Streaming services like Apple Music poised to control music revenue in 2019

Posted:
in iPod + iTunes + AppleTV edited April 2
Streaming services like Spotify and Apple Music accounted for 47 percent of all recorded music revenue in 2018, making it likely they'll cross the 50 percent mark this year, according to official industry data.




Streaming income jumped 34 percent last year to $8.93 billion, pushing overall industry revenue up 9.7 percent to $19.1 billion, said the International Federation of the Phonographic Industry. The group specifically pointed to paid subscriptions, which claimed 32.9 percent of industry revenue.

The recording industry has been growing for four straight years, but in effect is actually recovering from a "decade-plus of decline," the IFPI noted. Labels and publishers were slow to adapt to the arrival of digital music, which resulted in piracy becoming commonplace even after the arrival of legal storefronts like iTunes and radio services like Pandora.

On-demand streaming may have finally cracked the value proposition needed to reach the masses. While buying a single album on iTunes typically costs at least $9.99, that same money grants access to tens of thousands of albums on Apple Music, if only for a month at a time. The convenience has apparently proven worth it for many people, even if some artists and labels are still holdouts, preferring to steer customers to shops like Bandcamp.

That option can make strong economic sense. Many artists have complained about earning poor revenues from on-demand services, and in fact pop superstar Taylor Swift initially refused to allow her music on Apple Music until Apple promised to pay musicians for streams during listeners' three-month trials. It's common for artists to depend on concerts and merchandise to actually sustain themselves.

Apple has since tried to position itself as more artist-friendly. Recently, for example, it declined to appeal royalty increases for songwriters.
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Comments

  • Reply 1 of 26
    rkorko Posts: 12member
    How does an artist get paid when their song is accessed on Apple Music?   How much are they paid per song?  I listen to songs on Apple music, but wonder if the artist actually makes anything.  These services should maximize artist revenue from song 1.  Selling merchandise should not be needed, the music is the merchandise.  Artists should be able to earn a living through their work.
    edited April 2 larz2112
  • Reply 2 of 26
    rko said:
    How does an artist get paid when their song is accessed on Apple Music?   How much are they paid per song?  I listen to songs on Apple music, but wonder if the artist actually makes anything.  These services should maximize artist revenue from song 1.  Selling merchandise should not be needed, the music is the merchandise.  Artists should be able to earn a living through their work.
    Afaik, payment goes to the rights holders.  The rights holders could be a combination of music label, artist, song writer, producer, etc.  The label typically gets the lions share and everyone else, including the artist, is paid from the rest of the cut.  Touring and merchandise has always been the primary revenue generator for artist for as longs as I can remember.  That isn't a consequence of streaming.
  • Reply 3 of 26
    melgrossmelgross Posts: 31,737member
    It’s the way radio stations have worked, thought their payout per song is a lot more (though my cousin and others have said, over the years, that many smaller stations don’t pay).

    the problem between the streaming companies and the music industry has always been the amount paid per song. The label doesn’t always get the biggest share. But the real problem is that we now know that ,people simply won’t pay more the]an $9.95 per month for music. There are other services, such as Tidal and QoBuz (which I subscribe to) that offer uncompressed streaming for more per month. But the equation is the same. Few people subscribe to these higher end services.

    so the problem is that a streaming company can’t make money at $9.95 a month. Their payout of royalties and that of running the business is higher than that. It’s why Spotify and Pandora relied on a constantly renewing stream of outside investment to keep going. Most all streaming services over the years have gone out of business. A few have been bought out, and THEN gone out of business. Even Sony failed at this.

    pandora is in a lot of financial trouble now. Spotify which went public last year, is having financial problems. I believe that, in the end, those left standing will be those that are owned by much larger companies who are using them to entice people to their ecosystems. Companies like Apple, Amazon, Google, Microsoft and possibly a very few others. They can offer this as a service, and not worry about being profitable as long as they feel they’re gaining more than they’re losing by having more customers overall.

    so what does this mean to those who spend a lot of money producing this music? It means that they have to hope that they get so many streams, on average for their offerings, that the very small amount they get for one stream isn’t that important. This is working for digital books, where Amazon and others offer free books, and amazon offers a service for $9.95 a month (which I belong to) that allows you to read any book or series that’s available to it. Not all books, but a very large, and growing percentage. Authors say they prefer it even though they get very little per read, because people are more likely to read when it’s as thought it’s for free, and unlimited. It’s good because people will read all 10 books in a series when it doesn’t cost more than that $9.95 a month for that and everything else. Authors therefor get readers who wouldn’t otherwise buy all 10 books. Do that a few times a month, and you save big.

