You might want to start working on your Microsoft Groove account (hint: NOW…)
For the past year or so, Digital Music News has been publishing streaming royalty statements shared by artists and labels. Since the project began, we’ve published payout details from Spotify, YouTube, SoundCloud, Deezer, Google Play Music, Napster (formerly Rhapsody). We’ve even covered defunct services like Rdio.
(And if you have anything to share, email it to us at [email protected], of course we’ll protect confidentiality as needed).
Most of these payouts were very low, but several months ago, things started getting strange. Two services in particular — Tidal and Microsoft’s Groove Music — were showing abnormally high payout rates, for reasons we couldn’t quite figure out. One explanation was that these were smaller services with subscription-only plans, thereby raising the money pool, lowering the number of streams, and elevating royalties significantly.
Whatever the reason, smart artists and labels quickly saw an opportunity to game the system a bit. And, make some serious money in the process.
The first person to tip us off to higher Tidal and Microsoft Groove rates was the head of an indie rap label. As part of a test of streaming service payouts, which we first reported on back in May, this person unearthed the following rates from Tidal and Microsoft Groove. Compared to Spotify rates that often hover around half-a-cent (or $0.005) a stream, and oftentimes worse, these were about ten times the payout.
Usually when spikes and abnormalities like this appear, everyone rushes in and kills the party. But not in this case: instead of these rates normalizing towards low-level Spotify payouts, it appears that payouts on Microsoft’s Groove Music are heading even higher. And not just a little bit higher, multiples higher than before.
That includes payouts of more than several dollars per single stream, according to the statements we’ve reviewed. Specifically, an average of $4.67 per song played in the statement we reviewed.
(Quick note before going further: Microsoft has changed the name of its streaming music service a few times over the years, and we’ve seen at least three different names on streaming royalty reports. That includes Xbox Music, Musiwave Xbox, Zune, and Groove, with other variations included).
Here’s a quick look at some of the payouts that this label is seeing from Groove. As you can see, these are payouts of several dollars per stream, consistently.
The label itself, as well as roster artists and identifying information like ISRCs, have been scrubbed here. But we can say that this is an independent r&b and hip-hop label with a substantial number of artists. This is all distributed through INgrooves (we took the .xls statement and uploaded it into Google Sheets).
Astoundingly, we found the average payout to this label during the month of May was $4.67, per single stream. The owner of the label was as shocked as we are, with both of us scratching our heads to figure out what’s going on. One theory is that these payouts are coming from a subscription-only group with limited usage of Groove, which would naturally bump up the per-stream payout.
Another equally plausible theory is that Microsoft is simply paying incorrectly. For example, accounting $4.67 instead of $0.00467 (or, some other variation like $0.0467).
It should be noted that this label head is actively working his music promotionally within the Xbox gaming platform. That is, partly with the devilish intent to take advantage of these elevated per-stream payouts (we’ll have more details on that ahead).
And here’s the complete spreadsheet to check out.
More as we know more!
And please share your royalties to [email protected]! It will greatly help other artists and the industry to get a better sense of what streaming platforms are paying.
“Another equally plausible theory is that Microsoft is simply paying incorrectly, and accounting $4.67 instead of $0.00467”
It probably should be $0.0467. That would closely match what we have seen in previous royalty statements.
I assume this must be fairly isolated or Microsoft would have noticed such a massive error. There is no way it can be correct. Groove only costs $10 per month. Groove users would have to be streaming less than 2 songs per month.
“It probably should be $0.0467.”
That would be my guess, as well. Microsoft’s service, in its various incarnations, has been showing payouts in the range of several cents per stream for years now. Having the rate jump to several dollars beggars belief.
Aside: Jumping on the Groove wagon is probably a bad idea, unless you’re a first mover. Let’s not forget that the more songs get played, the lower the rate-per-play. If everyone suddenly starts pushing their fans to use Groove, the payouts are going to drop to industry-standard levels (peanuts) in no time.
$0.00467, $0.0467, the specific number doesn’t matter. I was suggesting that there was a decimal place error, just as a possibility.
