Apple Music Says It Pays One Penny Per Stream — 2-3 Times What Spotify Pays

Apple Music streaming royalties

Photo Credit: Giorgio Trovato

Apple Music streaming royalties are at least double what Spotify pays artists — and likely a lot more — according to the company.

The Wall Street Journal obtained an advanced look at a letter Apple Music sent to artists, labels, publishers, and other stakeholders. The disclosure was uploaded today via the artists’ dashboard in Apple Music and was also delivered to partner labels and publishers. It’s a more transparent look at music streaming royalties between the two behemoths in the space.

Just last month, an artist activist group demanded that Spotify pay artists one penny per-stream, a request that was flatly dismissed. Indeed, Spotify has actively committed to fighting the penny-per-play push coming from the Union of Musicians and Allied Workers, who organized a protest outside Spotify’s offices in New York.

But instead of dismissing the notion, Apple is now embracing the penny-per-play rate structure — and putting it in writing. Apple Music’s penny-per-stream royalty rate is roughly double or triple what Spotify pays per-stream, according to stats culled over the years by Digital Music News.

The protest was in response to Spotify’s ‘Loud and Clear’ website, which the company claims brings transparency to its royalty structure. But as the UMAW points out, the website doesn’t address Spotify’s multiple sources of income from subscriptions, ads, payola schemes for playlist promotion and algorithm prioritization, or any other income streams.

Spotify’s royalty rate is calculated by Digital Music News to be around $.0038 to $.0056 per stream.

Apple Music paying a penny-per-stream is exactly what many artists are demanding. It’s a direct dig at Spotify that highlights Apple pays artists more – a whole lot more. Apple’s payments come out of its monthly subscription revenue from users, which could cause fluctuations.

Apple was careful to note that it pays the exact same percentage of its royalties to labels and publishers as Spotify — which works out to roughly 52 cents on every dollar for labels. For signed artists, that money needs to funnel through their labels, a pass-through that neither Apple nor Spotify controls. The difference, however, is that Apple has always had a paid-only model — something the company has insisted upon from the start — which means the top-level amount is always greater than Spotify’s.

While Apple says it pays 52% of subscription revenue, or 52 cents on every dollar, to record labels, Spotify generates revenue from subscriptions and its ad-supported tier and pays ‘two-thirds’ of every dollar of revenue to the rights holder. That ends up working out to a very similar payout percentage, though Spotify’s per-user (and per-stream) revenue baseline is far lower.

There’s also a fair amount of hair-splitting happening after the disclosure. Spotify is already on the defensive, first by claiming that per-stream calculations are irrelevant, though in fairness, artists are paid based on how many streams they generate (which is then multiplied by the per-stream rate received). The other counter-argument Spotify offers is that its volume is higher, though Apple and Spotify have been neck-and-neck in the American market, with Apple surpassing Spotify’s US-based subscriber count at one point.

Currently, Apple Music has more than 60 million Apple Music subscribers. Spotify has around 155 million Premium subscriptions out of 345 million total active users on the platform. Amazon Music Unlimited has around 55 million subscribers and is growing quickly to catch up with Apple.

Accordingly, Spotify pays much more revenue to the music industry than Apple does, simply because it has many more users. But Spotify’s average per-stream payout rate is lower because the ad-free tier doesn’t generate as much revenue as its subscription does.

The pandemic’s massive effect on the live touring industry has artists scrambling for new revenue. It also has them looking at music streaming as a potential revenue source, which has grown in the last year. Sadly, streaming remains an incredibly poor substitute for touring, especially since it can’t be used to stimulate live concert revenues. That is putting far more pressure on artists to generate more revenue online, and is likely leading to the scrutiny placed on Spotify’s per-stream payouts — as well as Apple’s.

The Wall Street Journal has shared a portion of the letter about Apple Music streaming royalties, which begins:

“As the discussion about streaming royalties continues, we believe it is important to share our values. We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for ‘featuring’ music in prime display space on its service,” Apple shares.

Then, later in the letter: “Our average per play rate is $0.01. While royalties from streaming services are calculated on a stream share basis, a play still has a value. This value varies by subscription plan and country but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.”

13 Responses

  1. Avatar
    Blanches 75087

    Apple Music pays more on a per-stream basis, but hardly anybody uses it. Apple Music’s subscriber numbers are completely phony. Ask anybody who gets royalties.

    Spotify has roughly double the number of paying subscribers of Apple Music, but I have consistently received 10 to 15 times more money on a monthly basis from Spotify for years. How is that possible? Especially with Spotify paying such a smaller per-stream?

    There can only be one explanation. Apple is faking their subscriber and usage numbers for PR purposes.

