Streaming Music Royalties are Even Worse Than We Thought — At Least According to This Indie Label

Indie artists aren’t the only things not earning enough from streaming music services.

Late last month, Digital Music News updated its list of what streaming music services pay.

Thanks to information from third-party websites and actual artists, we ranked these services according to their per-stream rate.

Napster, the king of streaming music payouts, now pays out $0.019 per stream.  To meet the monthly minimum wage amount in the US ($1,472), an artist needs 77,474 total plays.

Jay-Z’s beleaguered TIDAL remains a top player.  The service pays artists $0.0125 per stream.  Artists on TIDAL now need 117,760 total plays to earn $1,472.

Taking third place, Apple Music now pays $0.00735.  Artists on Apple Music need around 200,272 plays to earn the US monthly minimum wage amount.

Beating Deezer for the first time, Google Play Music (GPM) per-stream rate stands at $0.00676.  Artists will need around 217,752 total streams to earn $1,472.

Falling to fifth place, and still without an established presence in the US, Deezer’s per-stream rate rose to $0.0064, placing it right behind GPM.  Artists need 230,000 total plays to earn the US monthly minimum wage amount.

Previously ranked as the service with one of the worst payouts, Spotify reportedly pays $0.00437 per play.  That number varies per artist, with award-winning cellist and composer Zoe Keating receiving on average $0.00543 per play.  Typically, artists will need around 336,842 total plays to earn $1,472.

Right behind Spotify, Amazon now pays $0.00402.  Artists will now need around 366,169 total streams to earn the monthly minimum wage amount in the US.  Previously, Amazon paid indie artists $0.0074 per play.

Pandora has historically paid indie artists dismal amounts in terms of royalties.  The company now pays $0.00133 on Pandora Premium.  Artists will need 1,106,767 total plays on Pandora Premium just to earn $1,472.

Historically, YouTube hasn’t ever been an artist-friendly platform, thanks to its horrendous payouts.

The popular video platform pays artists $0.00069.  To earn the monthly minimum wage amount in the US, artists will need around 2,133,333 total plays on YouTube.

Now, The Trichordist has released its list of streaming music payouts.

What one indie label earned from streaming.

Gathering its data from a single source – a mid-sized indie label with an approximately 250+ album catalog which generates almost 1 billion streams – The Trichodist has published its list of streaming music service payouts.

According to the data, Amazon Music Unlimited has the highest per-stream payout rate at $0.01175.  An artist would need around 125,277 plays to earn the US monthly minimum wage amount.  Amazon’s platform only had a 0.68% share of all the label’s streams, generating 4.04% of all revenue earned.

Napster came next, paying $0.01110 per play.  Artists on Rhapsody’s streaming music service would need around 133,818 plays to earn $1,472.  The service had a 0.14% share of all streams, generating 0.80% of all revenue earned.

TIDAL fell to third place, paying $0.00927 per play.  Artists on Jay-Z’s beleaguered streaming music service would need around 158,792 plays to earn the monthly minimum wage amount.  The service had a 0.21% share in the label’s streams, generating 0.98% of all revenue earned.

In fourth place, Deezer reportedly paid $0.00567 per stream.  Artists on the platform would need around 259,612 plays to earn $1,472.  The French-based service had a 0.91% share in streams, generating 2.6% of all revenue earned.

Google Play Music came behind Deezer, paying $0.00543 per play.  Artists would need around 271,087 streams to earn the monthly minimum wage amount.  The service had a 1.12% share in the label’s streams, generating 3.08% of all revenue earned.

Apple Music paid indie artists around $0.00495 per stream.  Indie artists would need around 297,374 streams to earn $1,472.  The service had a 9.95% share in overall streams, generating a significant 24.97% of all revenue earned.

Amazon Prime Music – labeled Amazon Digital Services – came in seventh place, paying $0.00395 per play.  Artists would need around 372,658 plays on the platform to earn the US monthly minimum wage amount.  The service had a 0.95% share in streams, generating a low 1.90% of all revenue earned.

Spotify came close behind Amazon Prime Music, reportedly paying $0.00311 per stream.  At that rate, indie artists would need 472,312 streams to earn $1,472.  The service had a whopping 29.22% share of all the label’s streams, generating 48.93% of all revenue.

Among the worst paying services, Pandora ranked in ninth place, paying $0.00155 per play.  Artists would need 949,677 plays to earn the monthly minimum wage amount.  The service had a 3.86% share in the label’s streams, and generated a dismal 3.03% of all revenue.

YouTube ranked as the worst offender, paying artists a dismal $0.00028 per play.  An artist would need 5,257,143 plays to earn $1,472.  In terms of all streams for the label, the service had a whopping 48.58% share, generating only 6.99% of all revenue.

The key takeaways.

At first glance, only one streaming music service paid more to the indie label: Amazon Music Unlimited.