Not so, because groove is a paid service. If people push more fans towards paid services, royalties would increase. If the big three jump in, then royalty rates will plummet, because they require huge advance payouts, as well as the majority of royalties per stream. More users means more users means more money in the pool, but there would be No real impact on royalty rates. If one user stream hundreds of thousands of songs a day, then the rates would take a hit, because that one person can single handedly make or break the system
No, if you follow the payment methodology of PRO like ASCAP, the rate that MICROSOFT is paying is correct. Frankly, Youtube and others have been cheating the artist. look at the copyright royalty index rate- it works like the stock market.
I know for a fact that this particular person is using a bot to rack up plays on groove. I run a distribution company and recently booted someone who fits this exact description for streaming abuse. Of my 8,000+ clients, I would typically see 800-2,000 groove streams per month. TOTAL. Then this guy comes along with his catalog of about 220 songs and is bringing in 15,000+ per month. Microsoft notified me of the abuse and removed the songs. Since it was a pattern with this person on his account, he was banned from my service and forfeited all the royalties earned. I see that he is now at INgrooves trying the same thing. It’s only a matter of time before Microsoft catches you. SHAME ON YOU!
It’s not a bot. I talked to the source this morning, who laughed at that idea. It’s about 160 streams total, with real plays.
Looks like on this one they have a very low amount of streams so I don’t think it’s a bot plus it looks like paid subscriptions (interactive streaming) looks like the per stream royalty rate is just really high. By the way what distribution company?
You mention he is “actively promoting his music within groove”. How does one do this? Are there playlist curators one can contact? Ad space that can be bought?
Stay tuned. All secrets will be revealed.
Looking forward… Hopefully additional info will make this story make more sense…
Update? When will secretd be revealed?
Hey Paul, any updates on here? Would love to know more….
Play listing your songs with other artists that are similar is a no brainier with ANY service. Best promotion a band or indie label can do. $9.99 subscription is easily off-set by earnings. Likely you won’t chart though. Microsoft cracks down on that.
Paul – you understand streaming a little better than this. If this is true it basically means that there’s about 2 people using Microsoft’s streaming service and there is zero long-term scale.
I’m looking at an INgrooves statement, in detail. And sharing it with the artist and industry community. Why would you want me to filter or not report this?
In that case, I am owed around $37 million. BS
I’ll bet next month they get an adjustment from Microsoft recouping all the money they overpaid. Our average payout/stream for May from Microsoft was $0.03185. Still waiting on Tidal to pay us.
Tidal takes 3 and a half months to pay on Tunecore.
there’s money up in them there hills….
Groove/Microsoft has been paying 4.7 cents a stream for several years. Solid and predictable. Also, their mechanical rate paid through Music Reports is 1/3 of a penny which is the higher than we’ve seen from ANY other service.
Do artists get their songs on Groove through the same channels as getting them on iTunes, Spotify, etc.?
I, too, am interested if anyone knows this
(coming from a prospective Groove user standpoint, I found there are a couple of artist that aren’t on the service, especially those signed to Warp).
I once read an article about a guy trying to systematic abuse Digital Distribution partners.
I don’t seem to understand the relation between the power bill of your device playing the songs and the vastly terminology “systematic abuse”?
Promotion of your own songs on a digital platform is “unethical” or even “illegal”??
How does a unknown artist get money when his ability to pay for advertisements is low, comparable to other well paid artists. Secondly, what is abuse?
Where is the line between abuse and use??
About any specific’s, money comes originally from the bottom of the earth, so money is only protected by communities with the same opinions. “Systematic” abuse is merely distinguishable in some cases. I would say that systematic abuse of any legal money involving action can only be recognized by means of amount, not by fact only. To give a metaphorical example:: If I have a power bill that spikes out one month, the other months it returns to common sense, I don’t see the “systematic abuse”. Since I do not know the specific facts, neither can I judge. But it surely got me interested. Thank you for disclosing this information!!
When you are paid impossible amounts of money per stream, something might be wrong.
In such a case, paid amounts are probably recouped, after (microsoft) finds out their system is misbehaving. However, I am the owner of my songs, right??
I just checked my artist Groove music payout and he got paid .0322 for each stream. This is from the month of July. That $4 payout is a more than likely one-time thing and/or a mistake on Microsoft behalf.