Behind the Scenes of Music 

Introduction

The music industry has undergone a massive transformation in the digital age. With the rise of streaming platforms like Spotify, Apple Music, and YouTube Music, access to music has never been easier. But how does this convenience impact the artists who create the music we love? While streaming services have changed the way we listen, they have also introduced a complex financial model that often leaves artists with only a small fraction of the revenue. This blog post explores the business side of streaming through my top three popular songs: Ni Me Conozco by Rauw Alejandro, Die With a Smile by Bruno Mars, and Baile Inolvidable by Bad Bunny.

Photo Link: https://pumpyoursound.com/f/pys/bad-bunny-ft-rauw-alejandro-party-cumbia-edit/134028 

To understand where and how the money flows, we have to identify the labels behind my favorite songs. In this case the three songs I mentioned above all work with different labels. For instance Rauw Alejandro whom created the song Ni Me Conozco works with Sony Music Latin label who is owned by Sony Music Entertainment. Bruno Mars who created the song Die With a Smile works with the Atlantic Records which is a subsidiary of Warner Music Group Label which is owned by Access Industries. Lastly, the artist Bad Bunny who created Baile Inolvidable works with an independent label named Rimas Entertainment who is owned by Jhay Cortez and Bad Bunny himself. Major labels like Sony Music Latin and Atlantic Records operate under multinational corporations that control much of the global music industry, while independent labels like Rimas Entertainment offer artists more control but often less financial backing.

Photo link: https://www.linkedin.com/company/rimasmusic 

Breaking Down the Numbers

Streaming services generate revenue through subscriptions and advertisements. However, the big question is how much of that money actually reaches the artists? Every artist chooses to work with a different label, therefore effecting the profits and flexibility they have within their contracts. The average per-stream payout across major platforms is around $0.003 - $0.005 per stream. The revenue is split among multiple stakeholders, including the streaming platform, the record label, the songwriter, the producer, and the artist. For Rauw Alejandro's "Ni Me Conozco" song he gets $0.0028 per stream. Since Rauw Alejandro is signed to a major label, the label usually takes a portion of that, typically around 20-30%, so the label may get $0.00084 to $0.00056 per stream. For Bruno Mars' "Die With a Smile" he can receive $0.0028 per stream. Atlantic Records typically takes around 20-30% of that, so the label would get around $0.00084 to $0.00056 per stream. For Bad Bunny's "Baile Inolvidable" he would receive $0.0028 per stream. Since Rima Entertainment is an independent label, Bad Bunny keeps a larger portion, but the label still gets around 10-20%. Rimas would receive approximately $0.00028 to $0.00056 per stream.

According to the article How Spotify Works: Business Model and Revenue Streams, Spotify operates on a freemium model where only premium users contribute directly to artist payouts. Similarly, The 4 Types of Music Subscription Models in 2019 explains how different platforms distribute royalties based on user listening habits rather than a fixed rate per stream. Additionally, the NYT overview of music streaming highlights how streaming has become the dominant mode of music consumption despite ongoing concerns about fair compensation for artists.

Photo link: https://www.tmz.com/2025/01/29/bruno-mars-jokes-gambling-debt-rumor/ 

Streaming services have undeniably transformed the way music is consumed and monetized, bringing both advantages and challenges. On the one hand, listeners enjoy unlimited access to a vast library of music for a low monthly fee. However, many artists struggle to earn a fair share of the revenue generated by these platforms. While streaming has opened up opportunities for independent musicians, major labels still dominate the industry, controlling royalties and artist contracts, which shifts the power in their favor. In response to the relatively low payouts from streaming, artists increasingly rely on alternative revenue streams such as touring, merchandise sales, and brand partnerships. Additionally, the rise of algorithm driven platforms has made it harder for smaller artists to gain exposure unless their work goes viral, as these algorithms tend to favor established names and trends.

Photo link: https://www.tiktok.com/discover/die-with-a-smile-lyrics 

Conclusion

Music streaming has made it easier than ever to listen to our favorite songs, but it has also reshaped the industry in ways that favor corporations over creators. While independent artists like Bad Bunny may have more control over their earnings, those signed to major labels often receive only a small cut of the revenue. As fans, we can support our favorite musicians by purchasing physical albums, attending concerts, and buying merchandise making sure that the artists we love can continue making the music we enjoy.

What are your thoughts on music streaming? Do you think artists are being fairly compensated?