Now that you know the theoretical part of ownership and rights, we can talk about the money. For each right, a certain type of money will be paid. This is where it gets more complicated, because there are multiple streams of money, coming from multiple sources.

Let’s first consider the development of the music business over time. Music was first sold on vinyl, then on tape, then on CD, then downloaded, and then streamed. For each of those forms, there was a slightly different method of payment, so the money streams were different each time. There is quite a difference between the money when a track is sold as CD than when it is streamed. Because streaming takes up about 80% of the music industry today, this section will be about the money behind streaming. For the sake of example, we will use Spotify, but it works similarly with other streaming services.

When a consumer pays Spotify either directly with a subscription, or uses an ad-supported version (so businesses indirectly pay for them), then they can stream the tracks that are on Spotify. When a track is streamed, both sides of the rights are used: The master recording and the song. Spotify therefore has to pay royalties to the master recording owner as well as the song owner.