How to Quintuple Your Streaming Royalties In About One Hour

Multiply Your Streaming Royalties: Here's How

This is how you can hack your streaming royalties.

Earlier this year, DMN starting asking artists and labels to share their streaming royalty statements, which unearthed a pile of incredible per-stream statistics.  That’s part of an ongoing data-sharing project to battle the incredible lack of transparency in the streaming music space (and, please send your royalties to [email protected] to share with the community, confidentiality protected).

The statements we’ve received so far include a rock band from France, an indie label from Quebec with 2.5 million YouTube streams,  and an ‘average American band‘.  That complemented earlier statements from a Grammy-nominated songwriter, one of the first Tidal royalty statements, and a blunt statement from Lady Gaga’s ex-manager on major label royalty payouts (or lack thereof).  By the end of this initiative, we’re hoping to publish a vast tranche of data that helps everyone figure out what they should be getting from their streaming plays.

We’re just getting started on this project, but things are starting to roll in from different corners.  That includes the results of this very interesting experiment from an indie rap label, which unearths some major payout disparities that can (and should) be taken advantage of.

Basically, what the head of this label found out is this: different streaming platforms are paying wildly different rates, with some smaller, paid services distributing vastly superior per-stream payments.

These differences are oftentimes extreme, making it possible to dramatically improve your streaming payouts by focusing on these higher-paying platforms.  The result is more money for your artists, right now.

OK, so let’s get started on how to re-tread your digital distribution to make this happen.

Step 1: De-emphasize lower-paying platforms like Spotify and YouTube.

You don’t have to pull your content; just pay less attention to the giant, mostly free streaming platforms.

For starters, Spotify payouts are really bad: according to most royalty statements we’ve seen, Spotify typically pays less than half-a-penny per stream ($0.005), and often less than one-third of a penny ($0.0033).  This is driven by a lot of factors, including huge numbers of free, ad-supported plays, and lots of money siphoned off by major label special deals.

According to leaked contracts and other information shared with DMN, that includes preferential, lower-cost ad units for major labels, as well as upfront cash advances.  Attorneys have told us that the emphasis by big labels in more recent years has been on granting ownership shares to major labels, but that places even more pressure to prioritize big-budget acts like Demi Lovato and Justin Bieber.

The end result is that upstream cash is taken off the table before smaller labels and artists can claim it, driving per-stream revenues into the gutter.  Meanwhile, major label artists often have a difficult time getting paid on Spotify streams, making this entire platform very difficult to monetize except for a core group of insiders, which includes major labels and superstar artists.

Now, Spotify is one of the largest streaming music platforms on the planet, and that can translate into exposure.  So, it may be unwise to yank your content from Spotify if you’re anything smaller than Adele.  And get into enough plum playlists, and that can create a big story for the right artist.

It can also translate into some cash, and there are definitely examples of this (Nashville-based artist Perrin Lamb is one).  But these aren’t windfalls, according to the experts we’ve talked to, and playlist inclusion is mostly about gaining new fans (that you can monetize some other way).

YouTube = poverty.

Which brings us to YouTube, which is notorious for being the worst-paying streaming music platform on the planet.  Basically, there are two forms of monetization on YouTube: direct music video matches and those picked up by ContentID.  Both completely suck, and if you don’t believe that, take a look at this royalty breakdown from a Canadian label with 2.5 million YouTube plays.

YouTube (proper music video plays): $0.001005 Canadian ($0.000794 US) per stream.

YouTube (Content ID): $0.001342 Canadian ($0.001061 US) per match.

In total, the label earned less than $2,000 for its 2.5 million plays (you can read more about that here), which is part of the reason the entire music industry is now declaring war against YouTube (and this could get ugly).  But that doesn’t mean pull your content off of YouTube, especially given the massive amount of users on this site.  But it does mean to give up any hope of making real money off this platform.

There’s just no money on YouTube.  Which means you have to try some other paths to earn money.  So it’s time to start outmaneuvering the system.

Step 2: Hack better-paying platforms like Tidal and Groove Music.

