Apple says it pays a penny per stream, but it can dip lower. Spotify pays half to two thirds of a penny, but it streams more.
From “Apple Music Reveals How Much It Pays When You Stream a Song” posted Friday:
Apple Music told artists it pays a penny per stream, according to a letter viewed by The Wall Street Journal.
The disclosure, made in a letter to artists delivered Friday via the service’s artist dashboard and sent to labels and publishers, reflects music-streaming services’ increasing efforts to show they are artist-friendly. Apple Inc.’s move can be seen as a riposte to Spotify, which last month shared some details of how it pays the music industry for streams on its platform.
Apple’s penny-per-stream payment structure—which music-industry experts say can dip lower—is roughly double what Spotify, the world’s largest music-streaming service, pays music-rights holders per stream. Spotify pays an average of about one-third to one-half penny per stream, though its larger user base generates many more streams. Apple’s payments come out of monthly subscription revenue from users…
Artists aren’t paid directly by streaming services, so a single play of a song doesn’t result in a penny going into that artist’s account. Instead, streaming services pay royalties to rights holders—a group that includes labels, publishers and other distributors—which in turn pay artists based on their recording, publishing and distribution agreements. Both Apple and Spotify pay rights holders based on the share of total streams their artists garner on each service.
Yet artists cite the per-stream pay rate as an indicator of their earnings. Major labels say the average monthly streams per user is a better measure of the streaming economy, and growing numbers of streams mean more money coming in for artists. Both Spotify and Apple, they say, are at or near the 1,000-streams-per-listener monthly benchmark that is seen as a success.
In the letter, Apple says it pays 52% of subscription revenue, or 52 cents of every dollar, to all record labels. Spotify, which generates revenue both from subscriptions and its free ad-supported tier, says it pays two-thirds of every dollar of revenue to rights holders, with 75% to 80% of that going to labels—translating to 50 to 53 cents on the dollar, depending on agreements between the service and different labels.
My take: Lost me.