Report claims Apple Music pays more to record labels in royalties per stream than Spotify

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  • Reply 21 of 27
    qwweraqwwera Posts: 263member
    bitmod said:
    qwwera said:
    If this is verified good for Apple and I will swiftly cancel my subscription to Spotify and switch over to Apple Music.
    Good luck with that.
    If you want to go by an 'unnamed indie label' with a measly 150 albums .

    Their alternative is nobody ever hears about them ever or they can fork out tens of thousands to make cd's - which nobody buys anymore - tens of thousands more to market and distribute those cd's. To get what? 30 cents/disc.

    There are some songs i've streamed over 100 times. The artist gets .73 cents for that.
    I can think of one artist who's 9 track album I have streamed well over 100 times. Thats $6. $6 they otherwise would never have had. I've turned many friends on to this artist as well.  So they have made a lot of money they otherwise would never have had with minimal investment and beholden to a record label for 6 years...
    I'm not sure I understand what you're saying? Are you saying Spotify is more indie band friendly?
  • Reply 22 of 27
    gatorguygatorguy Posts: 20,267member
    davidw said:
    gatorguy said:
    KT Glitz said:
    It's not surprising to be honest. I am a musician and I receive more in royalties per play through Apple than I do through Spotify. Spotify are the worst company for offering the best deal to the people they are giving a platform to so I can well believe that the record labels also get a bad deal. There is NO defence for Spotify to be ripping off musicians and labels when Apple can give a far better deal. Spotify are feeling the pressure now from the place where they once had an exclusive platform to do what they want but if they don't wise up then they are going to struggle. The actual figure that Spotify pay per stream is between $0.006 and $0.0084 so you have to have a massive amount of streams to get any return as an artist!
    Both Apple and Spotify claim to be paying out 70% of their streaming revenues back to the IP owner. As I read it the difference in the per-stream figures between the two companies is not  one is willing to pay more but that the number of streams per Spotify subscriber is greater than the number of streams per Apple subscriber. Both paying the same 70% out (Apple may still be paying 71% but I don't think so) but on a different number of plays. 

    "All numbers are the result of taking the total amount of revenue and dividing it by the total number of streams to produce a net rate per stream. As streaming rates vary (based upon revenue vs consumption) this is the only real way to have a reasonable benchmark. Spotify pays out (they say) 70% of (recognized?) revenues to rights holders. The more streams there are, the less each stream is worth, unless the revenues grow faster than streaming consumption. But that hasn’t happened yet."


    But you have to remember that that 70% of the pot is not a constant just based on the number of subscribers. If Apple has 20M subscribers but each subscriber pays and average of $9.00 and Spotify has 30M subscribers but each subscriber pays an average of $6.00, the pot would be the same for each company (70% of $180M). (Which can happen due to how many subscribers are in family plans or paying student discounts.) But Spotify would have 10M more people streaming. So its not just the number of streams per subscriber that affects the per stream pay out rate to the Music Labels, its also the amount each subscriber pay for their subscription.  If each Apple subscriber stream at the same rate as each Spotify subscriber, Apple would end up paying more per stream than Spotify (based on this scenario). And subscribers with student discount or under a family plan would be paying out less per stream than a single subscriber paying regular subscription cost, if they all stream at the same rate.    
    You got it!

    Apply this to your individual subscription. Pay Apple $15 for a family plan. $10.50 of that will be going to song rights owners. If only one single song was streamed the entire month then your $10.50 would presumably go to the owner of that single song. But if 4 family members each used Apple Music for three hours every day, totaling 12hr per day of streaming, that would come out to around 6500 individual streams give or take. Now how much is each one of your song plays worth? Far less than a penny, .0016.

    Of course Apple doesn't isolate your individual subscription so your $10.50 would not actually go to one single song owner.  But you get the gist of it. 
    edited January 2017
  • Reply 23 of 27
    cali said:
    Something is obviously wrong. What a mess.

    Youtube isn't helping at all. Almost all teens stream free and though illegal uploads. 

