While everyone in the music business wants to know what the various streaming services are paying out to artists, the number of variables involved in determining the actual amount are so many that it can be difficult to get any more than an educated guess. Here we look at a chart that outlines, with some accuracy, what each platform is paying.
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Guest post by Bobby Owsinski of Music 3.0
Everyone wants to know the royalty rate paid by the various streaming services, but when they compare most charts with their own royalty statements they’re surprised. That’s because there are so many variables that goes into the royalty calculation that every chart you read (including the one below) is the best guess average that applies to no one in particular.
Want to know some of the variables? How about:
- the tier the streams come from (paid subscription pays more than freemium)
- the country the streams come from
- the type of service (interactive, like Spotify, pays more than non-interactive, like Pandora)
- if the service is bundled with another service (like with a telecom like Sprint)
These are just a few, but they make a big difference between the published royalties and what you might see on your statement.
That said, there’s a great disparity in royalty payouts between the various streaming services. Check out this chart below, but be sure to read the explanation afterwards.
| Streaming service | Avg. payout per stream | # of streams to earn one dollar | # of streams to earn minimum wage* |
|---|---|---|---|
| Napster | $0.019 | 53 | 77,474 |
| Tidal | $0.0125 | 80 | 117,760 |
| Apple Music | $0.00735 | 136 | 200,272 |
| Google Play Music | $0.00676 | 147 | 217,751 |
| Deezer | $0.0064 | 156 | 230,000 |
| Spotify | $0.00437 | 229 | 336,842 |
| Amazon | $0.00402 | 249 | 366,169 |
| Pandora** | $0.00133 | 752 | 1,106,767 |
| YouTube | $0.00069 | 1,449 | 2,133,333 |
This is important! The above chart came from the Visual Capitalist, but it fails to tell you the specifics you need to know – is this the payout for the sound recording only, or does it include publishing as well? If it’s only for the sound recording, does it include both performance and mechanical royalties (where applicable, like in the case of all except Pandora and YouTube)?
Of course, the biggest omission here is how much of the royalty is going to third parities like record labels, publishers and royalty collection agencies. That impacts everything on the chart for the worse, which of course means less dough in the artist’s pocket.
That’s why you have to take the specific numbers on these charts with a grain of salt. There’s not enough detail to determine their conclusions as to how many streams are needed to make up a dollar or minimum wage.
The only thing it tells you for sure is that some streaming services appear to pay more than others, but here again, your royalty mileage may vary.
This is just a heads-up to not take streaming royalty figures as the total truth. They’re all averages at best, so be sure to check for the details before taking them to heart.