thing where they hope some of the channels generate enough revenue for their cut to amount to something significant. They don’t get direct ads, they don’t aid in marketing and promotion, they don’t do anything but take a cut.

Takeaway

It’s clear that the best pathway to monetization is through YouTube.com, but it’s not without challenges. Artists must refrain from distributing their releases through a distribution company to YouTube. Those releases must be manually uploaded directly to their channel, where the watch time will count toward monetization. The revenue generated by YouTube isn’t subject to split pays you may have arranged with your distributor, so that will have to be handled manually. Mechanical royalties will also have to be handled manually, as YouTube pays 100% of royalties for all rights to the uploader.

You’ll notice there’s no input for ISRC codes or UPCs when uploading videos to YouTube. This means videos of your song uploaded to your channel won’t technically count as music. Views won’t count toward charting positions or be recorded as sales for certification by the RIAA, which gives out plaques for Gold and Platinum selling releases. The alternative is to use Content ID, preferably with a distributor that allows whitelisting.

Direct Sales

Selling music today is charity. Music fans are donating to support your career, not because they need your music, but because they want to see you continue making it. Here's why.

Vinyl records served a purpose and solved a problem. They allowed people to bring music out of clubs and off the radio into their homes.

Cassette tapes improved on that by giving listeners the ability to fast-forward, rewind, and pause songs. They were also more compact, making them easier to store. Again, they solved a real problem.

CDs allowed listeners to skip through albums with ease. You could jump from one song to another with the push of a button. They held more music, so there was no flipping from side A to side B like you had to do with vinyl and cassettes.

Digital downloads solved a different problem: storage. As music libraries grew, it became harder to carry collections around and find what you wanted. Digital music lets listeners carry hundreds of songs, all searchable and sorted, making for a much smoother experience.

Then came streaming. It allowed listeners to carry millions of songs everywhere. More importantly, it improved discovery through algorithms, curated playlists, and powerful search tools.

Each technological shift was paired with hardware that made it practical:

● Vinyl had record players

● Cassettes had decks and Walkmans

● CDs had CD players and Discmans

● Digital music had the iPod

● Streaming has Spotify and other apps

Each advancement phased out its predecessor. Cassettes replaced vinyl. CD players replaced cassette decks. Streaming replaced both CDs and digital downloads. Most people today don’t own record players or CD players, and digital downloads have become inconvenient due to storage and access issues.

Downloads now feel like work. You have to download the file, locate it - often buried in your downloads folder - import it into a media player, and figure out how to sync it across your car, phone, speaker, and other devices. On top of that, there's no standard control over audio quality.

Music, as a standalone product, is dead. Today, it's a souvenir - something fans collect to show support, not something they buy for utility.

Once upon a time, if you heard a song and wanted to play it on demand, you had to buy it. You didn’t need to love the artist. You didn’t need to follow them or know anything about them. It was purely transactional.

Even now, when it comes to my favorite artists, all I care about are the songs I like. I don’t follow them on social media. I’ve never joined their mailing lists. I’m not interested in Q&As. I barely know anything about them beyond the music.

There’s a saying: “Never meet your heroes,” meaning you’re likely to be disappointed if you do. Some artists simply aren’t charming or personable. That used to be okay, because no one was buying their personality - they were buying the music. Take Miles Davis, for example, considered by many to have an unendearing personality, but he was an amazing musician, and to fans, that’s all that mattered.

Today, that’s changed. To sell music directly, artists need to connect with fans on a personal level. Fans need to feel emotionally invested in you. They need to feel like they know you. Sales are often driven by a sense of personal connection and obligation. Building that kind of bond takes time.

It’s not instant. It often takes years of relationship-building and nurturing. That process is time-consuming and sometimes costly.

With that foundation, let’s look at your options for selling direct to fans.

Bandcamp

Bandcamp is a music store with a strong community of collectors. It’s a space where music still matters and where fans genuinely care about artist compensation. Many understand that without financial support, the art can’t continue.

