In plain English

When platforms like Spotify or Apple Music pay the label for streams, the artist receives only their royalty rate applied to the label's net receipts, not a direct per-stream payment. Labels may also apply legacy deductions ('new media' rates at 75% of standard) that were written before streaming existed and were never updated.

Why it matters

Streaming is now the dominant revenue format. A 1% effective rate difference on streaming income compounds enormously across millions of streams. Legacy 'new media' clauses can reduce your streaming income by 25% permanently.

Where it can land

The same clause is drafted three ways. These are the positions we see, worst first, so you can tell at a glance which one is in front of you.

Read next

• Recording Royalty RateThe percentage of sales revenue paid to the artist after deductions.
• Royalty BaseThe price your royalty percentage is applied to, often reduced by deductions before the percentage is even calculated.
• Accounting PeriodsHow often the label calculates and pays royalties, and how long they have after each period to actually pay.
• Audit RightsYour right to inspect the label's financial records to verify royalty calculations are correct.