    same idea with music. Is it working? Many artists are happy. Some are not. That’s nothing new. 
    edited April 2 pscooter63
  • Reply 4 of 26
    spice-boyspice-boy Posts: 837member
    Apple is on its way to monopoly. control over the music industry's profits. This is not a good thing for consumers, the music industry and music as an art form. Now our press is its next target. I know this is a fan boy website but there must be someone here besides me that sees history repeating itself (not Apple's history) and how if we are lucky our government will step in with an antitrust lawsuit. I've mentioned this before, if the feds had not brought suit against MS, this website, Apple, the iPhone would not be here today. 
  • Reply 5 of 26
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
  • Reply 6 of 26
    davgregdavgreg Posts: 373member
    Streaming is theft.
    Here is a tweet from Peter Frampton:

    “For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700. I went to Washington with ASCAP last year to talk to law makers about this. Their jaws dropped and they asked me to repeat that for them.“

    https://mobile.twitter.com/peterframpton/status/1025584924609400832?lang=en

    Do you think Hollywood would take $1700 for 55 million tickets to a movie?
    spice-boygatorguylarz2112
  • Reply 7 of 26
    spice-boyspice-boy Posts: 837member
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
    I agree which is why I didn't bother with the free trial. I also don't go to "all you can eat buffets" for dinner. 
  • Reply 8 of 26
    genovellegenovelle Posts: 967member
    rko said:
    How does an artist get paid when their song is accessed on Apple Music?   How much are they paid per song?  I listen to songs on Apple music, but wonder if the artist actually makes anything.  These services should maximize artist revenue from song 1.  Selling merchandise should not be needed, the music is the merchandise.  Artists should be able to earn a living through their work.
    Afaik, payment goes to the rights holders.  The rights holders could be a combination of music label, artist, song writer, producer, etc.  The label typically gets the lions share and everyone else, including the artist, is paid from the rest of the cut.  Touring and merchandise has always been the primary revenue generator for artist for as longs as I can remember.  That isn't a consequence of streaming.
    Not accurate. Touring can be lucrative for top artist, but is an expensive marketing task for most others after all the expenses are paid. 
    But here a breakdown of the numbers comparing Streaming to Downloaded Sales. If an artist manages to have their Album of 10 songs saved and have the entire album streamed by 50,000 fans 100 times each beginning to end on Spotify, total revenue would be $20,000. This is based on 5,000,000 streams by SpotOn Subscribers at their rate of $.004/ stream and assuming you don’t have a significant number of free users. 

    Keep in in mind this is the total revenue paid to the record company and is divided amongst the artists producers after recouping expenses based on contracts. If the artist is fortunate to be independent this would go to the artist. Chances are good that they have more than this invested in recording and promotion of the project.   

    On the the other hand had those same 50,000 fans purchased a download or physical copy of that same CD at $12.99, the total revenue for those sales would be $649,500. 

    This means the project earns only 3% of its previous value assuming each fan plays the Album 100 times. How likely is that?
    rko
  • Reply 9 of 26
    genovellegenovelle Posts: 967member
    melgross said:
    It’s the way radio stations have worked, thought their payout per song is a lot more (though my cousin and others have said, over the years, that many smaller stations don’t pay).

    the problem between the streaming companies and the music industry has always been the amount paid per song. The label doesn’t always get the biggest share. But the real problem is that we now know that ,people simply won’t pay more the]an $9.95 per month for music. There are other services, such as Tidal and QoBuz (which I subscribe to) that offer uncompressed streaming for more per month. But the equation is the same. Few people subscribe to these higher end services.

    so the problem is that a streaming company can’t make money at $9.95 a month. Their payout of royalties and that of running the business is higher than that. It’s why Spotify and Pandora relied on a constantly renewing stream of outside investment to keep going. Most all streaming services over the years have gone out of business. A few have been bought out, and THEN gone out of business. Even Sony failed at this.

    pandora is in a lot of financial trouble now. Spotify which went public last year, is having financial problems. I believe that, in the end, those left standing will be those that are owned by much larger companies who are using them to entice people to their ecosystems. Companies like Apple, Amazon, Google, Microsoft and possibly a very few others. They can offer this as a service, and not worry about being profitable as long as they feel they’re gaining more than they’re losing by having more customers overall.

