Two weeks ago, streaming — subscription revenues in particular — was found to have delivered to the recording industry something it was waiting on for a long time… growth. (In the U.S., at least.) That the industry had seen revenues increase 8.1 percent over the prior year was reason enough to cheer, and more so that it had come from a sector that has so much room to deliver more. The writing was on the wall as to streaming's success prior to the RIAA's announcement; several months prior, it had become Warner Music Group's primary source of income.
Streaming has also drawn its fair share of criticism, sometimes deserved, sometimes less so. But one thing most who don't live in this world day in and day out can agree on is being completely baffled as to how it generates money for creators.
There's a good reason for that — the amount of money each artist receives from streaming, and the way they receive it, is entirely case-by-case, as Billboard explained some time ago. But that doesn't prevent us from having a basic understanding of the way this market is structured.
Jordan Bromley and Nicole Sollberger, a partner and associate respectively in the Music Group of Manatt, Phelps & Phillips, LLP decided to give it a go, and did a pretty great job of explaining (and hedging as necessary, and incorporating some edits from Billboard's in-house experts) how this plate of spaghetti gets made.