Are you really making a profit from your recordings on streaming?
Let's walk through the simple—but rarely seen—income statement of your streaming royalties.
This is not accounting/financial advice!
I'll use DistroKid today because it's common and it allows us to work with real numbers. Contact me if you want to try it with another digital distributor.
There are only two real costs in distributing your recordings here.
First there's the cost of the service. Let's call it 35 USD to use DistroKid this year.
Then there's payment fees. For DistroKid via PayPal, it's currently 2% + 1 USD.
If you're a simple solo operator, you can add up the costs now—that's it. You'll need to make 35 + 1 = 36 USD this year, and you keep 98 cents of every dollar (2% fee).
So your break-even point is to make about 37 dollars USD this year in royalties through your DistroKid.
But your real figure might be higher than that. Do you share the royalties? If so, divide that break-even point by your percentage share. Will you convert the currency to your local one? That'll add to the fee, maybe pushing it up to 5%.
My own break-even point, this year, is: