Here’s the Full Text of Apple’s ‘Penny-Per-Stream’ Letter to Artists, Labels, and Publishers

Apple Music letter

Photo Credit: Soundtrap

Here’s the full body of the Apple Music letter sent to artists about its royalty payments. 

The letter paints a stark picture between how Apple Music and Spotify handle artist payments. It also points out that Apple Music is not a ‘pay-to-win‘ service. It doesn’t allow artists to accept a lower royalty rate in exchange for featuring content on Apple Music. That alone may be one of the biggest differences between Apple and Spotify’s royalty rates. 

This update, which is part of a new series of newsletters, looks at how creators earn royalties from Apple Music and how these have grown over time.

We believe in the value of music and paying creators fairly for their work. Since we launched the iTunes Store in 2003, we have helped millions of artists and songwriters make a living from music. 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.

We pay the same 52% headline rate to all labels.

While other services pay some independent labels a substantially lower rate than they pay major labels, we pay the same headline rate to all labels. This means artists can distribute music however they like, knowing Apple Music will pay the same rate. Sign with a label or stay independent; we believe in the value of all music.

We pay the same headline rate for all compositions.

Without songwriters, there wouldn’t be recordings. That is why we have paid every publisher and licensor the same headline rate within each country. It’s also why we have invested millions to optimize publishing operations to ensure songwriters are paid as quickly as possible.

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.

We do not pay a lower royalty rate in exchange for featuring.

Apple Music’s team of global tastemakers hand-curate 30,000 editorial playlists. These tastemakers select music based on merit and we do not ask anyone to accept a lower royalty rate in exchange for featuring. The same is true for Apple Music’s personalized playlists and algorithmic recommendations.

As a result of our commitment to these values, Apple Music paid out royalties for more than 5 million recording artists around the world in 2020, over 1 million more than in 2019. The number of recording artists whose catalogs generated recording and publishing royalties over $1 million per year increased over 120% since 2017, while the number of recording artists whose catalogs generated over $50,000 per year has more than doubled.

Like others, we have looked at alternative royalty models. Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists. Per play rates would cease to be the same for every play of a song. But more importantly, the changes would not increase what all creators earn from streaming. Instead, these changes would shift royalties towards a small number of labels while providing less transparency to creators everywhere.

At Apple Music, our focus remains on artists and songwriters and finding new and innovative ways for all creators to make a living from music. With Apple Music, music fans around the world enjoy an uninterrupted ad-free experience while knowing their data is kept private and used only to enhance the overall music experience for them.

5 Responses

  1. Avatar
    Meg

    Ashley, your bias against Spotify truly makes me laugh. Would be great if you could also mention the current anti-trust suit in the EU over the 30% app store commission that Apple is trying to place on apps like Spotify. Tell me how taxing all sales made through the app store – including music streaming subscriptions – is fair business practice and how that does anything to help artists except give apple an advantage?
    We get it, you love your iPhone, but try to at least have a sense of journalistic integrity when you write about something as complicated as the streaming model and how Apple doesn’t play fairly. Your bias is showing 🙂

    • Avatar
      JAS

      Meg, I agree.

      I do have some Apple products, but I have never been a fan of some of their business practices.

      Apple doing the ‘right thing’, for the Artists? I highly doubt it. They have run the numbers and come up with something that ‘appears’ to support them but really works for Apple.

      When iTunes was paying $.99/song, I thought the price was fair, until I found out the Artist only got $.15, the rest went to the record companies.

      I am a little on the fence with Spotify. I am not sure they treat lesser Artists fairly.
      Not based on the per stream rate, but actually paying the rate fully to all levels of Artist.

      I feel the rate is fair, as when a song is on the radio, the artist earns basically a nickel, but thousands of people hear it simultaneously, so the ‘per listener’ rate is actually lower than the streaming rates.

      There have been several instances of Artists getting cheques way smaller than the streaming numbers would imply.

      Unfortunately, the music business has always centered more around greed than Art.

      Cheers

      • Avatar
        Blanches

        JAS,

        You sound like you’re from a country other than the USA.

        US radio stations don’t pay the recording artists for plays. US radio only pays public performance royalties to songwriters through PROs.

      • Avatar
        Meg

        The music industry is most certainly centred around labels, and so when we talk about artists being unfairly paid, let’s start pointing the finger to their labels who keep the majority of the profit.

        When Spotify pays out the majority of their profits (75%) to rights owners, and artists aren’t getting enough of a cut, that should make those artists question the people who control their music and pay their paycheque.

  2. Avatar
    Blanches

    Let’s not talk about Apple’s long-documented crimes when it comes to child labor, slave labor, and evading taxes.

    Let’s not talk about how Apple Music likely inflates their subscriber count. I’m not the only artist who earns far more money from Spotify than Apple Music. It’s been that way since Apple Music showed up on the scene. Ask other musicians who earn a living from streaming (yes, we exist). Apple Music pays almost 3x as much as Spotify per stream, yet I often earn more than 10x on Spotify what I do on Apple Music.

    Apple talks about “hand curated” playlists. What kind of Dude Bro language is that? Shouldn’t they be saying “ear curated”? Or “human curated”?

    I know musicians who have made numerous public playlists on Apple in specific genres using their music and other popular music. Their public playlists never get any plays, and they can check it via Apple Music For Artists. If you do a search for the playlist on Apple Music, only the “hand curated” Apple playlists show up in the search results, and it’s usually something the industry is pushing. At least with Spotify you can make a public playlist, search for it a day or two later, and see it in the results.