Apple Music pays artists a penny per stream, double that of Spotify

AppleInsider

Apple is writing to artists on Apple Music, saying it pays a penny per stream, and that 52% of subscription revenue goes to them via record labels.

Apple Music

Apple is to send a letter via its Apple Music for Artists app, telling musicians that it wants to detail just how its payments to them work. According to The Wall Street Journal, The letter is due to be sent today and comes as the UK is investigating how fair all streaming music services are to artists.

"As the discussion about streaming royalties continues, we believe it is important to share our values," Apple reportedly says in the letter seen by The Wall Street Journal. said in the letter. "We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay [for music being promoted]."

Apple's letter specifies that it pays 52% of all its subscription Apple Music revenues to the record labels. Spotify's payments are more complex, as that service includes both subscribers and an ad-supported free tier.

According to The Wall Street Journal, Spotify at times will pay approximately the same, or even slightly more, at 50% to 53%. However, on average, Spotify is paying around half of that Apple does -- per stream.

Overall, Spotify pays much more than Apple because it has 155 million paid subscribers, out of a total of 345 million total active users. In comparison, Apple rarely reveals subscriber numbers, saying only that in 2019 it passed 60 million.

In early 2020, Amazon reported that its music subscription services had 55 million subscribers.

Apple's letter to artists is not the first time that the company has tried to position itself as the best service for them. In February 2021, Apple Music's global director of Music Publishing, Elena Segal told a UK streaming music inquiry that the company wants to pay musicians fairly.

"Artists should be paid for their work," she said at the time. "Creators should be paid for their work. From our standpoint, the most important thing is to have a healthy overall creative ecosystem that's sustainable into the long term."

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pulseimages

A penny is fair?

rob53

pulseimages said:

A penny is fair?

Assume Apple has 60M subscribers and each plays one song per day. That's $600K/day. If I understand the article, 52% of that goes to the label but who knows how much actually goes to the artist (probably pennies with the label getting the majority of it). That's $312K/day or $113,880,000/yr with only one song per day per subscriber.

I'm sure people using Apple Music would listen on average to more than one song per day (365 songs per year) and I doubt there are 60M artists on Apple Music so calculating what each artist on average would get isn't easy but I could see 1 penny adding up pretty fast for many artists but also not making any money for many artists.

chadbag

pulseimages said:

A penny is fair?

That is for each play.  That adds up quickly.  The problem is that it is paid to the labels.   As has been noted, who knows how much of that reaches the actual artist.   Labels don’t have a stellar reputation when it comes to that.  

blastdoor

pulseimages said:

A penny is fair?

 Fine, you'll get nothing and like it!

blastdoor

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

Beats

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

When Apple Music launched I thought they would create an Apple Records for artists. This would have worked if they can pay the artists more on their platform.

I thought this would happen because Jimmy and Dre were employed. They are known for creating big artists and huge labels.

chadbag

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

The video streaming services never have the movie I am looking to watch available.  Always a pay-to-rent deal.   Even old movies from the 70s, 80s, 90s etc.  they have a ton of stuff but almost never the one I want to watch.   I have Netflix through my t-mobile account, Amazon Prime Video through my Amazon Prime account (whose sole purpose for me is cheap or free wicked fast delivery) and I have the Disney service I currently pay for (though I may drop it in the fall at renewal).   I’ve trialed Hulu but found it not any better than Netflix in having what I was looking for. 

That was a long winded way to say “I agree” with you.  

Beats

pulseimages said:

A penny is fair?

A penny is really high in the streaming world. Apple may be the highest of all platforms. 

igorsky

pulseimages said:

A penny is fair?

Certainly more fair than half a penny.

igorsky

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

Unfortunately the studios will never go for this.

AppleZulu

Beats said:

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

When Apple Music launched I thought they would create an Apple Records for artists. This would have worked if they can pay the artists more on their platform.

I thought this would happen because Jimmy and Dre were employed. They are known for creating big artists and huge labels.

1. Apple Records is the Beatles' label, created back in the 60s. They're not giving that up, which was made clear in litigation that had to be hammered out back when Apple computers first started entering the music arena and therefore potentially treading on the Beatles' trademark.

2. Apple Music launched as the streaming service version of iTunes, which is a store that carries music from all major labels, plus independents. There's not much reason for them to create their own vanity record label to compete with all that. They could perhaps have tried to grab some major artists for exclusive distribution rights, but that would sour deals they need to make with other major labels for the overall streaming service. There's too much conflict of interest built into trying to do both things, which would make the whole operation less competitive. 

CloudTalkin

rob53 said:

pulseimages said:

A penny is fair?

Assume Apple has 60M subscribers and each plays one song per day. That's $600K/day. If I understand the article, 52% of that goes to the label but who knows how much actually goes to the artist (probably pennies with the label getting the majority of it). That's $312K/day or $113,880,000/yr with only one song per day per subscriber.

I'm sure people using Apple Music would listen on average to more than one song per day (365 songs per year) and I doubt there are 60M artists on Apple Music so calculating what each artist on average would get isn't easy but I could see 1 penny adding up pretty fast for many artists but also not making any money for many artists.