Back to the indie rap label mentioned earlier.  As part of a big experiment, the head of this label decided to put his music on as many different platforms in as many different countries as possible.  And, here’s what this person earned over a multi-month period on both Tidal and Groove Music (owned by Microsoft, also referred to as Xbox Music and formerly Zune Music).  These are average payouts across a substantial artist catalog.

Tidal, Groove Streaming Royalties

As you can see, both of these platforms delivery wildly better payouts per stream.  While Spotify is rarely getting over $0.005 (half a penny) per stream, Tidal and Groove are consistently delivering multiples of that.  But even at its worst, Tidal and Groove are delivering 2 cents per stream (see Germany), but sometimes hitting as much as a full-blown 10-cents per one stream (see Sweden and Ireland).

(Note that some of these payouts appear to be exactly the same, but they actually differ once the number of digits expand beyond three decimal places.)

The full dime might be a temporary anomaly (see more on that below), but the overall payouts aren’t accidental.  Because even the worst payouts are at least double the best payouts you’d get from Spotify.

These aren’t typos, rather, they are the essence of this hack.  These payments are multiples better than Spotify and YouTube, even for smaller artists.  This is a loophole that smart label managers and artists are smartly working right now.

And, it should be mentioned that none of the artists on this label have hit it big yet (or have any huge hits).  But they are making music that enough people want to enjoy.

Step 3: Exploit Temporary, High-Paying ‘Accidents’

While we’re on Groove Music, it should be mentioned that there are some strangely high payments being doled out right now.  These are probably shorter-term anomalies while these platforms get out of their early stages with modest userbases, but they can be exploited to great gain right now (as in, do it now).

Take a look at this royalty breakdown involving Groove Music, from the same label manager (using songs from a broader group of labels).

 

Xbox Music Streaming Royalties

 

Yes, that’s right, some of these streams are paying $2+ dollars per stream.  It’s right there in the statement, for one stream.   Yeah, it’s messed up, but finally it’s messed up in the artists’ favor.   “The streaming system is seriously flawed,” the person running the experiment told us.  “How can they pay more in a per stream royalty rate than it actually costs to simply download the single and own? LOL.  But hey unlike most of the people commenting on your posts, the labels I help aren’t complaining.”

Step 4: Move onto other, smaller, paid-only platforms.

Abnormal upper-end blips aside, there’s a reason why Tidal and Groove offer superior payments to artists: they are smaller and paid only.  That means every stream is counted against a paid pool from a smaller group of users, without the masses of free, ad-supported listeners.  That smaller group in turn triggers a smaller number of streams, with (numerator over denominator) produces a far bigger payout per stream.

Sure, Spotify has 30 million paying subscribers, but the problem is with the 70 million free users.  And Spotify doesn’t pay artists that attract paying subscribers better, even if 100% of your fans are premium users.  You, like every other label and artist, get lumped into the low-rent pool, dragged down by ‘freemium’ users.  “We have GLOBAL distribution to all available stores even Deezer which is not yet available in the USA,” our source relayed.  ”

“However, why would we promote music to platforms that pay $.0007 per stream?”

Speaking of global, it’s important to get into as many different countries as you can, because you never know where things can pop.  And, have you tried Google Play?  Here’s a breakdown from 2014, so it’s a little dated, but it also illustrates the principle at hand: smaller paid platforms, spread out to different countries.

Again, this blows away anything from Spotify, YouTube, or other large, free-access platforms like Deezer.

Google Music Streaming Royalties

Step 5: Make Sure You’re on Apple Music.

Apple Music is actually getting pretty big, and it’s also paid only.  At last count, Apple had 13 million paid subscribers, which is nearly half the number on Spotify.  But unlike Spotify, they have zero free-access users (unless it’s a free trial, for which they also pay).

That said, we haven’t seen too many statements from Apple Music yet, probably because it’s less than one year old.  But from what we’ve seen and heard, the royalties aren’t bad at all (though you’re probably not going to get Groove-style payments).

Unfortunately, it’s nearly impossible to get featured on Apple Music unless you’re a superstar of major-backed artist, but there’s absolutely no reason not to at least position your music here.  Lightning does strike, and you could get factored into a popular playlist and enjoy the elevated payouts.  So why not?