Pay-what-you-want pricing is Bandcamp’s signature feature. Since buying music isn’t necessary anymore and is largely driven by goodwill, Bandcamp leans into that with flexible pricing. Artists can set a minimum price, or allow fans to pay nothing, and fans can pay more if they choose. Bandcamp makes it known that customers often pay more with statements like this.

“Fans pay more than the minimum a whopping 40% of the time, driving up the average price paid by nearly 50%. Every day, we see überfans paying $50, $100, $200 for albums priced far lower.”

This sounds encouraging, and some artists interpret it to mean they’ll make more money on Bandcamp than streaming platforms. But the missing piece is the conversion rate - how many people are likely to buy in the first place. The fact that some fans pay more doesn’t mean many people are paying at all.

I’ve had music on Bandcamp for over a decade. In that time, I’ve made a single sale. I set the minimum price to zero, and the buyer chose to pay $1, more than I asked for, but still just $1 in ten years. Most artists I know have similar stories. Their music just sits there, occasionally selling a copy every few years.

That said, some artists do find success on Bandcamp. I know a few who do quite well.

Revenue share: Bandcamp takes 15% of the revenue from each sale. Once a month, they run Bandcamp Friday, where they waive their cut entirely, allowing artists to keep 100%. Sales typically spike on Bandcamp

Fridays, showing that purchases are often motivated by community support rather than product demand.

Perks for downloaders:

● Fans can choose from multiple file formats, including MP3 and WAV, even if they paid nothing. Artists can’t restrict formats based on price. That’s because Bandcamp isn’t designed like a typical e-commerce platform - it’s built around the idea of goodwill.

● Streaming - Bandcamp has a royalty-free streaming option. Everyone who downloads an artist’s release has the ability to stream it on Bandcamp’s app for free. This can hurt revenue since fans may stream on Bandcamp instead of Spotify or Apple Music, platforms that pay royalties for streams.

● Buyers are recognized. Bandcamp displays thumbnails of people who purchased each release. In tight-knit communities, this can encourage more sales because people don’t want to be seen as unsupportive. Especially other creatives in the community looking for reciprocity.

Even

Even is a music store similar to Bandcamp, but with more traditional e-commerce elements. Like Bandcamp, it offers pay-what-you-want pricing with optional zero minimums. But unlike Bandcamp, Even lets artists create tiers with added perks. For example, someone who pays $20 for your album might get access to an exclusive video.

This creates an incentive to spend more. Fans aren’t just giving out of kindness - they’re getting something in return. Artists can also sell non-music items on Even, which they can also do on Bandcamp, but in a limited capacity. This offers artists more flexibility.

Revenue share: Even takes a 20% commission on sales.

Both Bandcamp and Even appeal to artists who are uncertain about their sales potential. These platforms offer percentage-based pricing, which minimizes risk upfront. If things go poorly, you don’t lose much. If things go well, the platform takes a cut. That’s the trade-off. When you’re only making a few sales, 15% or 20% seems reasonable. But when you’re selling in volume, it becomes expensive.

Another downside: these platforms lack standard e-commerce tools like conversion tracking, abandoned cart recovery, and third-party analytics integration. They’re great for getting started, but not ideal for artists expecting significant revenue.

Traditional E-commerce (Shopify, Squarespace)

Platforms like Shopify and Squarespace give artists more control and help them keep more of their revenue. Instead of paying a percentage per sale, you pay a flat monthly fee, which can end up costing less as sales grow.

These platforms also offer complete control over branding, design, and user experience. You can build a professional storefront that fits your vision. They also offer flexible payment options, integrating with multiple payment gateways like Stripe, Amazon Pay, Google Pay, Apple Pay, cryptocurrencies, and more. Artists have control over how foreign currencies are handled, where they can accept British Pounds directly, without forcing British customers to convert to USD. Stretch pay also becomes available, allowing fans to pay for higher-priced items in installments.

Of course, there are challenges:

● You’re responsible for the design and setup.

● You have to manage maintenance and troubleshooting, mainly by contacting customer support for the platform.

