How do streaming services pay musicians for their songs?

Streaming services like Spotify and Apple Music pay rights holders through a royalty system based on the number of streams a song receives. The platform collects subscription fees and advertising revenue, then distributes a percentage of that pool to record labels, publishers, and distributors based on each song's share of total streams on the platform. The actual money reaching musicians depends heavily on their contracts. Artists signed to major labels typically receive only a fraction of what the label collects. Independent artists keep more but must go through distributors. Rates vary by platform but generally amount to roughly $0.003 to $0.005 per stream. This means an artist needs millions of streams to earn significant income, which is why many musicians rely on touring and merchandise to supplement streaming revenue.