The rest paid far, far less than they have to individual indie artists.

Take Spotify, for example.  According to independent data, and as explained above, the streaming music giant pays $0.00437 per play.  Yet, the company paid the label $0.00311 per stream.  Spotify’s streams also accounted for nearly 30% of its billion streams.

Apple Music’s per-stream rate saw an even more dramatic drop for labels.  In 2017, the service reportedly paid $0.00783.  Last year, that number decreased to $0.00495.

Comparing both services’ payouts to independent labels, The Trichordist explained,

“Apple Music still lead in the sweet spot with about 10% of overall streams generating 25% of all revenue (despite the per stream rate drop).  Spotify by comparison has nearly triple the marketshare in streams than Apple Music but generates less than double the revenues on that volume.”

Also, despite multiple denials of the ‘value gap,’ YouTube continues cheating the music industry in terms of fair payouts.

The Trichordist explains,

The biggest takeaway by far is that YouTube’s Content ID, (in our first truly comprehensive data set) shows a whopping 48% of all streams generate only 7% of revenue.  Read that again.  This is your value gap.  Nearly 50% of all recorded music streams only generate 7% of revenue.

It also remains unclear how much streaming music services do pay major labels, which presumably take a higher percentage.  Yet, from what we can tell, indies receive far, far less than major labels do.

You can view the complete infographic below.

 


 

11 Responses

  1. Mike O.

    “the company paid the label” What about including what the company paid the PRO or what the company paid on the mechanical? Streaming can be dismal, but there’s definitely more than one piece of the pie out there.

    • Bruce

      Great article — thanks. As Mike O. mentioned, does this not include the PRO and mechanical fees, where applicable? Or are these overall average streaming payments for all the required royalties/fees? And if the service has a free & paid tier are these average payments for both? Thank again.

    • Faza (TCM)

      PRO payments aren’t a revenue stream for a label absent a specific set of circumstances (artist-songwriters who are signed to a 360 deal), so a label wouldn’t necessarily know.

      Not that it matters much, because the composition side of royalties is worth a lot less – roughly a tenth of what you’d expect to get on the phonogram side.

      • Anonymous

        It’s closer to a fifth than a tenth, but otherwise yeah, unless the label also happens to control publishing rights, they won’t have the PRO/mechanical numbers.

  2. Roy Smith

    While I wholeheartedly agree with the point of this post, comparing the payout to minimum wage just confuses the issue. A person working for minimum wage would be expected to get that wage from a single employer, but musicians post their music on as many streaming services as they can, so the comparison of each service to a minimum wage makes no sense. If you are stuck on the “minimum wage” as the hook of the story, perhaps average the payout on all the platforms and do the math so your headline says “Musician needs 250,000 plays on streaming platforms to earn minimum wage”.

    • Anonymous

      250,000 divided by 100 = 2,500 X .06 = $150.00
      On FM Radio that would be:
      250,000 X .08 = $20,000
      Streaming Does Not Pay !

  3. Pedro

    Small suggestion. Wouldn’t one simple table be much better than thousand words? Now it is hard to grasp all the info while you could just take the numbers from the label and reshuffle them by per stream payout… Otherwise interesting stuff! Cheers!

  4. Dave Kaspersin

    Streaming is Killing The Music Industry !
    There is a lot of discussion regarding the fair payment of writers and performers of music
    that is being streamed – whether for a very small price per stream or for free.

    At Dynamic, where we have many, many recordings available on CD Baby, iTunes and Amazon,
    we feel that our income and our Artists’ incomes have been adversely affected by the policies
    in place right now. A look at our earnings demonstrates that through the first quarter of 2016,
    our revenues are only at 67% of the same quarter last year.
    2015 was down slightly from 2014, and I’m guessing that if we had not
    added additional titles during 2015, the difference
    may have been more significant. If this trend continues through
    2017, being down 33% in income is not good.

    And we’re only one company – if other musicians, record
    companies, independent performers, etc., are seeing the
    same trend, it’s a serious loss in income to people who are not being
    compensated properly for streamed music.

    We believe we should all unite with the others who have taken a
    stand to gain reasonable payment for artistic endeavors.

  5. Curious

    Forgive my ignorance but as a non- musician I can’t understand how this happens. As an unknown starting out, I get it. You want your stuff heard. But how do successful artists and more importantly, their reps/labels, allow it? If I watch a TV show or movie online I have to rent it for a sizable fee. How/why have labels/artists allowed their work to essentially been used for almost free?

  6. Name

    There are millions of so called musicians who copy-paste the beats and samoles. All modern music sounds same, so, being cheap is what you get.
    Almost everyone is after what made someone else famous, but not true art and feeling is coming out.
    Streams work great for mainstream media artists since they come up with same sounding song over and over again and it keep getting clicks only because of artists fame.
    Video killed the music, said Zappa