Apple Music pays a penny per stream on common

Patrick

Apple Music’s cost fee for artists and labels is a penny per stream on common, in response to a letter from the corporate posted on its artist dashboard, considered by The Verge, and first reported by the Wall Avenue Journal. (And now posted in full at 9to5 Mac.) That cost fee is increased than Spotify, which has a complicated variable fee scheme that mainly tops out at a half-penny per stream. Apple says within the letter that its charges differ by subscription plan and nation however common to a penny-per-stream.

Asserting a mean penny-per-stream fee is a pleasant PR win for Apple Music, since it’s 1. quite simple and a couple of. Spotify hates speaking about its per-stream funds, which the corporate insists are a deceptive determine. Critically, it simply launched a whole web site known as Loud&Clear final month designed to assist artists and followers perceive how funds work, and a superb chunk of it’s dedicated to explaining why per-stream charges aren’t the precise factor to concentrate on. It’s lots of copy like this:

Within the streaming period, followers don’t pay per track and providers don’t pay per stream, so we don’t imagine a “per stream fee” is a significant quantity to research. Nonetheless, we perceive that artists discover it helpful to calculate an efficient “per stream” fee or, in different phrases, a revenue-to-streams ratio — dividing the whole measurement of the royalty pool on Spotify (the numerator) by the whole variety of music streams on Spotify (the denominator). Each of those numbers are rising extremely shortly yearly.

There are a variety of things that contribute to that ratio trying small, which we perceive can appear problematic.

Proper. It is very important word that Spotify runs an enormous ad-supported music service with very totally different economics to the paid Spotify Premium tier, whereas Apple Music solely gives a paid service. And Spotify is method larger, with 345 million complete customers, of which 155 million are paying Spotify Premium clients. (It’s exhausting to place good numbers on how huge Apple Music is at present; the corporate’s final public quantity is “greater than 60 million subscribers” from June 2019, and newer estimates have it at 72 million.)

In any occasion, Spotify’s argument is that it pays decrease variable charges on way more streams, whereas Apple’s completely satisfied to say that it pays a better, easier fee on fewer streams. Neither argument actually solves the important financial drawback of streaming, which is that the majority artists can’t make a residing on streaming royalties alone, which is why everyone seems to be on the market promoting NFTs and hoping the live performance enterprise comes again in power quickly.

Correction: After viewing the letter from Apple to artists, this piece has been up to date to notice that the penny-per-stream fee is just not a flat fee, however what Apple claims to pay on common.

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