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A blue background with the words flow of income. A blue background with the words flow of income.

How it fits together—from listeners to creators

3 min read

How does income flow back to creators from the listeners?

Once a song has been listened to or purchased, the end of one journey becomes the beginning of another, making sure its creators and other rights holders all get paid.

Anyone who buys or listens to a through , physical music stores, radio, video, film, TV, live or non-live venues, for example, nightclubs and bars, will usually generate income for its . This could be directly via a payment from the listener, via other income coming from advertisers, for example, who pay DSPs for exposure to listeners on their sites, or via paid for the use of the songs, for example, from broadcasters or live and non-live venues. It is the catalyst for a process that sees money flow back through the ecosystem to the creators.

In order to be compensated, creators must input the appropriate about who did what, where, and when on the and the and all of the relevant key required for getting and paid.

Once a song is and then streamed, listened to, or purchased, the income journey from the listener back to its creators follows different income streams.

  1. and - for the use of their musical work.

  2. and - for the use of their sound recording.

There are then many different ways will be earned and paid;

  • When a song is streamed or downloaded online, will receive payments in the form of royalties, shared by music publishers and songwriters, record labels, and performers.

  • When a song is played on the radio or in a public venue like a supermarket or cafe, rights holders typically receive compensation through . CMOs make payments in the form of remunerations or royalties, which are shared by publishers and songwriters.

  • Depending on the region, and other performers may also receive compensation in the form of , or neighboring rights, royalties. Or they may receive no compensation for these rights in certain countries. Find out more about these royalties on our Related Rights page.

  • When the sound recording is purchased in a physical store, the flow of income goes to the record label. The label is responsible for compensating the recording artist and other performers, and paying to the publisher and songwriter for the physical copies manufactured – not necessarily purchased by consumers.

  • For live performances, recording artists are paid directly for their performance, and are paid to songwriters and publishers through CMOs. It is very important that all musical works that are performed live are reported, via a so-called , to the with whom the concert organizer has a license agreement, so that the songwriters and music publishers receive their proper compensation.

  • If the musical work and/or the sound recording reaches listeners as a featured element in a film, television show, video game, or advertising campaign, apply. Income from sync royalties will reach songwriters through their music publisher or CMO, and performers through their record labels.

Read more about royalties in our Getting Credited and Paid topic.

It's important to remember that CMOs and other organizations can only find creators and compensate them if key song and creator and are input and maintained correctly. It can seem that royalty flows from listeners, users, or consumers back to creators can be complex if you don't know how it all works. But don't worry; we have a whole topic on Getting Credited and Paid that will tell you more.

Animation credit: Jacob Vidkjær, Playminds