Understanding Royalties and Payments in Music Distribution Services

For independent artists, royalties are music revenue. But many don’t understand how digital music distribution impacts their earnings. Without knowing how payouts work, artists risk losing money to commissions, delays or restrictions.

Royalty Exchange clarifies that understanding royalty payment structures is crucial for effectively managing your music revenue. Let’s break down how music distribution services handle royalties and what to consider when choosing a music distributor.

What Are Royalties?

Every time your music is streamed, downloaded or licensed, you earn royalties. These come from different sources depending on how your music is used.

Types of Royalties

• Mechanical royalties. Earned from streams and downloads on Spotify and Apple Music.
  
• Performance royalties. Collected when your song is played on radio, TV or in public spaces.
  
• Sync royalties. Paid when your track is used in films, commercials or TV shows.
  
• Digital performance royalties. Earned from streaming via Pandora and collected by SoundExchange.
  

A music distribution platform should collect all eligible royalties on your behalf.

How Music Distribution Platforms Handle Royalties

Not all music distribution services process royalties the same way. Some let artists keep 100% of their earnings, others take a percentage.

Royalty Payment Models

• Flat-fee distributors. DistroKid, TuneCore and Ditto charge annual fees but you keep all royalties.
  
• Commission-based models. CD Baby and RouteNote Free take a cut of your earnings, reducing your total payout.
  
• Pay-per-release option. MusicAlligator lets you pay only when you release music and keep 100% of your royalties.
  

Example: if you earn $10,000 from streaming, a revenue-sharing model could take 15-30%, while MusicAlligator lets you keep it all.

Payment Cycles and Minimum Payouts

Even if you earn royalties, how soon you get paid depends on your distributor. Some platforms delay payments or require high minimums.

What to Look for in a Payment System

• Payout frequency. Some distributors, like TuneCore and DistroKid, pay monthly, others delay payments for up to 90 days.
  
• Minimum withdrawal limits. Some platforms require earnings to reach $50-$100 before allowing withdrawals.
  
• Faster, flexible payouts. MusicAlligator pays quickly with no minimum thresholds.
  

Choosing a music distributor with transparent, regular payouts means you get paid without delays.

Earn More with the Right Distributor

A good music distribution platform does more than upload your tracks — it helps you keep more of your money.

What Makes a Good Distribution Service?

• 100% royalty retention. No commission deductions.
  
• All royalties collected. Streaming, downloads, licensing.
  
• Fast payments. No hidden delays or minimums.
  
• Flexible pricing. Pay-per-release model instead of annual fees.
  

Artists who choose a transparent distributor keep more of their income and get paid faster.

Conclusion: Keep What You Earn

Royalties are music revenue for musicians, but understanding how digital music distribution affects payouts is key. Some platforms take unnecessary commission, impose minimums or delay payments.

If you want full control of your royalties, fast payouts and transparent pricing, MusicAlligator is the way to go. Unlike subscription-based services, it lets you pay only when you release music and keep 100% of your earnings.

The secret to earning more? Choose a distributor that protects your royalties, not takes from them.