DSP stands for Digital Service Provider — it is the industry term for streaming platforms and digital stores. Understanding how DSPs work helps you understand where your royalties come from and how they are calculated.
What DSP stands for
DSP stands for Digital Service Provider. It is the music industry's collective term for any platform that streams or sells music digitally to consumers. Spotify, Apple Music, Amazon Music, Tidal, Deezer, YouTube Music, Pandora, and Beatport are all DSPs. So are digital download stores like iTunes and Bandcamp. The term is used throughout the music industry — in distribution agreements, royalty statements, publishing contracts, and collection society reports — to refer to this category of platform collectively.
How DSPs licence music
DSPs do not own the music they make available. They licence it from rights holders — which means they must have agreements in place with both recording rights holders (labels and artists who own masters) and publishing rights holders (songwriters, composers, and publishers). The recording licence is typically handled through direct agreements with major distributors and labels. The publishing licence — covering the mechanical right to reproduce compositions — is typically handled through blanket agreements with collection societies like MCPS in the UK.
What DSPs pay and to whom
Each stream on a DSP generates two types of royalty from the composition alone, plus a recording royalty:
- Recording royalty — paid to the owner of the master recording (artist or label), distributed via the distributor
- Performance royalty — paid to the songwriter/composer via the PRO (PRS for Music in the UK)
- Mechanical royalty — paid to the songwriter/composer via the mechanical rights society (MCPS in the UK)
How DSP royalty rates work
DSPs do not pay a fixed per-stream rate. They operate on a pro-rata model: all subscription and advertising revenue is pooled, and each rights holder receives a share based on what proportion of total streams their music accounts for in a given period. This means the effective per-stream rate varies month to month depending on the total pool size and total stream volume. Published per-stream averages — typically cited at $0.003–$0.005 for major subscription platforms — are averages across this variable calculation, not fixed rates.
The difference between major and minor DSPs
Spotify, Apple Music, and Amazon Music account for the large majority of streaming income for most artists. The remaining long tail of DSPs — regional platforms like Anghami (Middle East), Boomplay (Africa), JioSaavn (India), and Melon (Korea) — can be significant for artists with audience concentration in those regions. A distribution service that includes these regional platforms alongside the major three expands your total royalty footprint, particularly if your music has international reach.
DSPs and editorial playlists
Each major DSP has an in-house editorial team that curates playlists — New Music Friday on Spotify, New Music Daily on Apple Music, and equivalents across other platforms. Editorial placement on these playlists is one of the most valuable outcomes of a distribution strategy. Each DSP has its own pitching process: Spotify provides a self-service pitching tool through Spotify for Artists; Apple Music editorial submissions are handled primarily through distributors and labels with direct relationships.
DSPs and the data they provide
DSPs provide artists and their representatives with streaming data through their artist portal tools — Spotify for Artists, Apple Music for Artists, Amazon Music for Artists. This data includes stream counts by track, territory, and listener demographics. It is useful for understanding your audience but it is not a royalty statement — the actual royalty calculations are done by your distributor and collection societies, not directly on the DSP platform. If your DSP data shows significant streaming activity that is not reflected in your royalty statements, that is a signal to audit your registration and distribution setup.
If you have questions about how your music is currently distributed and whether you are maximising your income across all DSPs, our free Catalog Assessment will review your setup and identify any gaps.