● You have to engage directly with customers if there’s an issue, unless you hire an intern to do customer support.

Still, you’re in control - and you have the flexibility to keep costs down over time.

Websites

Think of Bandcamp and Even like renting a room in someone’s house. Shopify and Squarespace are like renting an apartment. A website is like owning land. You can do anything you want with a website, even extend it beyond the sale of your music and turn it into its own business. With a website, you could build a home for you to live in, a rental property to lease to tenants, and retail space to lease to merchants. To paraphrase the words of the mighty He-Man, “You have the POWER!”

The price point for a website is lower than what you’d pay for an e-commerce solution like Shopify. One of the best plans on Hostinger allows you to host up to 100 websites, and it only costs $7.99/month on promotion, which seems to be perpetual.

It’s not all roses with owning a website. Similar to owning a home, all the responsibility for repairs and other matters falls on you. You can’t contact Shopify support if something doesn’t work; you have to find a programmer to hire and have it fixed. It offers the most flexibility, but also the most responsibility.

Subscriptions

One major benefit of subscriptions is reliable revenue. You don’t need fans to love your latest album enough to buy it - they’ve already paid.

But subscriptions also create pressure. Fans expect consistent value. Platforms like Spotify succeed because they deliver new content constantly from many artists. If you're the only content source, you can't afford to go silent for months or years.

The ideal subscription setup is one where:

● You’re offering access to a deep back catalog,

● Or you’re regularly creating lightweight content (e.g., photos, voice notes, livestreams).

This way, you meet fan expectations without exhausting yourself.

Licensing

How your music earns money from TV, games, covers, AI, and more

Music licensing is one of the most powerful yet misunderstood forms of monetization in the industry. When someone pays to use your music - whether in a TV show, video game, cover version, or even an AI-generated remix - they’re paying for a license. That license gives them legal permission to use your work, and in exchange, you get paid. But there’s more than one “work” at play - and more than one kind of payment involved.

Two Assets: Master & Publishing

Licensing revenue stems from two distinct copyrights:

● Master Rights – the actual recording of the song.

● Publishing Rights – the composition (lyrics, melody, harmony, etc.)

To fully control your licensing revenue, you need to own or control both. If you don’t, you’ll likely be splitting earnings with labels, co-writers, or publishers.

Types of Licensing & Royalties

Sync Licensing

Usage of music in TV, film, video games, commercials, etc. Sync deals usually pay both the master and publishing owners. If someone wants to place your song in a Netflix show, they’ll need to pay:

● You (or your label) for the master

● You (or your publisher) for the composition

You can negotiate these fees directly or work with a sync agent/library.

📻 Radio & Broadcast Licensing

In the U.S., radio stations only pay for publishing rights, meaning only songwriters get paid for airplay. Labels and performing artists don’t earn anything from terrestrial radio plays (AM/FM).

In other countries, it's different: They recognize neighboring rights, so both master rights holders and performers are paid royalties for radio spins. That means a hit overseas might earn you far more than one in your home country.

Non-interactive Radio

When your music is played on digital radio stations and platforms like Pandora, you’re owed royalties as both the owner of the master recording and as a performer.

SoundExchange is the company responsible for collecting and paying performers and owners of master recordings royalties for non-interactive radio. It’s like ASCAP and BMI but for digital radio.

AI & Sampling

Emerging platforms like Suno and Udio that use AI to create derivative works should, in theory, pay for:

● Sampling: Usage of your master recording

● Derivative works: Use of melodies, lyrics, or style from your publishing

These rules are still evolving, but artists and rights holders will likely be negotiating deals with these platforms soon, potentially creating a whole new licensing category.

Many digital distributors like Tunecore, Symphonic, and Landr have already begun to license music to AI companies for training and usage. Artists can opt in and receive royalties.

Lyric Display Rights

Websites like Genius and Musixmatch publicly display lyrics and must pay publishing royalties to do so. These payments go through collection societies, often negotiated via publishers or services like LyricFind.