    This. And not just teens. Google likes to pretend they're doing something about copyright infringement on YouTube but they're not. The few people I know who use YouTube as their music/movie player all say the same thing: I can find whatever music or shows I want. If YouTube takes it down then someone else puts up another one. It's always available from somebody. 

    Yeah! Why the f*** am I able to find full albums on YouTube? Google's policy on intellectual property is almost as bad as its policy on an individual's privacy.
  • Reply 24 of 27
    gatorguy said:
    bitmod said:
    qwwera said:
    If this is verified good for Apple and I will swiftly cancel my subscription to Spotify and switch over to Apple Music.
    Good luck with that.
    If you want to go by an 'unnamed indie label' with a measly 150 albums .

    Their alternative is nobody ever hears about them ever or they can fork out tens of thousands to make cd's - which nobody buys anymore - tens of thousands more to market and distribute those cd's. To get what? 30 cents/disc.

    There are some songs i've streamed over 100 times. The artist gets .73 cents for that.
    I can think of one artist who's 9 track album I have streamed well over 100 times. Thats $6. $6 they otherwise would never have had. I've turned many friends on to this artist as well.  So they have made a lot of money they otherwise would never have had with minimal investment and beholden to a record label for 6 years...
    Song streaming payouts don't work the way you and some others here believe they do. The pot of money is fixed, so as the number of songs streamed by you goes up the payout per stream from your subscription goes down. Always remember that a fixed 70% of your Apple Music subscription (which seems to be an industry standard now) is used to pay the owners and songwriters for every song you streamed, and even then may not be and often aren't the artist/performer. There is not a guaranteed payout per play, they all take a share of a fixed percentage of the pot. The only ones guaranteed a big chunk of your subscription every month is the company providing the streaming. 

    https://thetrichordist.com/2014/11/12/the-streaming-price-bible-spotify-youtube-and-what-1-million-plays-means-to-you/


    Interesting. I was wondering how Apple paid for songs I downloaded on Apple Music, that I haven't bought on iTMS. This makes sense.


    Seems pretty unfair to the artists though. Not everyone can afford to release $150+ box sets and special editions to pad out their income.

  • Reply 25 of 27
    gatorguygatorguy Posts: 20,267member
    cali said:
    Something is obviously wrong. What a mess.

    Youtube isn't helping at all. Almost all teens stream free and though illegal uploads. 

    This. And not just teens. Google likes to pretend they're doing something about copyright infringement on YouTube but they're not. The few people I know who use YouTube as their music/movie player all say the same thing: I can find whatever music or shows I want. If YouTube takes it down then someone else puts up another one. It's always available from somebody. 

    Yeah! Why the f*** am I able to find full albums on YouTube? Google's policy on intellectual property is almost as bad as its policy on an individual's privacy.
    Generally because the property owner has agreed to it and is being paid for it whether it was uploaded directly by the artist/songwriter/producer or by a third party. About $1Billion was paid out to the music industry last year by YouTube. 

    Ericthehalfbee's claiming Youtube doesn't do anything about copyright violations is simply a claim from a position of ignorance I would assume rather than intentional FUD. On the contrary abusers of YouTube's copyright notice/takedown system have become a big problem. The first link explains how YouTube attempts to honor copyright claims as well as a little clarification about what copyright is. The 2nd one is from a music industry blog. The third is a photography blog. Both of those sources generally represent media content creators views more so than media consumers

