How do artists make money on streaming apps?

A per-listen rate is paid to the label that holds the right to the work. The label will then disburse whatever percentage to the artist. Of course the percentage the artist gets will depend on their particular contract with the label. But most artists have never received substantial sums from recorded music anyway. In most cases that CD you buy for $15, the band might receive $0.25 to divide between the five of them. And that’s only after the label has “recouped” their expenses for the album’s recording, production, artwork, promotion, etc plus whatever money the label has advanced the band.

The label gets their slice, the distributor gets their slice, the retailer gets its slice, the record producer gets his slice, the band’s manager gets his slice. The band, if they’re lucky, get a few crumbs.

@Darth_Algar I usually buy the CD directly from the band if I can, but you’re description of the economics of CDs is absolutely correct. I know some smaller bands that have gone to Pledge Music to self-produce their CDs so they can keep some of the cost.

Yeah, one of my favorite examples is the Canadian band Voivod. They did three albums for RCA (now owned by Universal Music) back in the late 80s-early 90s and, as far as I know, have never seen one cent from those albums because the label claims to have never recouped its investment.

That whole label thing was a revelation to me a few months ago. I was chatting with one of the music engineers of Caravan (who happens to be the band leader’s son). I told him that I saw some out-of-print Caravan CDs at a record store and I wanted him to know in case they were pirated. He told me the CDs were legit, but the record company probably had released more to recoup costs. The band never saw a penny from the production of the album.