Live Performance Licensing

When you (or anyone else) perform your song live - at a club, bar, or festival - the venue pays a blanket license to a Performing Rights Organization (PRO) like ASCAP or BMI.

You get paid:

● As a performer (from the promoter)

● As a writer (from the PRO, for the public performance)

Even when someone covers your song, you’re owed royalties. You claim these royalties by filling out a form provided by your PRO detailing the date of your performance and the songs you’ve performed.

Cover Song Licensing

When someone records and distributes a cover of your song, they’re subject to a compulsory license:

● You can’t say no

● You can’t negotiate the rate

● They must pay the statutory mechanical royalty (currently 12¢ per download in the U.S.)

If the cover significantly changes your lyrics or melody, it becomes a derivative work. In that case, you can say no and negotiate your fee.

Sampling vs. Covering

● Sampling: Uses part of your master and composition ○ You can say no

○ You can charge whatever you want

● Covering: Uses your composition only ○ You can’t say no (under compulsory license)

○ Payment is set by law

Sampling always requires permission. Covering doesn't - unless they alter your song.

Cover songs and Remixes (sampling) are major revenue drivers. One hit can be covered hundreds of times, and each version can drive significant revenue. The same rule applies to remixes.

Public Performance vs. Mechanical Royalties

● Public Performance Royalties: Paid when your music is played in public - radio, bars, concerts, even weddings. ○ Collected by PROs: ASCAP, BMI, SESAC, etc.

● Mechanical Royalties: Paid when your music is duplicated - CDs, downloads, streams. ○ Collected by: MLC (U.S. only), Harry Fox Agency, SongTrust

Streaming generates both mechanical and performance royalties.

Split Sheets vs. Ownership Agreements

Split sheets help you divide up revenue ("you get 60%, I get 40%"), but they don’t establish legal control. They don’t say:

● Who can approve a sync license

● Who can reject a cover?

● Who negotiates fees

Without a proper ownership agreement, anyone with a stake could undercut you as long as the deal they cut is non-exclusive. If you want $10,000 for a license, another co-owner could license the same track for $1,000.

Protect yourself by spelling out:

● Who owns what

● Who controls what

● Who gets the final say in negotiations?

Takeaway

Licensing is one of the few ways artists can get paid upfront for their music, but only if they own or control the rights. From cover songs to AI platforms, every usage requires permission and payment. Make sure you know the difference between split sheets and ownership, understand how royalties are divided, and don’t overlook the power of public performance and lyric rights.

With the right agreements in place, one song can earn dozens of income streams over decades.

Advances: Monetizing the Monetization

There’s monetizing your music, and then there’s monetizing the money your music earns. In recent years, fintech platforms have introduced a new model of music financing: catalog advances. These aren’t payments for streams or licenses - they’re lump-sum payouts offered to independent artists based on their past royalty earnings. In short, you're borrowing against your future royalties.

These platforms provide calculators to estimate how much you might qualify for, often promoting the funds as a way to invest in your career, whether that means recording an album, funding a tour, or boosting your marketing.

But make no mistake: advances are not a new income stream. They are a financial tool that leverages an existing one. You don’t get an advance unless you’re already earning royalties. The amount you’re offered is based on your historic earnings, not your plans or budget.

The Illusion of Flexibility

It’s tempting to see advances as a quick fix or boost, but their limitations are often glossed over. For instance, you might only qualify for a $500 advance, hardly enough to fund an album or tour. Worse, because your future royalties are used to repay the advance, you’ll stop receiving your regular income stream until the full amount (plus fees) is recouped.

If you’re currently relying on your royalty checks to pay rent or bills, this creates a cash flow problem. Advances only make sense if your royalties are already disposable income - extra money you can afford to lose access to temporarily.

The True Cost of Advances

Advances come with fees that often rival high-interest loans. However, platforms avoid calling them "loans" to sidestep regulation and consumer hesitation. Instead, they use terms like recoupment rate to describe how they recover the funds.

Let’s break that down:

● A recoupment rate of 89% means that for every $1 your music earns, only $0.89 goes toward paying off your advance. The other $0.11 is essentially interest.