Step 6: Promote Like Crazy and Monitor.

The most critical aspect of this strategy is to stop wasting your time promoting your content on crowded free platforms, while dedicating greater time to promoting the niches to draw greater revenues.  Let’s be blunt: the major labels own the front door of Spotify, because they paid for it.  You’re not getting in.  It may be 100 times easier to get on the front door of Groove, and about 10,000 times more profitable.

It’s also key to make sure to keep a tally of everything, something your digital distributor will handle for you.  After bull-charging the little guys, monitor like crazy to see where your biggest gains are coming from.  Just scour through the data looking for blips; oftentimes it will smack you in the face.   You will be pleasantly surprised.

But how much more will you make?  Obviously results will vary, and the upside will totally depend on your content and the extent of your campaign.  But one digital distribution exec we spoke with estimated that a conscientious label or artist can easily expect to quintuple their revenues in a matter of months.  That is, after spending about an hour re-tooling your strategy and approach.

After setting these changes in motion today with your digital distributor, and then setting a new promotional and monitoring game plan in place, you’ve started the wheels on a totally different ‘stream’ of income.

Good luck!  I hope these hacks help you make a lot more money off of streaming!

And last thing: please keep DMN posted on your progress (in comments below or to [email protected]), and share as many statements as you can.  We’ll keep everything confidential.  

 

Image taken by Thomas Galvez, licensed under Creative Commons Attribution 2.0 Generic.

32 Responses

  1. Anders

    Re:

    “full-blown $1 per one stream (see Sweden and Ireland).”

    I’m reading it as 10 cents ? not $1 dollar

    Reply
  2. Maximus

    Im sorry but people that are happy not paying with Spotify, Youtube or Soundcloud aren’t going to Tidal or Groove. Especially for the demographic that streams my bands music the most, 18-24. Smaller royalties and exposure through Discover Weekly are a better option than having no streams and getting only a few people following you to one of those platforms.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      I’m not so sure about that. Tidal has 3 million subscribers, and half of them are paying $20 for higher-end audio fidelity. Rhapsody, which wasn’t even mentioned here, also has 3 million. Groove Music, Google Play Music, and let’s not forget Apple Music… we’re talking millions and millions of paid-only subs and much higher royalties.

      But whatever, let somebody else take your money.

      Reply
      • Dan

        I agree with you Paul. I laugh when artists talk about the “promotional value”. I have yet to have someone put a price on “promotional value”. How much is that “play” worth if it does not generate revenue? For some it may lead to revenue from gigs; but they are not mutually exclusive. One of the reasons for the exposure they seek should be driving more revenue from recordings; not less.

        In all, I think you have perfectly highlighted the point perfectly. Focus on the platforms that pay the most. I would take it a step further and window your platforms according to margins.

        My platform ClearTracks pays up to 100% of revenue but my audience is small. I frequently recommend to my customers to release on ClearTracks first, followed by the next highest paying platform. I you are driving your own traffic, you should drive them to where you get the highest margins.

        Reply
        • Ted

          Bingo! You my friend have nailed it! Release and promote your music ONLY on the platforms that are beneficial regarding revenue returns, then drive your fans and promote to new potential fans your music on those “beneficial” platforms.

          Reply
  3. FarePlay

    It come to a point, and I’ve had this conversation with several artists, that they refuse to release their music online.

    Spotify may stream a lot of music, but with over 10 million songs good luck getting found, if you don’t have a following, if you do all the more reason to limit what you have on interactive streaming sites.

    Reply
  4. Nicky Knight

    Everyone you have to come to the realization that’s today’s recorded music business is all about the hit.

    If you can whip up a monster hit then you’ll never have to worry about putting food on the table or a roof over your head again..

    For our label the revenue is still weighted very much in favor of
    Apple iTunes Store and Apple Music.

    Where there’s a hit there’s tons of money !!!

    Reply
  5. PJ Wassermann

    I’d like to know HOW to promote on Tidal, Groove etc.

