Apple Music pays artists and labels a penny per stream on average, according to a letter it posted on its artist dashboard last week, where it says it believes in “the value of music and paying creators fairly for their work.”
“While royalties from streaming services are calculated on a stream share basis, a play still has a value,” the letter read. “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.”
The company also mentioned in the letter that it pays the same 52 percent headline rate to all labels, pays the same headline rate for all compositions and does not pay a lower royalty rate in exchange for featuring.
As reported by Variety:
“In the letter, Apple says it pays 52 percent of subscription revenue, or 52 cents of every dollar, to record labels. Spotify, which generates revenue both from subscriptions and its free ad-supported tier, says it pays ⅔ of every dollar of revenue to rights holders, with 75 percent to 80 percent of that going to labels, which translates to 50 to 53 cents on the dollar, depending on agreements between the service and different labels.”
The Union of Musicians and Allied Workers took to Twitter last week following the news, in an effort to “demand greater transparency,” and wrote that Apple’s payment methods are “doable for streaming companies, including Spotify which currently averages $0.0038 per stream.”
“If Apple can pay a penny per stream, then Spotify can too,” the union wrote. “We also know that paying a penny per stream is only a starting point to righting the wrong of the streaming economy. This adjustment alone will not make the music industry sufficiently equitable or fair.”
Previously, Spotify has launched website Loud&Clear to help artists understand their payments, explaining why it doesn’t believe in a “per stream rate.”
“Still, we understand that artists find it useful to calculate an effective “per stream” rate or, in other words, a revenue-to-streams ratio — dividing the total size of the royalty pool on Spotify (the numerator) by the total number of music streams on Spotify (the denominator),” the site read. “Both of these numbers are growing incredibly quickly every year.”