    so what does this mean to those who spend a lot of money producing this music? It means that they have to hope that they get so many streams, on average for their offerings, that the very small amount they get for one stream isn’t that important. This is working for digital books, where Amazon and others offer free books, and amazon offers a service for $9.95 a month (which I belong to) that allows you to read any book or series that’s available to it. Not all books, but a very large, and growing percentage. Authors say they prefer it even though they get very little per read, because people are more likely to read when it’s as thought it’s for free, and unlimited. It’s good because people will read all 10 books in a series when it doesn’t cost more than that $9.95 a month for that and everything else. Authors therefor get readers who wouldn’t otherwise buy all 10 books. Do that a few times a month, and you save big.

    same idea with music. Is it working? Many artists are happy. Some are not. That’s nothing new. 
    I would not say many artist are happy. Unless you have major hits you basically don’t get paid. Amazon is a terrible example. Like Google they exploit the work of others to make billions but want to pay pennies. I have yet to speak with a creative who prefers this Amazon service. They are usually laughing at the totals. 
    rko
  • Reply 10 of 26
    gatorguygatorguy Posts: 20,732member
    genovelle said:
    melgross said:
    It’s the way radio stations have worked, thought their payout per song is a lot more (though my cousin and others have said, over the years, that many smaller stations don’t pay).

    the problem between the streaming companies and the music industry has always been the amount paid per song. The label doesn’t always get the biggest share. But the real problem is that we now know that ,people simply won’t pay more the]an $9.95 per month for music. There are other services, such as Tidal and QoBuz (which I subscribe to) that offer uncompressed streaming for more per month. But the equation is the same. Few people subscribe to these higher end services.

    so the problem is that a streaming company can’t make money at $9.95 a month. Their payout of royalties and that of running the business is higher than that. It’s why Spotify and Pandora relied on a constantly renewing stream of outside investment to keep going. Most all streaming services over the years have gone out of business. A few have been bought out, and THEN gone out of business. Even Sony failed at this.

    pandora is in a lot of financial trouble now. Spotify which went public last year, is having financial problems. I believe that, in the end, those left standing will be those that are owned by much larger companies who are using them to entice people to their ecosystems. Companies like Apple, Amazon, Google, Microsoft and possibly a very few others. They can offer this as a service, and not worry about being profitable as long as they feel they’re gaining more than they’re losing by having more customers overall.

    so what does this mean to those who spend a lot of money producing this music? It means that they have to hope that they get so many streams, on average for their offerings, that the very small amount they get for one stream isn’t that important. This is working for digital books, where Amazon and others offer free books, and amazon offers a service for $9.95 a month (which I belong to) that allows you to read any book or series that’s available to it. Not all books, but a very large, and growing percentage. Authors say they prefer it even though they get very little per read, because people are more likely to read when it’s as thought it’s for free, and unlimited. It’s good because people will read all 10 books in a series when it doesn’t cost more than that $9.95 a month for that and everything else. Authors therefor get readers who wouldn’t otherwise buy all 10 books. Do that a few times a month, and you save big.

    same idea with music. Is it working? Many artists are happy. Some are not. That’s nothing new. 
    I would not say many artist are happy. Unless you have major hits you basically don’t get paid. Amazon is a terrible example. Like Google they exploit the work of others to make billions but want to pay pennies. I have yet to speak with a creative who prefers this Amazon service. They are usually laughing at the totals. 
    FWIW Google Play Music and Apple Music pay near identical effective royalties, with Google at least somewhat recently actually paying out MORE per stream than Apple according to industry stats. 
  • Reply 11 of 26
    fastasleepfastasleep Posts: 2,971member
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
    Area man who doesn’t like music wonders aloud why music afficianados would pay for Apple Music. 

    Apple Music has been a life changer for me. I used to spend thousands a year on music. People like yourself are not the target market. 
    hmurchisonwatto_cobra
  • Reply 12 of 26
    What happens if an artist streams their own music. If the payoff is per track, I can see them continuously streaming a very short track for maximum income. Might get an extra nickel. 
    watto_cobra
  • Reply 13 of 26
    jfanningjfanning Posts: 3,390member
    davgreg said:
    Streaming is theft.
    Here is a tweet from Peter Frampton:

    “For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700. I went to Washington with ASCAP last year to talk to law makers about this. Their jaws dropped and they asked me to repeat that for them.“

    https://mobile.twitter.com/peterframpton/status/1025584924609400832?lang=en

    Do you think Hollywood would take $1700 for 55 million tickets to a movie?

    Are you actually trying comparing the number of streams of a three minute song to ticket sales of a hollywood movie?
    fastasleepwatto_cobra
  • Reply 14 of 26
    eightzeroeightzero Posts: 2,366member
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
    Area man who doesn’t like music wonders aloud why music afficianados would pay for Apple Music. 