    Reply
    • tory

      they just mean streaming their own music on those servers with a bot.

      Reply
  6. Momo

    How often does Tidal pay royalties? I get regular monthly checks from iTunes, Groove, Spotify etc. but I think I’ve received one check from Tidal in the last six months. Given our artists’ fan bases, I can’t believe it’s because they’re not getting streamed on Tidal

    Reply
    • tory

      that’s a great point! tidal doesn’t pay consistently. the ‘average american band’ article had this pointed out. they would pay for a few thousand streams one month and then not pay for a few months in a row and then start paying again.

      Reply
      • Momo

        I’m glad I’m not the only one experiencing this issue with Tidal. The question is why don’t they report regularly like every other platform?

        Reply
        • tory

          because they are not a real company. they will probably be bankrupt afte rthe lawsuit.

          Reply
  7. Luther

    It’s a bad idea to focus on short term gain. Maybe you can make some cash by driving traffic to a site like Groove for now, but it’s only a matter of time before they either stop overpaying and you’re left stuck on a mediocre platform with limited room to grow, and if they then collapse later on you’re going to have to start from scratch.

    To my mind it makes more sense to focus on building your fanbase on a more established, stable platform that’s likely to stand the test of time like Apple Music or Spotify.

    Reply
    • Josh

      I agree with Luther. Unless you have a bot to boost streaming income on Tidal and Groove before they go away, re-brand, get acquired or flip their script. Playlisting is the talk of town right now, so create and exploit that as much as possible before curation becomes king again. But at the end of the day, someone said it’s all about that hit song, too. In a world of over-saturated music, labels/creators tend to pump out as much ‘content’ as possible, not focusing on a hit that they don’t have patience for after a few months of marketing and promo…because they have something new to push.

      Reply
  8. Duchamp

    ha! what a joke. worst advice ever. how many users are on Tidal and Groove ? Who is making money from them ?

    Reply
  9. Ted

    Paul some of these comments are hilarious lol it’s no wonder why many of the “experts” complain, most of them are clearly clueless lol… It’s so funny I love it lol
    cha ching cha ching cha ching lol

    Reply
  10. Versus

    What do you mean by “hack”?
    You say not to pull your music from lower-paying services.
    So what should you do to prioritize the higher paying services?

    Reply
    • Ted

      I would recommend when promoting “where” to find your music to your fan base and targeted new fans, that emphasis is placed on the platforms that pay HIGHER royalties. I’ve found that you can easily develop a loyal fan base for an artist/band/group on platforms that are less saturated with the more popular releases that are in your face daily on the larger more popular platforms that pay significantly less in royalties.

      Reply
  11. dtla

    Very interesting read and comments.

    And how do you want the streaming data? Is raw unsorted from the distributor ok?

    Reply
  12. Kirk Trafficante

    I’d be happy to upload a screenshot of streaming revenues

    Reply
  13. Tom

    Videscape has a million users and pays the full dime per video view

    Reply
  14. Viktor

    Sorry, I think you misread. Vidscape’s FAQ says ‘The minimum we will ever pay out per stream is 0.1 cents.’
    That’s $.001, not ten cents.

    Reply
  15. Malaika

    CD Baby vs. U.S. © Law

    A word to the wise… when submitting a song for sale/distribution by music distributor CD Baby, their site only allows signing up a single e-mail address and bank account.

    U.S. Copyright Law requires all music distributors provide all song ©-holders with regular statements of account (sales numbers) and royalties earned for sales made.
    In the case of CD Baby, all ©-holders need to be able to log in to their CD Baby artist page using a single e-mail address in order to read the royalty statements.

    Although advertising, ‘CD Baby wants to make sure you’re getting paid everything you’re owed’, if the song has more than one writer / ©-holder, whomever signs up the song will be the only one who may (then again, may not) receive royalties from CD Baby and, at last count, its 27 partners.

    Co-©-holders who do not have access to the single e-mail and bank account used to sign up with CD Baby will receive nothing from CD Baby.

    Reply
  16. Good luck building a fanbase on Tidal

    This article is one of the stupidest things i’ve ever read.

    Reply

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