Image credit: Brett Jordan

Apple Music Adds Transparency To Their Model With A Letter They Sent To Artists, Labels, Publishers, and Other Stakeholders. Confirming That They Will Pay 1p Per Stream, 2-3 Times Spotify.

In the past couple of years streaming revenue has been a hot topic for musicians, artists, and industry heads within the music industry, In the last year alone we have seen Parliamentary panels and discussions in the UK and Spotify releasing ‘Loud & Clear’, a website designed to give more clarification and transparency on how their revenue to artists works. All of the said issues were brought into an even brighter spotlight with the pandemic putting a halt to live music across the world. As artists lost that key revenue they looked to sales and streaming, finding that perhaps the payout isn’t fair. 

Like Spotify, Apple Music is now hoping to clarify how their payouts work and how they are calculated. Recently the Wall Street Journal reported on a letter sent out by Apple Music that details Apple pay artists 1p per stream, 2-3 times more than its main competitor Spotify

The letter says: “As the discussion about streaming royalties continues, we believe it is important to share our values.” Adding: “We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring music in prime display space on its service.”

However, Apple does pay the same percentage of its royalties to labels and publishers as Spotify, which is roughly 52 cents on every dollar. Signed artists have to go through their labels which streaming services have no control over. Although it’s worth noting that Apple has a paid-only model which means the top-level amount is always greater than Spotify’s.

Spotify generates revenue from subscriptions and its ad-supported tier and pays ‘two-thirds of every dollar of revenue to the rights holder. It works out as a similar payout percentage (52%) but Spotify’s per-user (and per-stream) revenue baseline is far lower. 

Currently, Apple Music has 60 million Apple Music Subscribers (mostly US-based) whilst Spotify has a staggering 155 million Premium subscribers out of a total of 345 million active users. 

Spotify pays a larger amount in revenue to the music industry than Apple but only due to its higher amount of users. However, Spotify’s average per-stream payout rate is lower because the ad-free tier doesn’t generate as much revenue as the subscription does. 

Although the increase in pay for artists is great news and will be welcomed by the Union of Musicians and Allied Workers, it adds another layer of confusion for the artist. Hopefully, more information will be publicly and widely known. One thing is for sure, services such as RouteNote can help you navigate the streaming world and help you get paid fairly, find out more here.