Apple’s Letter to Artists About Streaming Music Payouts

Anne Steele, Wall Street Journal:

Apple Music told artists it pays a penny per stream, according to a letter viewed by The Wall Street Journal.


Artists aren’t paid directly by streaming services, so a single play of a song doesn’t result in a penny going into that artist’s account. Instead, streaming services pay royalties to rights holders — a group that includes labels, publishers and other distributors — which in turn pay artists based on their recording, publishing and distribution agreements. Both Apple and Spotify pay rights holders based on the share of total streams their artists garner on each service.

Yet artists cite the per-stream pay rate as an indicator of their earnings. Major labels say the average monthly streams per user is a better measure of the streaming economy, and growing numbers of streams mean more money coming in for artists. Both Spotify and Apple, they say, are at or near the 1,000-streams-per-listener monthly benchmark that is seen as a success.

Jem Aswad, Variety:

However, nuances were lost in some of the wording: The first sentence of the WSJ article reads: “Apple Music told artists it pays a penny per stream” — which does not specify who it pays a penny per stream — and while the main headline on the article reads, “Apple Music Reveals How Much It Pays When You Stream a Song,” a secondary headline reads, “Apple Music pays artists twice as much as Spotify per stream.”

It is not hard to see how the inaccuracies, which were not stated but may have been inferred from the letter and the article, could lead some artists to think that they’ll be getting a penny from Apple every time their music is streamed, or even that the company has increased its rates to pay artists a penny per stream, even though the letter specifically states that “royalties from streaming services are calculated on a stream share basis” (i.e. a song’s percentage of the service’s total number of streams, which means Apple Music does not pay royalties on a per stream basis). Ultimately, the variables make apples-to-apples comparisons (sorry) nearly impossible, but multiple sources say the two companies’ rates are actually much closer than Friday’s headlines would imply.

The penny-per-stream average is clearly an inaccurate way to measure artists’ earnings, but it does lend itself to a trivia game of estimation with your favourite songs and albums. Mike Rockwell:

My most played artist in Plex has 627 plays. Based on Apple’s average payout of $0.01 per stream, that would have resulted in $6.27. But I’ve purchased four albums for a total of about $40.

This inspired me to look in my library at some high play-count records I have to see how much they would have cost if they were streamed instead. For example, my total play count of all of the songs on “The Fragile” is 1,392. If I had streamed all of those plays, Apple apparently would have paid Trent Reznor and company about $13.92. But I added this rip of the album to my library in June 2009 — which is when I bought a CD copy for probably about $25 — and, if I had to pay $10 per month for Apple Music, it would have cost me over $1,400 to maintain my library over that time.

Of course, that’s not a per-album rate. I get millions of songs for my $10 per month. In about the same timeframe in 2009, I also added Burial’s “Untrue” to my library. I have played the thirteen songs on that album 684 times in total, leading to an estimated payout of $6.84. My CD copy of that album probably cost $15, of which William Bevan probably earned just a few pennies. Apple Music obviously has not existed since 2009 but, if it had, I cannot work out how much less artists would have made if I had streamed all of my music instead of buying physical copies.

Somehow, we are still paying just $10 per month for music in an era where streaming must be paired with live performance to have any hope of generating an income for an artist, all the while fighting the paradox of streaming music, and artists are still getting screwed in the middle of all of it. There would not be a music industry without music, but the industry gets all of the money while musicians still have to fight for scraps.