While the popularity of streaming services has been growing dramatically of over the years, the royalties paid our to artist and record labels are small and come a the fraction of a penny for each stream, this makes it challenging to turn a profit through streaming. In the world, there are two types of streaming. Interactive streaming and noninteractive streaming.
Interactive streaming services allow users to pick what they want to listen to and when they want to listen to it. An example of a service like this would be Spotify or apple music. Interactive streaming services will likely pay artist 3/10 of a penny per stream.
Noninteractive streaming services do not allow the listener to directly pick a song or album they want to listen too; rather they allow the listener to create a station from a song, album, or artist they like. Because noninteractive streaming services like Pandora don’t allow listeners to listen to a track multiple time on demand they may only pay artist 1/10th of a penny per stream.
While streaming can be difficult to enter into for indie artists it has been made easier through aggregate services like TuneCore and CD Baby that take a small fee for the distribution of their music to streaming services. When it comes to making money through streaming it is very important that artists register with RIAA’s Sound Exchanges which is responsible for the payout of royalties collected through streaming services to the record label who make 50%, the artist who make 45%, and the featured artist who makes 5%.