● That’s an 11% interest rate - but it doesn’t stop there. Some platforms also charge origination fees, often around 27% of the total amount.

● In practice, you could end up paying 38% interest or more.

Let’s say you accept a $500 advance:

● Add a 27% origination fee = $135

● Add 11% interest = $55

● Total cost = $690 paid back for $500 received

And if you recoup early? You don’t necessarily get your royalties back right away. Some platforms continue to collect their cut for the duration of your contract. If you recoup in 1 month but your term is 12 months, you may still lose a portion of your royalties for the remaining 11 months.

In one hypothetical case, an artist could repay $1,295 over a year on a $500 advance if their revenue suddenly spikes, more than 2.5x what they borrowed.

Case Study: BeatBread

BeatBread is one of the better-known companies offering catalog-based advances. Artists get paid upfront based on the past performance of their music, and BeatBread collects repayment by intercepting royalties from:

● Your music distributor (for streams and downloads)

● SoundExchange (for digital performance royalties)

You retain 100% of:

● Publishing royalties

● Direct-to-fan sales (e.g., vinyl or digital downloads via your website)

You also have the option to keep a small percentage of your streaming royalties during the contract term (e.g., 10%), but doing so reduces the size of your advance.

Example Offer from BeatBread:

● Advance: $1,000

● Term Length: 1 year

● Recoupment Rate: 89%

● Origination Fee: $278

● Advanced Interest Fee: 2.8%

● Total Payback: $1,416

● Total Fees: $416

This means you're paying 41.6% on a 12-month advance.

What Happens if You Recoup Early?

BeatBread doesn’t currently publish clear terms about early repayment. I recall seeing a previous version of their website where they stated that if you repaid the advance early, they would continue collecting your royalties but pay out at the recoupment rate. For example, 89% of your royalties would be paid out to you instead of going to recoupment, but BeatBread would continue to collect 11% for the full term of the agreement.

In practice, this acts like an early repayment penalty, similar to what you’d find in predatory loan contracts.

Selling Your Rights Instead

An alternative to taking an advance is to sell your rights outright - either a single song, a group of songs, or your entire catalog. This isn't a loan, so there’s no repayment, but you lose the ability to earn royalties from those works in the future.

These deals are priced based on expected earnings over 10 to 20 years. They often provide much larger payouts than an advance. That said, there’s a catch:

● You permanently give up your royalty stream (unless limited rights or buyback options are specified)

● While rights may legally revert to the creator after 35 years, many platforms get around this by purchasing royalty rights, not ownership of the master

These deals are more attractive to investors than to artists. Corporations have the resources and longevity to extract long-term value from your catalog, whether through sync placements, licensing to film studios, or creating platforms that don't pay royalties because they own the music. Spotify generated $17 billion in 2024, and 70% of it went to rights holders. Imagine if it got to keep it all because it owned the music.

Platforms That Buy or Fractionalize Music Rights

Sonomo

Sonomo is a music distribution and investment platform that allows artists to fractionalize ownership of their songs and sell shares on a marketplace. Like stock trading apps, Sonomo introduces speculation into the music space.

Pros:

● Artists can retain partial ownership and benefit from value spikes

● Shareholders have an incentive to promote your work

Cons:

● Highly vulnerable to manipulation (e.g., pump-and-dump schemes)

● Value can be driven by hype, not real revenue

● Not regulated like traditional securities

Opulous

Opulous is a crypto-based platform that combines advances, catalog sales, and music investments. Investors purchase $OPUL tokens, which grant entries into raffles for fractional ownership of songs.

Pros:

● Value is subjective; fans may pay based on emotion, not just ROI

● Ownership is traded as NFTs, not tied to revenue performance

Cons:

● Even more susceptible to manipulation

● Very limited financial transparency

● NFT resale value can be unpredictable and disconnected from earnings

Takeaway

Catalog advances and rights sales are powerful financial tools - but they’re not magic money. They come with strings attached, and artists should approach them with caution, especially if they depend on royalties for day-to-day living.

