Exactly how much streaming services pay out to musicians in royalties has always been a hot topic. In truth, there's no simple answer, but we'll try to explain how much your music could be earning in streaming royalties from platforms like Spotify, Apple Music and more as well as the different factors that affect royalty payments. There are lots of factors that affect how much money one stream is worth in royalties.
There’s Not Much Money to Make from Streaming
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The disruptive effects of peer-to-peer file sharing had slashed music revenues in half, casting serious doubts over the future of the industry. Ringtones provided a brief earnings bump , but it was the growing popularity of premium streaming services that proved to be the savior of record labels and artists. In short, people showed they were still willing to pay for music. Although most forecasts show streaming services like Spotify and Apple Music contributing an increasingly large share of revenue going forward, recent data from The Trichordist reveals that these services pay out wildly different rates per stream. Note: Due to the lack of publicly available data, calculating payouts from streaming services is not an exact science. One would expect streaming services to have fairly similar payout rates every time a track is played, but this is not the case. In reality, the streaming rates of major players in the market — which have very similar catalogs — are all over the map. Below is a full breakdown of how many streams it takes to earn a dollar on various platforms:. Napster , once public enemy number one in the music business, has some of the most generous streaming rates in the industry.
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As the battle over streaming royalties continued, we look back at a proposition from Apple that could have revolutionized streaming payouts. Whether or not instruments of the U. The fact is, they do, via the Copyright Royalty Board, whose three judges ruled last year that composers and their publishers would, by , be paid via the higher outcome of two formulas: either i as The digital services are demanding a cap is placed on the maximum amount of money they would have to pay publishers each month. They should get a consistent, predictable, and transparent per-play rate, and then it is up to the services to run the most innovative and efficient businesses possible for which they can recoup the upside. Everyone pays the same amount. Everyone receives the amount. It is simple, transparent, predictable, and fair. Spotify was arguably even more forthright in its comments on the matter.
The vinyl revival has kept the vintage format of buying music steadily increasing. First, we should untangle a key term — royalties. Royalties are basically the amount paid to any rights-holders when a song or any creation is sold, distributed, used in other media like a commercial or movie , or monetized in any way. Each song is split into two separate copyrights: composition lyrics, melody and sound recording owned by the record label and recording artists. The royalties are split among all these people, at various rates negotiated amongst record labels and agencies. To earn revenue, music streaming services are either advertisement-supported or subscription-based.