Any math that illustrates what Apple pays also illustrates what Spotify pays as well.  155 million subscribers at 1 play per day at half a penny is $775K per day.  If, as claimed by WSJ, Spotify can sometimes pay as much as Apple sometimes pays, then we're talking about $1.55 million per day.  All this shows is at the tip of the spear, big payments are made regardless of the service.  At the tail end? Not so much.
Variety has a good article that sums up the inaccuracy of what you and I are doing: trying to make a direct comparison.  It's not really possible.  It's a short but decent read.
https://variety.com/2021/digital/news/apple-music-penny-per-stream-1234953179/
Highlighted: 

Apple says in the letter that it pays 52% of its subscription revenue to record labels; Spotify says it pays two-thirds of every dollar of revenue to rights holders, with 75% to 80% of that going to labels. That breaks down to 50 to 53 cents on the dollar, depending on agreements between the service and different labels, according to the WSJ.
Reps for Apple Music and Spotify declined Variety‘s requests for comment.
To a degree, these competing payment claims are largely a matter of dueling calculators: The comparisons aren’t really apples-to-apples, because Spotify generates significantly more revenue for the music industry than Apple Music due to its much larger user base and, thus, its much larger number of streams per month. The comparison is also complicated by the face that Spotify has a free tier that does not generate as much revenue as its paid service, although it has essentially been proven to be an effective on-ramp for the paid service. - Variety

baconstang

A penny per is pretty good.
But what you receive from the label totally depends on your contract with your label.

If you were getting screwed by your label before, you'll continue to be screwed until you can renegotiate your deal.

viclauyyc

pulseimages said:

A penny is fair?

You know the penny is for playing the song, not buying or selling the right, right?
Radio station often don’t pay anything to the record label.  

viclauyyc

AppleZulu said:

2. Apple Music launched as the streaming service version of iTunes, which is a store that carries music from all major labels, plus independents. There's not much reason for them to create their own vanity record label to compete with all that. They could perhaps have tried to grab some major artists for exclusive distribution rights, but that would sour deals they need to make with other major labels for the overall streaming service. There's too much conflict of interest built into trying to do both things, which would make the whole operation less competitive. 

The big record labels had tried to create their own steaming service in the beginning of MP3 era, failed miserably. No one will want to subscribe to a label company and only listen to the songs from the label. And there are tens of thousands of label out there. Not to mention the copyright and other rights are really messed up in the music world.

sounds good, doesn’t work. 

gatorguy

viclauyyc said:

pulseimages said:

A penny is fair?

You know the penny is for playing the song, not buying or selling the right, right?
Radio station often don’t pay anything to the record label.  

That's not at all true, and spoken by a former DJ in a top market.   I've done a lot of things during my lifetime.

If you're curious how here's a short 12 minute read for you.
https://soundcharts.com/blog/radio-royalties#:~:text=As we've mentioned earlier,is played on the radio.&text=So, for the American-based,paid performance royalties for airplay.

viclauyyc

gatorguy said:

viclauyyc said:

pulseimages said:

A penny is fair?

You know the penny is for playing the song, not buying or selling the right, right?
Radio station often don’t pay anything to the record label.  

That's not at all true, and spoken by a former DJ in a top market.   I've done a lot of things during my lifetime.

If you're curious how here's a short 12 minute read for you.
https://soundcharts.com/blog/radio-royalties#:~:text=As we've mentioned earlier,is played on the radio.&text=So, for the American-based,paid performance royalties for airplay.

I guess it is really depends on the market. Before internet, radio and tv station is pretty much the only way to promote your song to the mass. 

poisednoise

Regardless of the streaming service, be it Apple Music or Spotify, it's a terrible deal for the label and the artist, particularly for the classical artist, as the whole streaming market is predicated on repeat listenings... and you don't necessarily want to listen to Shostakovich's 8th string quartet 4 or 5 times a day. This is why a lot of the classical labels such as Hyperion and Gimmel don't allow their catalogue to be streamed. They get significantly more from a single CD sale than from hundreds of playings. 

IrishRhodesianKiwi

AppleZulu said:

Beats said:

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

When Apple Music launched I thought they would create an Apple Records for artists. This would have worked if they can pay the artists more on their platform.

I thought this would happen because Jimmy and Dre were employed. They are known for creating big artists and huge labels.

1. Apple Records is the Beatles' label, created back in the 60s. They're not giving that up, which was made clear in litigation that had to be hammered out back when Apple computers first started entering the music arena and therefore potentially treading on the Beatles' trademark.

2. Apple Music launched as the streaming service version of iTunes, which is a store that carries music from all major labels, plus independents. There's not much reason for them to create their own vanity record label to compete with all that. They could perhaps have tried to grab some major artists for exclusive distribution rights, but that would sour deals they need to make with other major labels for the overall streaming service. There's too much conflict of interest built into trying to do both things, which would make the whole operation less competitive. 

The problem Apple’s streaming service has with attracting mote subscribers to compete with Spotify, appears to me to be that, unlike Spotify, Apple Music wants to access my existing music library and replace it with their own versions. Ostensibly  replacing poor quality compressed versions with a higher quality version. But in practice Apple Music simply messed up my music collection  by confusing versions, messing up album names and artwork and simply removing songs it or artists it didn’t recognise. I loved the streaming service but it was a disaster for my existing library. Took me ages to fix. So unless they offer a simple streaming service like Spotify, without simultaneously trying to manage my existing music library, I won’t be subscribing. Does anyone know if they have fixed that problem?  

crowley

AppleZulu said:

Beats said:

blastdoor said:

It's such a shame that apple could not have done with TV/movies what they did with music. 

That is, access to almost ALL content at a reasonable price for users and fair payment to creators, with Apple doing a tad better than break even on the service, viewing it mostly as a means of attaching folks to the ecosystem. That would be so much better than all of these separate services. 

When Apple Music launched I thought they would create an Apple Records for artists. This would have worked if they can pay the artists more on their platform.

I thought this would happen because Jimmy and Dre were employed. They are known for creating big artists and huge labels.

1. Apple Records is the Beatles' label, created back in the 60s. They're not giving that up, which was made clear in litigation that had to be hammered out back when Apple computers first started entering the music arena and therefore potentially treading on the Beatles' trademark.

Apple own all of the trademarks to the name Apple and license them back to Apple Corps.  If Apple wanted to set up a record label they'd be fine to do so.