A new report from the Wall Street Journal reveals how much Apple Music pays artists per stream, and it ends up being almost twice as much as rival streaming service Spotify.
In a letter to artists delivered today, April 16, 2021, Appl;e Music disclosed it pays a penny per stream, which is pretty competitive for streaming services.
Spotify, in turn pays between 0.003 to 0.006 cents per stream, depending on the deal, so you do get paid more per stream than Apple. The caveat is Spotify has a far larger user base, and with their free tier, far more streams. Apple's streaming model relies solely on distributing subscription earnings.
Apple reported more than 60 million subscribers to their music service in June 2019. By comparison, Spotify has 155 million subscribers with a total of 345 million active users, including the free tier. There is no free tier to Apple Music.
The Wall Street Journal notes that industry experts say the rates can dip lower.
According to the U.S. government, the poverty line for a single-person houshold in the U.S. is $11,770, which he rounded up to $12,000. Of course, this doesn't take into consideration that there is no way any single person can live off of $12,000 in a major city, let alone any mid-size city. But using that number, Shotwell then determined how many streams on Spotify would earn an artist $12,000.
The average stream pays about $0.006, so the quick answer is 3 million plays a year to earn an income of $12,000.
I say quick answer because that doesn't take into account if this artist is on a label and if they have management, all of which would require a percentage of the earnings to be split up even more.
And, once you start doing even more math, and take into account an artist with a family, and bands with multiple musicians who have families, you can see how the numbers just won't work.
"The poverty line for a family of four (2 adults, 2 children) at $24,250. Using the same average royalty rate, a musician would need 6,062,500 Spotify streams to earn that amount of gross income.
“These numbers get much bigger when the musician is part of a larger group. If a band has four members and all four have families where they were the sole source of income, the group would need to generate 24,250,000 Spotify streams to gross enough so each member’s family would be at or above the poverty line.”