Where does the money you pay for your streaming subscription go?

In principle, digitalization and making music available to the public via the internet seemed like a good idea. If you are not interested in the graphic and/or conceptual part of an album, you can listen to what you want immediately and without taking up space on your shelf or on your hard drive. Obviously paying a small amount of money for it, amount that is supposed to go to the artists you listen to.

Music has been mostly distributed in this digital form for a long time. And for some time now, distribution platforms such as Spotify, Apple or Deezer have monopolized virtually all digital broadcasting. But if we analyze the payments to artists of these companies, the problem arises: the payments to artists of non-massive recognition are ridiculous, whether or not they have a sufficient number of users who regularly listen to their songs.

Non-mass recognition artists need digital distribution on large platforms to prove that they "exist" even if they receive ridiculous payments for listening to their songs. There are programmers and music journalists that the first thing they do to visualize the potential of an artist is to see how many listeners she has.

What are the factors that make small artists charge so little from the listening of their listeners on digital platforms?

The two factors that influence non-massive artists to receive paltry payments for listening to their songs are:

  1. The way of accounting used by the big streaming services: The money paid on a subscription doesn't go directly to the artists you're listening to. Instead, the money goes into a giant global exchange and is distributed to artists based on the number of streams they accumulate. Even if you personally never listen to them. You may hate the music of Ed Sheeran or Bad Bunny, but you're still paying them for it. 
  2. The fact - inherited from times when record companies invested a lot of resources in manufacturing a physical object (LP, Cassette or CD), distributing it to stores, recovering and recycling unsold copies and also promoting artists - that the bulk of the sales were for the label, usually leaving 10% for the artist. In the digital realm, all that investment that justified a high percentage of PVP disappears, but the percentages remain the same: 90% label/10% artist.

Surely it is complicated to list and manage the listening of let's say 10 million subscribers. Although with the metadata inserted in the digital file that carries the music, it is not impossible. But if not even authors' societies do it (most of them follow the same general stock exchange system, explained above in point 1) how are we going to require private companies to do it?

The option in a world where there are no physical limits is to create distributors that have fairer systems. And that has difficulties, especially when it comes to publicizing these services, but as soon as some important artists get fed up with the occult in their payments and go to these new distributors, more and more people will know about them. This will allow them to expand the market.

En este artículo de THE GUARDIAN, se describe la situación bastante acertadamente y se mencionan otras plataformas de distribución musical online, con políticas de pagos mucho más igualitarias.

'Spotify is selling ads, not music': How to stream ethically»

Two articles in Spanish explaining the same problem:

Artists ask for "at least" 80% of the income for their streaming music

Justifay, the cooperative that seeks a fair distribution of income in streaming music