Apple Music has told artists that it pays a cent for each radio show in a book reviewed by The Wall Street Journal.
The disclosure, made in a letter to artists sent on Friday via an artist dashboard sent to labels and publishers, is part of a growing effort by music streaming services to show they are friendly to artists. At Apple Inc., it could be seen as a riposte to Spotify Technology SA, which last month shared details on how it pays the music industry for its service streams.
Apple’s pay-per-click structure – music industry experts say could sink – almost Spotify, a major music streaming service, pays music rights holders for each broadcast. Spotify pays an average of one-third to one-third of each stream, even though its larger user base builds many more streams. Apple payments are based on monthly payments from users.
Artists, managers and lawyers, still confused about the loss of watch money during the epidemic, have been demanding higher salaries in music distribution, which has grown rapidly over the past year. Many fans have joined the campaign to raise the artists’ compensation.
Apple last reported more than 60 million Music subscribers in June 2019. Spotify leads the industry with 155 million subscriptions, to 345 million active users including those who listen to free ad-supported content. Amazon said early last year that its music subscription offerings had 55 million subscribers.
“As the debate continues over the distribution of monarchy, we believe it is important that we share our values,” Apple said in the letter. “We believe in paying all creators the same amount, that the game has a value, and that creators should not be able to afford to include” music in the main display area of its service.
Artists are not paid directly for streaming services, so playing one song doesn’t get a penny in that artist’s account. Instead, broadcast services pay subscribers to rights holders, including labels, publishers and other distributors, who also pay artists according to their recording, publishing and distribution contracts. Both Apple and Spotify payment rights holders are based on the share of full streams that their artists store on each service.
Yet artists cite each payment as an indication of their income. Major labels claim that monthly user streaming is a better measure of the broadcasting economy, and rising prices for streams mean more revenue from artists. Both Spotify and Apple, they say, are close to or almost 1,000 streams per listener per month when considered successful.
In the book, Apple claims to pay 52% of the cost, or 52 cents per dollar, to record labels. Spotify, which generates revenue from subscriptions and its free ad-supported rate, claims to pay ⅔ for every dollar in copyright, and 75% to 80% of that goes to labels, translating to 50 to 53 cents. dollar, depending on the agreements between the service and different labels.
Spotify brings more revenue to the music industry than Apple, because it has more users. The average payout rate for each stream is low, however, because the average Spotify subscriber listens to more music per month than subscribers to other services. Also, in the free Spotify section, ads do not make as much money as the premium service does. Spotify said that although his free version generates less money than you paid, it brings subscribers to the end. Rope makers have collected these ideas.
“We’ve done a lot of testing that shows that when we take a free service, those listeners turn to other non-profit alternatives, which means the combined music industry loses money,” the company told Loud and Clear, an online report artist paid.