    http://theweek.com/articles/608700/copyright-laws-are-breaking-youtube-heres-how-fix-problem
    http://www.digitalmusicnews.com/2016/02/29/youtube-alters-response-to-takedown-complaints/
    https://petapixel.com/2016/02/20/how-i-turned-a-bs-youtube-copyright-claim-back-on-the-real-infringer/
    edited January 2017
  • Reply 26 of 27
    gatorguy said:
    davidw said:
    gatorguy said:
    KT Glitz said:
    It's not surprising to be honest. I am a musician and I receive more in royalties per play through Apple than I do through Spotify. Spotify are the worst company for offering the best deal to the people they are giving a platform to so I can well believe that the record labels also get a bad deal. There is NO defence for Spotify to be ripping off musicians and labels when Apple can give a far better deal. Spotify are feeling the pressure now from the place where they once had an exclusive platform to do what they want but if they don't wise up then they are going to struggle. The actual figure that Spotify pay per stream is between $0.006 and $0.0084 so you have to have a massive amount of streams to get any return as an artist!
    Both Apple and Spotify claim to be paying out 70% of their streaming revenues back to the IP owner. As I read it the difference in the per-stream figures between the two companies is not  one is willing to pay more but that the number of streams per Spotify subscriber is greater than the number of streams per Apple subscriber. Both paying the same 70% out (Apple may still be paying 71% but I don't think so) but on a different number of plays. 

    "All numbers are the result of taking the total amount of revenue and dividing it by the total number of streams to produce a net rate per stream. As streaming rates vary (based upon revenue vs consumption) this is the only real way to have a reasonable benchmark. Spotify pays out (they say) 70% of (recognized?) revenues to rights holders. The more streams there are, the less each stream is worth, unless the revenues grow faster than streaming consumption. But that hasn’t happened yet."


    But you have to remember that that 70% of the pot is not a constant just based on the number of subscribers. If Apple has 20M subscribers but each subscriber pays and average of $9.00 and Spotify has 30M subscribers but each subscriber pays an average of $6.00, the pot would be the same for each company (70% of $180M). (Which can happen due to how many subscribers are in family plans or paying student discounts.) But Spotify would have 10M more people streaming. So its not just the number of streams per subscriber that affects the per stream pay out rate to the Music Labels, its also the amount each subscriber pay for their subscription.  If each Apple subscriber stream at the same rate as each Spotify subscriber, Apple would end up paying more per stream than Spotify (based on this scenario). And subscribers with student discount or under a family plan would be paying out less per stream than a single subscriber paying regular subscription cost, if they all stream at the same rate.    
    You got it!

    Apply this to your individual subscription. Pay Apple $15 for a family plan. $10.50 of that will be going to song rights owners. If only one single song was streamed the entire month then your $10.50 would presumably go to the owner of that single song. But if 4 family members each used Apple Music for three hours every day, totaling 12hr per day of streaming, that would come out to around 6500 individual streams give or take. Now how much is each one of your song plays worth? Far less than a penny, .0016.

    Of course Apple doesn't isolate your individual subscription so your $10.50 would not actually go to one single song owner.  But you get the gist of it. 
    This has been my question for a while - whether Apple Music and other subscription streaming services consider the revenue pool (and divide it up based on the number of streams) on a per-subscriber basis or as a whole. I've assumed that it was the latter, or at least thought that was more likely. However, the former basis would seem a bit fairer to me, although it would add a level of complexity to the process.
  • Reply 27 of 27
    bitmod said:
    qwwera said:
    If this is verified good for Apple and I will swiftly cancel my subscription to Spotify and switch over to Apple Music.
    Good luck with that.
    If you want to go by an 'unnamed indie label' with a measly 150 albums .

    Their alternative is nobody ever hears about them ever or they can fork out tens of thousands to make cd's - which nobody buys anymore - tens of thousands more to market and distribute those cd's. To get what? 30 cents/disc.

    There are some songs i've streamed over 100 times. The artist gets .73 cents for that.
    I can think of one artist who's 9 track album I have streamed well over 100 times. Thats $6. $6 they otherwise would never have had. I've turned many friends on to this artist as well.  So they have made a lot of money they otherwise would never have had with minimal investment and beholden to a record label for 6 years...
    Your math is off by a factor of 100. 100 streams of a song is 0.73 cents. Not 73 cents. Less than one cent, in other words. So an album of nine songs which you stream 100 times provides about six cdnts in income gor the artist.

    If you saw the Spotify checks to artists for, say 32 cents for three months, you might change your mind about how much money they "otherwise would never have had." 
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