    • Avatar
      Scooby

      There can be many explanations, such as Apple Music subscribers cater to a different demographic and/or have different tastes than the music you’ve published.

      • Avatar
        Blanches 75087

        Scooby,

        I guess you missed the part in my first paragraph where I wrote, “ask anybody who gets royalties.”

        Do you receive royalties from streaming? You sound like you don’t.

        I’ve got all my numbers from each service.

        I network with a lot of other musicians who receive streaming royalties. It’s not just one style of music represented. We talk about the different services.

        All of us have experienced the same thing: we earn significantly more money from Spotify than we do from Apple Music.

        Do you have any proof that Apple Music subscribers cater to a different demographic or have different tastes? Of course you don’t.

        But we have seemingly countless examples of Apple, as a corporate entity, lying about their businesses, making their computer and mobile devices impossible to repair, engaging in cartel behavior with the major labels, using child labor, avoiding taxes, and other legal abuses.

        Why wouldn’t they lie about subscriber numbers? There’s no way to verify it.

        One thing that is true: Apple Music tends to pay around a penny a stream.

        But YouTube Music is currently paying around a $0.0125 a stream. I’ve even seen some Amazon Music Unlimited streams in the US that are paying around $0.015. Napster often pays over a penny a stream.

        You’d know this if you ever released music and received royalty statements, or had musician friends who earned money from streaming and weren’t signed to a label.

      • Avatar
        Well Actuakky

        I’m subscribed to Apple & have a few friends who use it, too. Actually because most people have iphones it’s the most convenient music streaming service. I also distribute music and the Apple numbers are comparable to Spotify. Not seeing your point.

        • Avatar
          Blanches 75087

          In the US, iPhones have about 60% market share to 40% Android. Worldwide, it’s 75% Android and 25% iPhone. Apple Music is available in 167 countries. By the end of 2021, Spotify should be available in over 170 countries. Royalty rates outside of “first world” Western countries are considerably less due to their standards of living.

          When you say that Apple numbers are comparable to Spotify, what numbers are you comparing? Stream counts or earnings?

          Lots of people distribute music, but most earn nothing or very little from it so I have no idea what your numbers are. My income these days is from streaming, publishing, samples, and syncs. There are other things like downloads and physical media, but that has fallen off in the past couple of years.

          You may very well see equal Apple and Spotify earnings, but I’ve been at this a long time. Same with my friends and acquaintances. We’re all seeing the same thing over the years: Spotify earns us a lot more than Apple. Significantly more.

          Why is that? That’s a good question to ask. Sure, it could be different demographics, but I doubt it. I’ll make sure to ask this question on future Zoom calls I have with other musicians in the industry.

  2. Avatar
    Roberto

    Musicians missed a unique opportunity to build their own Platform, where they could sell their creative work directly to the fans thus eliminating all middle men. When you see what has happened to the music business you have to wonder why the creative Community sat back and did nothing while all these crooks provided new Platforms and got rich doing so! And how did Google get away with the Pirate site, Youtube where they make more money than the musicians while using the work of the musicians to make millions! Very sad what has happened but the fans are really the ones to blame. They all want free music (after getting music for free from Illegal sites) and free music means there are now 70% FEWER Professional musicians. Say goodbye to quality music in 2021!

  3. Avatar
    Tom Hendricks editor of Musea

    Time to talk about the Music Revolution idea of pennies per play that forced the majors to talk about it.
    Musea zine, since 1992 has suggested the penny per play model for years.
    Just because the major music media would not talk about Musea leading thousands of musicians against the Big three labels, that control the music business and have ruined it; does not mean they didn’t suggest this long ago , years ago.
    This suggests a time for the media to be accurate on this issue, even if it upsets Warner, Universal, and Sony.

  4. Avatar
    Johnny

    Most artists receive almost nothing from streaming. The majority of revenues goes to the RECORD COMPANIES and not the artists. A little misleading this one penny to the artists! Maybe to some artists who release songs that nobody ever hears!

    • Avatar
      Teddy

      So the problem is with the accounting departments within record labels, as usual.

      • Avatar
        Anon

        It’s not an accounting issue, it’s a shiny object issue. Too many artists are enthralled with the idea of having a record deal, effectively selling their souls in the process. Savvy (and talented) artists, don’t need labels as prior generations did. Cheaper production and social media allow artists the ability to remain independent, they just have to be willing to get their hands dirty.

        • Avatar
          Anon

          No, it is an accounting issue, stemming from corporate greed. There is value in labels with their contacts, distribution, marketing and global reach. Going the DIY route has been proven to not match the power of the machine. Artist just need to receive what they have been paid, as opposed to that money going to labels and getting “lost”. It’s been this way for decades. Remember all the front money from dot coms in the late 90s and early 2000s? Little to none of that made it to the artists.