    Apple Music has been a life changer for me. I used to spend thousands a year on music. People like yourself are not the target market. 
    I wonder how many afficiandos there are. I have no doubt there are many that value this service. I don't, but YMMV. 

    I don't need to "own" something to enjoy or value it. 
  • Reply 15 of 26
    22july201322july2013 Posts: 716member
    I've been paying $9.99 for music from Apple Music since it came out. Considering that over the previous 40 years I spent approximately $9.99 on a single album, that's a huge win for the music industry. Compare $9/40years to $9/month. That's a spending increase by me on music by exactly 48000%. Surely I'm not the only person that fits this pattern.
    swpalmerwatto_cobra
  • Reply 16 of 26
    fastasleepfastasleep Posts: 2,971member
    eightzero said:
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
    Area man who doesn’t like music wonders aloud why music afficianados would pay for Apple Music. 

    Apple Music has been a life changer for me. I used to spend thousands a year on music. People like yourself are not the target market. 
    I wonder how many afficiandos there are. I have no doubt there are many that value this service. I don't, but YMMV. 

    I don't need to "own" something to enjoy or value it. 
    Not sure what you're talking about. Obviously according to the article there are approximately $9 Billion worth of music aficionados out there that pay for streaming services. 
    watto_cobra
  • Reply 17 of 26
    crowleycrowley Posts: 5,925member
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)
    Why does it boggle your mind that other people have different listening habits to you?

    It's an odd month when I download fewer than five or six albums, old and new, in addition to checking out some curated playlists of singles.  $10/month is well worth it.
    watto_cobra
  • Reply 18 of 26
    melgrossmelgross Posts: 31,737member
    davgreg said:
    Streaming is theft.
    Here is a tweet from Peter Frampton:

    “For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700. I went to Washington with ASCAP last year to talk to law makers about this. Their jaws dropped and they asked me to repeat that for them.“

    https://mobile.twitter.com/peterframpton/status/1025584924609400832?lang=en

    Do you think Hollywood would take $1700 for 55 million tickets to a movie?
    It’s not theft. There are legal agreements in place. Most artists are happy with it, though they would like a little more. The fact is that the industry has been changing for a long time. Digital has done that. There’s no going back. Apple resisted it for almost 2 decades, but had to give in. You do what your customers want. If artists have to perform live, tough!
    watto_cobra
  • Reply 19 of 26
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)

    All these "service" models where you never actually get to own anything but keep shelling out money don't work for me.

    Same is happening with TV.. cutting the cord and going with Netflix and Amazon Prime was a benefit.. but then Disney and HBO, etc start to do their own thing and you have to pay another $10 for each of those if you want them... it is going to end up worse than cable was.
    Area man who doesn’t like music wonders aloud why music afficianados would pay for Apple Music. 

    Apple Music has been a life changer for me. I used to spend thousands a year on music. People like yourself are not the target market. 
    I don't know where you get the idea that I don't like music.  I don't like most of the music pushed at me today, but I do occasionally find something tolerable ;-)  It's just hard to find when the popular music is so bad.  If you listen to the radio these days they play less than 10 different songs in a month - constantly repeating the same crap - If that's what you want you could buy the songs for less than the cost of Apple Music.

    I agree I'm not the target market. 
    There is no way I would be able to find $1000 of music in a year that doesn't make me want to cover my ears and run away screaming... Even when I find a song I like, it is rare for me to like the whole album.  I might look for a greatest hits album and only get the songs that worked. The best thing iTunes did was let me buy only the good songs.

    Apple Music is 2 to 5 times more expensive than I would be willing to pay.

    Now if Apple would consolidate things so iCloud (2TB) + Apple Music + Apple TV+ + the new Gaming service were available in a bundle... if I could get all that together for a reasonable price (less than $15/month) that would be something. 
  • Reply 20 of 26
    crowley said:
    swpalmer said:
    It still boggles my mind that people will pay $10/month for these services.  I rarely find any new music worth listening to and when I do I can buy the song or album and still come in way below spending $10/month and then I have the songs forever (off-line, etc.)
    Why does it boggle your mind that other people have different listening habits to you?

    It's an odd month when I download fewer than five or six albums, old and new, in addition to checking out some curated playlists of singles.  $10/month is well worth it.
    It doesn't boggle my mind that other people have different listening habits.   It boggles my mind that you can find enough good music to justify the price. 5-6 albums a month - yes that boggles my mind.
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