The Apple Music payment rate for artists and labels is, in principle, a cash flow, according to a company letter posted on the artist’s dashboard and first reported by Wall Street Journal. This payment rate is higher than Spotify, which has a confusing variable rate scheme that practically exceeds half a penny per stream.
Announcing a penny-per-stream rate is a nice gain in PR for Apple Music, because it’s 1. very simple and 2. Spotify hates talking about its per-stream payments, which the company insists are a misleading figure. Seriously, it just launched a whole website last month called Loud & Clear, designed to help artists and fans understand how payments work, and much of it is dedicated to explaining why per-stream rates aren’t the right thing to do. to focus on. There are a lot of copies like this:
In the age of streaming, fans don’t pay per song, and services don’t pay per stream, so we don’t think a “flow rate” is a significant number to analyze. However, we understand that artists find it useful to calculate an effective “on-stream” rate or, in other words, an income-to-flow ratio – by dividing the total size of the royalty fund on Spotify (the numerator) by the total number of music streams on Spotify (denominator). Both numbers grow incredibly fast each year.
There are a number of factors that contribute to the fact that this ratio seems small, which we understand can hair problematic.
Right. It’s important to note that Spotify runs a massive advertising music service with a very different economy than the paid Spotify Premium level, while Apple Music only offers a paid service. And Spotify is much larger, with 345 million users in total, of which 155 million pay Spotify Premium customers. (It’s hard to calculate how big Apple Music is right now; the company’s latest public number is “more than 60 million subscribers” as of June 2019, and the latest estimates put it at 72 million.)
In any case, Spotify’s argument is that it pays lower variable rates for many more streams, while Apple is happy to say that it pays a higher and simpler rate for fewer streams. No argument really solves the essential economic problem of streaming, namely that most artists can’t make a living just from streaming royalties, which is why everyone sells NFTs and hopes the concert business will be back soon. .