Quarterly distributions explained. How money reaches your account. What to expect.
Distributions happen on a quarterly calendar aligned with the music industry standard:
Q1
Jan-Mar
Paid April 30
Q2
Apr-Jun
Paid July 31
Q3
Jul-Sep
Paid Oct 31
Q4
Oct-Dec
Paid Jan 31
First distribution: 3 months after funding close (the artist gets 60 days to deliver, then royalties start flowing).
Spotify, Apple Music, YouTube, TikTok, etc. send royalties to the artist's distributor (DistroKid, CD Baby, TuneCore, etc.). This happens in real-time or near real-time.
Continuous
The distributor aggregates earnings and sends a monthly statement to the artist showing streams, revenue, and breakdown by platform. This is forwarded to Artist Exchange.
Monthly (end of month)
Artist Exchange verifies the numbers against the distributor's statement and cross-checks with the contract. We make sure everything matches. We also check for fraud or anomalies.
Within 5 days of month-end
We apply your ownership percentage to the verified revenue. $10,000 in Q1 revenue times your 0.02% stake equals your $2.00 distribution. We send you a detailed breakdown.
Within 10 days of month-end
Your distribution is sent via ACH (bank transfer) or payment method you chose during setup. It hits your account in 3-5 business days.
Latest by quarter-end + 10 days
QUARTERLY EARNINGS STATEMENT
Free and default option. Money goes to your linked bank account. Takes 3-5 business days.
Faster domestic transfer. $15 fee per transaction. Usually arrives same day.
For non-US bank accounts. Low fee (~1.5%). Competitive exchange rates if international.
Available in select countries. PayPal takes its standard fee. Instant availability in PayPal balance.
There is a minimum payout threshold: $0.25 per distribution.
If your quarterly distribution is less than $0.25, it rolls over and accumulates into the next quarter. Once it reaches $0.25 (or higher), it pays out.
Example: You own 0.001% of a project that generates $100/quarter. Your payout is $0.01/quarter. This will accumulate for 25 quarters (about 6 years) before hitting payout. This is why diversification matters.
Yes. Quarterly payouts are taxable as ordinary income in the year you receive them. You should set aside roughly 20-30% of each distribution for taxes (varies by location and income bracket).
Yes. Artist Exchange sends a 1099-NEC at year end documenting all distributions paid to you in the calendar year. Use this for your tax return.
Yes. If an investment goes to zero (artist stops and project generates no more royalties), you can claim a capital loss. Keep records. Talk to a tax professional about wash-sale rules.
Distributions are subject to state income tax in your state of residence. We handle federal 1099 reporting; state taxes are your responsibility.
International investors are subject to US tax withholding (typically 30% unless a tax treaty applies). We coordinate with tax professionals to ensure compliance. Consult your local tax authority.
Can you automatically reinvest your distributions into new artist offerings?
Coming soon. Currently, distributions go to your bank account. Once secondary trading launches, you will be able to use your account balance to invest directly without a bank transfer.