Used wisely, advances can unlock new creative opportunities. Used carelessly, they can trap artists in unfavorable financial cycles. Always read the fine print, calculate your true cost, and consider the long-term impact on your independence and income.

Digital Real Estate - B2B

When we talk about digital real estate, we’re not talking about directly monetizing music. Instead, it’s about leveraging the value that music creates. Music opens the door to opportunities - opportunities that can be monetized by using your digital presence strategically.

Artists operating online have digital properties. These include their YouTube channel, where music is shared through videos. Each video offers multiple promotional touchpoints:

● End screens, which act as in-video calls to action, directing viewers to other videos, websites, or playlists.

● Cards, which slide out during the video with clickable prompts.

● The description box, where artists can post links to merch, tour dates, or other content.

● Pinned comments, placed at the top of the comment section for visibility.

On Spotify, artists can:

● Feature their latest releases at the top of their profile,

● Create playlists of music they enjoy (or want to promote)

On social media, artists have feeds, stories, reels, and community tabs - each one a potential space to feature music or promote others.

One of the most effective ways for an artist to promote their music is by piggybacking on another artist with a similar sound. That’s essentially how all major streaming platforms handle recommendations. They know

that fans of Artist A also listen to Artist B, so when someone plays Artist A, the algorithm suggests Artist B.

Advertising tools like Spotify Ad Studio and Marquee leverage this exact data. When you pay to advertise, they show your music to the fans of artists who sound like you. But here's the catch: Spotify doesn’t pay Artist A anything when you, Artist B, run ads targeting their audience.

So, if you’re Artist A, how do you extract that value?

You create your own monetization system. You say:

“If you want to tap into my audience, pay me. I’ll feature your video as the end screen of my YouTube video. I’ll add a card linking to it. I’ll include a link in the description or as a pinned comment. I’ll post about it on YouTube Shorts, in my Community tab, or even on Instagram.”

Each of these placements becomes ad space. Just like banner ads on a website, they hold value because of your audience.

This creates a new revenue stream for artists. But many hesitate to engage in this practice for a few reasons:

1. Negotiation fatigue – Artists don’t want to constantly haggle over rates or feel pressured to publicly list their prices.

2. Perceived authenticity – There’s an illusion that these kinds of shout-outs or co-signs are rooted in genuine admiration. If people find out these placements are paid, it can hurt the perceived value of the recommendation.

3. Reputation management – Artists are protective of their brand. Promoting music that doesn’t resonate with their audience - or worse, offends them - can lead to backlash.

This means the process isn’t as simple as accepting payment and posting a link. Artists often need to screen the music they’re being asked to promote. That adds another layer of friction and complexity to what could otherwise be a streamlined monetization method.

But despite the challenges, this form of digital real estate monetization represents a powerful, underused strategy. Artists can turn their platforms into promotional space - on their terms - and create value beyond streaming payouts.

NFTs: Digital Ownership or Digital Illusion?

What Is an NFT?

NFT stands for non-fungible token. At its core, it's a digital certificate of ownership that lives on a blockchain - a decentralized, public database maintained by computers around the world. Unlike cryptocurrencies (which are fungible, meaning one unit is the same as another), NFTs are unique, and each has a token ID that acts like a registration key.

This token ID tracks:

● Who owns it

● When it was purchased

● How much was paid

● And other transactional metadata

Because blockchains are decentralized, your ownership isn’t stored on a single company’s server (like Apple’s). Even if one computer goes offline, others maintain the record, making blockchain records extremely resilient.

What NFTs Don’t Do

A common misconception is that NFTs enable the transfer of digital files, like songs, videos, or images. But in reality, NFTs don't store files. Instead, they point to files stored elsewhere (usually on a public server), and only the token ID is registered on the blockchain. This means the files are publicly accessible and unprotected.

In other words, buying an NFT doesn’t give you a secure, exclusive copy of a song. It’s like being listed as the owner of a grain of sand on a public beach. Everyone can still walk on it; only your name is in the record book.

Why NFTs Were Hyped for Music

The idea of transferable digital ownership was groundbreaking. In the past, digital files could be copied endlessly. There was no way to "sell" your MP3 to someone else. NFTs promised to create a secondary market for digital music and allow artists to sell limited-edition digital goods with built-in resale royalties.

But as we now understand, the value of an NFT is symbolic and speculative, not functional ownership of the music itself.

The Reality: NFTs as Modern Patronage

Most music NFTs function more like donations than products. Buyers aren’t purchasing the song - they’re paying to be publicly recognized as a supporter. And that’s not worthless! It creates an on-chain history of support that artists can later reward.

For example, artists can grant exclusive access to:

● Early ticket sales

● Front-row seats

● Special merch

● Private shows or unreleased content

These perks can be limited to wallet holders who own a certain number of past NFTs, incentivizing collectors and potentially driving a secondary market. There’s no reason to buy music, consequently, fans need a motive for purchasing. I don’t know how much of a motive it is to be recognized as paying for something everyone else can have for free. That puts all the

weight on utility, but utility works best as surprise rewards rather than what buyers should expect.

Problems With The Utility of NFTs

Even when NFTs offer practical perks - like licensing rights, royalty shares, or memberships - they come with serious complications:

1. Licensing Rights

Some NFTs grant the buyer the right to commercially use the NFT's artwork or associated song. But what happens when the NFT is sold? Does the new owner inherit the license? If someone launches a product line using those rights, do they lose the right to sell their product if they no longer own the NFT?

2. Royalty-Generating NFTs

Some NFTs promise buyers a share of the revenue a song earns. But this creates a financial expectation, and the SEC may consider it a security. Selling these NFTs without registering them as securities can lead to federal prosecution.

3. Membership NFTs

Memberships are meant to generate recurring income, monthly or annually. But NFTs are a one-time purchase, which means creators must front-load all the value. That’s risky: who wants to pay hundreds or thousands of dollars upfront for benefits that may not be sustained?

To address this, some projects offer raffles or lotteries, but when only a few buyers benefit, the rest feel scammed, leading to disillusionment and backlash.

Tracking Support Through NFTs

One practical value of NFTs for musicians is on-chain fan tracking. Every buyer of your NFT - whether it's a song, album, or ticket - is recorded on the blockchain. You can then:

● Reward loyal supporters

● Give perks based on wallet history (e.g., only fans who own 3 albums get front-row seats)

● Spark resale activity in the secondary market

This kind of loyalty-based access can increase fan engagement and drive NFT prices, but it only works if fans believe the access is worth the investment.

Chain Smokers Royalty Share

Chain Smokers is a musical group that rewarded fans who purchased their music directly, meaning from their website, where they had their email addresses, with NFTs. Each NFT represented a share of royalties from their release “The Fall” and was delivered through a platform called Royal.io.

There was no investment and no expectation of profit with the way Chain Smokers distributed royalty shares. It was a reward. During the time when Chain Smokers did this, all NFT marketplaces enforced royalties so collections could be given away and revenue generated from sales on the secondary market. It was quite common for projects to use this tactic.

Royalty Resales: Good in Theory, Weak in Practice

NFTs allow creators to earn a royalty on every resale, often 10% or more. In theory, this means that if your NFT gains value over time, you continue to profit from its success.

But here’s the catch:

● Royalties aren’t enforced on-chain.

● Buyers can transfer NFTs peer-to-peer (outside of marketplaces) to avoid paying royalties.

● Some NFT platforms let users opt out of paying creator royalties altogether.

So, even if resale royalties are promised, they’re often evaded in practice.

Final Thoughts: Hype vs. Value

NFTs offer some novel tools for artists, but they’re often misunderstood, overhyped, and underregulated. The majority of music NFTs are not about true ownership or utility - they’re about signaling support, participating in a trend, or speculating on hype.

That doesn’t make them useless, but it does mean artists and fans should be clear-eyed about what they’re buying and selling.

