Apple Music has issued a note to artists, labels and other rights holders regarding the rates and practices of its royalty, in which the streaming service claims to pay an average of one cent per stream, as The Wall Street Journal reports and Pitchfork can confirm.
“While royalties from streaming services are calculated based on a stream share, a piece still has value,” the note, viewed by Pitchfork, reads. “This amount varies by subscription plan and country, but averages $ 0.01 for individual plans paid for by Apple Music in 2020. This includes label and publisher fees.”
Much of the note appears to be addressed indirectly to main competitor Spotify. At one point, Apple is committed to paying the same 52% rate for all labels. “While other services pay a substantially lower rate to independent labels than they do to major labels, we pay the same rate for all labels,” the note reads. “This means that artists can distribute music however they like, knowing that Apple Music will pay the same rate. Sign with a label or stay independent; we believe in the value of all music. ”
The memo seems to refer to Spotify Discovery Mode, which gives artists the option to opt for a lower promotional royalty rate in exchange for a boost in custom algorithmic playlists.
The memo states: “We believe that we pay each creator the same rate, that a piece has a value and that creators should never pay for the presentation.” Later, it is written: “Apple Music’s worldwide taste-producing team takes care of 30,000 editorial playlists. These taste producers select music on the basis of merit and do not ask anyone to accept a reduced royalty rate in exchange for the presentation. The same goes for Apple Music custom playlists and algorithmic recommendations. ”
It should be noted that streaming companies such as Apple Music and Spotify do not pay artists directly and instead pay record labels, distributors and performance rights organizations such as ASCAP and BMI, which then pay artists. Near the end, Apple shared its research results on “alternative royalty models.”
“Our analysis showed that they would result in a limited redistribution of royalties with a varied impact on artists,” the note reads. “The playback rates would cease to be the same for each play of a song. But more importantly, the changes would not increase what all creators in streaming gain. Instead, these changes would shift royalties to a small number of labels, while giving less transparency to creators everywhere. ”
Apple’s announcement comes at a time when music industry artists are calling for streaming services to move to more equitable royalty rates. The Union of Allied Musicians and Workers (UMAW) has campaigned for Spotify – which has a much larger user base than Apple Music, with 155 million paid subscribers compared to Apple Music’s 60 million as of June 2019 – to he starts paying a penny for electricity. In March, Spotify launched the Loud & Clear transparency initiative in an effort to open more communications with the artist community.
Read “Meet experimental musicians who have built their own streaming service” on Pitch.