Concepts

How Royalties Work in Velveteen

Updated June 10, 2026

The short answer

Every stream generates two types of royalties: master royalties (for the recording) and publishing royalties (for the composition). Velveteen handles master royalties: collecting DSP reports, reconciling earnings, and paying out to shareholders you define on each track. Publishing royalties flow separately through PROs and are outside Velveteen's scope.

Royalties are the most important number in your catalog. Velveteen tracks every dollar from the moment a DSP reports it to the moment it reaches your account. Understanding how that pipeline works and where the delays come from means fewer surprises on statement day.

Two types of royalties

Every stream or download generates royalties on two separate tracks: one for the recording, one for the song itself. These are legally distinct, collected by different parties, and paid through different systems. Velveteen handles one of them.

Master royalties

Paid to the owner of the recording, typically the label. When a listener streams your track, the DSP pays a per-stream rate to whoever owns the master. This is what Velveteen ingests, reconciles, and distributes to your shareholders.

Publishing royalties

Paid to the owner of the composition: the songwriter or their publisher. These flow through PROs (like ASCAP, BMI, SOCAN) and mechanical rights organizations. Velveteen stores your publishing metadata but does not collect or distribute publishing royalties directly.

If you wrote, recorded, and are releasing your own music, both streams of royalties are yours. But you need separate systems to collect them. Velveteen handles the master side. To collect publishing royalties, you need to register with a PRO and, depending on your territory, a mechanical licensing body.

Tip

Adding a publisher entity to your track credits in Velveteen ensures DSPs have accurate composition metadata, which makes downstream collection through a PRO more reliable. It does not trigger any publishing royalty collection on its own.

Shareholders and splits

Master royalties are distributed to shareholders: the people who hold a share of a track and are owed a percentage of its earnings. Shares are assigned per track, not per release. Each track on a release carries its own set of shareholders and its own splits. That lets a featured artist or a different producer take a cut on one track without touching the rest of the release.

Splits are expressed as percentages and must total exactly 100% on each track. A solo artist might be the only shareholder at 100%. A track with a producer deal might split 80% to the artist and 20% to the producer, while the next track on the same release is split differently. Whatever the arrangement, every percentage point on each track must be accounted for.

Track, Royalties: shareholder splits (per track)

Babbage80%

Jane Smith (Producer)20%

Splits must total 100%

Shareholders are identified by email. If a shareholder already has a Velveteen account with payout preferences configured, their earnings are credited automatically as statements are ingested. If they haven't signed up yet, their share accumulates and is held until they create an account. You can see each shareholder's payout readiness from the track's royalties tab.

Heads up

Set your splits before the release is delivered to DSPs. Some DSPs lock the splits they received at delivery and do not accept updates after the fact. A split change in Velveteen will apply to future ingestion cycles but cannot rewrite what a DSP already recorded.

How Velveteen ingests royalties

DSPs do not pay in real time. They collect streaming data, process it internally, and issue royalty reports on a delay, typically 2 to 3 months after the streams occur. Velveteen ingests these reports as they arrive, reconciles the earnings against your release catalog, and credits each shareholder's balance according to their split.

1
DSP reports arrive
Each DSP sends royalty statements on their own schedule: monthly for some, quarterly for others. A single release can have statements arriving from Spotify, Apple Music, Amazon, and others at different times.
2
Velveteen ingests and reconciles
Incoming reports are matched against your release catalog. Earnings are attributed to the correct release, then split according to the shareholder percentages on record. If a DSP's data doesn't match an expected release, it gets flagged for review.
3
Earnings appear in your balance
Reconciled earnings show up in your dashboard balance. Once your balance is above the minimum threshold, Velveteen will automatically queue a payout on the 16th of each month. You can also request one manually at any time.

Because of the 2 to 3 month reporting delay, your dashboard will typically show earnings from streams that happened months ago. This is normal and consistent across the industry. It is how DSPs operate, not a Velveteen delay.

Tip

If a statement period's earnings look lower than expected, check whether all DSPs have reported yet. Velveteen notes the ingestion date on each statement, so you can see which DSPs have filed and which are still outstanding for a given period.

Payouts and statements

Earnings accumulate in your balance as DSP reports are ingested. On the 16th of each month, Velveteen automatically queues a payout for every account whose balance is above the minimum threshold. You can also request a payout manually at any time once you are above the minimum. Earnings below the threshold stay in your balance and keep accumulating until the next monthly cycle or until you request manually.

Velveteen generates a per-shareholder statement for each monthly reporting period. Each statement breaks earnings down by track, listed by title and DSP platform, so every line ties to a specific recording on a specific platform. For each track, earnings are divided among shareholders according to their shares, and the statement shows each shareholder's percentage and the net amount transferred. Shareholders can access their own statements from their account. They do not need to ask you for a breakdown.

Statements are also available for download as PDFs for accounting and tax purposes. Each shareholder views their own earnings and statements in their own dashboard.

Tip

Payout preferences (PayPal or Interac e-Transfer, Canada only) are set per shareholder in their account settings. Minimums are $20 USD for PayPal and $50 USD for Interac e-Transfer; there are no fees. Each shareholder controls their own payout destination. As the label owner, you can see payout readiness but cannot set another user's payout details on their behalf.

Frequently asked questions

When do I get paid?+

On a monthly cycle, and you can also trigger one manually. DSPs report streaming data 2 to 3 months after the streams occur, so there is always a lag between when your music is played and when earnings appear in your balance. Once ingested and reconciled, earnings accumulate in your balance. On the 16th of each month, Velveteen automatically queues a payout for every account whose balance is above the minimum threshold ($20 for PayPal; $50 for Interac e-Transfer). You can also request a payout manually at any time once you're above the minimum. You don't have to wait for the monthly cycle.

Can I change my royalty splits after a release goes live?+

You can update splits in Velveteen at any time, but some DSPs lock the metadata they received at the time of delivery. A split change in Velveteen will apply to future ingestion cycles and any DSPs that accept updated metadata. It cannot retroactively change what a DSP already processed. Set your splits correctly before delivery whenever possible.

What's the difference between master royalties and publishing royalties?+

Master royalties compensate the owner of the recording, usually the label. Publishing royalties compensate the owner of the composition: the songwriter or their publisher. A single stream triggers both. Velveteen tracks and pays out master royalties. Publishing royalties are collected separately through PROs like ASCAP, BMI, or SOCAN, and mechanical rights organizations. Velveteen stores your publishing metadata to make that collection easier, but does not administer publishing royalties directly.

Do collaborators get paid directly by Velveteen?+

Shareholders are identified by email and assigned per track. If a shareholder already has a Velveteen account with payout preferences configured, their earnings are credited automatically. If they haven't signed up yet, their share accumulates and is held until they do. You can view each shareholder's payout readiness from the track's royalties tab.

Why do my streaming numbers not match my royalty statement?+

Several factors explain the gap. DSPs report at different rates, some monthly, some quarterly, so not all streams from a period appear in the same statement. Some DSPs also apply per-stream rates that vary by territory, subscription tier, and their own internal adjustments. Velveteen reports exactly what DSPs remit; if a number looks wrong, the first step is checking whether all DSP reports for that period have been ingested.