Value in the NFT space isn’t baked into the tech - it’s determined by the behavior, honesty, and intentions of the people using it.

Social Tokens

Social tokens are coins - fungible tokens - that function as a form of currency. Unlike NFTs, which are non-fungible and unique, these coins are interchangeable, like dollars. They don’t need to have monetary value, but they can still carry utility.

Artists can use social tokens to reward fans. For example, fans who pre-save a song, share a track, or purchase an NFT might receive social tokens in return. These tokens can then be accepted as a form of payment at checkout, giving fans the option to buy music, merch, or event access using the artist’s custom coin.

Social tokens can also become real currency, like Bitcoin, if they’re listed on decentralized exchanges (DEXs). These exchanges are crypto’s equivalent to stock trading platforms like Robinhood, and they allow coins to be backed by stablecoins - digital assets pegged to the dollar, such as USDC. For example, 100 tokens backed by 100 USDC would set the value of each token at $1.

But there’s a catch.

Due to U.S. securities laws, the creator of the coin cannot establish or manage the market. Doing so could classify the token as an “unregistered security,” meaning it would be illegal to sell. The law sees this as a group of people investing in a common enterprise with the expectation of profit driven by a third party (the creator) - called the Howey Test, which could classify it as a security.

To stay compliant, the artist can’t be the one propping up the coin. However, they can incentivize others to create the market through a process called Staking.

Staking is similar to earning interest on money parked in a savings account. The artist might say to their fans: “If you provide liquidity - meaning you back my coin with USDC on a decentralized exchange - you can also stake

more tokens on our staking platform and earn interest.” They might offer high yields, like 10% or 20% annually, to encourage participation.

In this system, a $10 album purchase using the artist’s coin could theoretically become worth $100 if demand spikes. But if demand drops, that same coin could be worth only $1 the next day. The value is driven by speculation and market participation.

Now, while all of this sounds promising in theory, there’s significant friction in practice.

Using NFTs or Social Tokens means engaging with complex crypto systems - liquidity pools, staking platforms, token creation, and “Tokenomics.” It’s not just artists who need to figure this out - fans have to climb the same learning curve.

To participate, fans must:

● Download Web3 wallets

● Learn how to use decentralized exchanges

● Pay gas fees (transaction fees), especially when using popular blockchains like Ethereum

● Possibly use sidechains like Polygon or Arbitrum to reduce costs, or switch to entirely different chains like Solana, which might require token swaps or conversions

All of this introduces technical and psychological barriers that make mass adoption difficult.

Platforms You Can Use

One of the best platforms to use for Social Token creation is Fun.tryroll.com because it comes with infrastructure. Artists can sell their coin straight out of the gate, and holders can trade immediately. Once the token has sold at least 80% of its supply, it’s put on a decentralized exchange. There’s also Pump.fun, but that service leaves you on your own outside of the creation of the token.

RAC Social Token

The recording artist RAC rewarded collectors of his NFTs with allotments of his social token $RAC. Initially, the coin could only be used for things like exclusive drops, access to a private Discord channel, and things like that. Eventually, it was placed on a DEX, and holders were able to trade it for other cryptocurrencies like Ethereum and USDC.

Once again, we see the removal of an investment and expectation of profit through the use of rewarding past activity. What this does is incentivize future activity and drive secondary sales.

Takeaway

Big things often start small.

While most fans may never adopt this technology, a few will. And if enough value is created within those early communities - access to exclusive content, early tickets, private groups, or financial upside - more fans will start pushing through the friction to gain access to that value.

The issue is that NFTs and Social Tokens have a poor reputation due to an epidemic of scams. Artists risk the reputation of their brand by attempting to launch coins and sell NFTs. It’s hard to promote something if you’re low-key ashamed to tell people about it. For established acts, it’s worth the risk; the platforms often pay them upfront, where the launch of their coin or NFT project is essentially one big influencer campaign. When you’re dependent on the actual product being successful without wash trading or pumping and dumping, things become exponentially more challenging.