Does Apple Music Pay Artists More Than Spotify?
In the age of streaming, artists and music industry professionals debate which services provide the best payouts. If you’re an unsigned artist looking to get your music on streaming platforms, you may wonder – does Apple Music pay artists more than Spotify?
In this 3000 word guide, we’ll provide a comprehensive analysis comparing artist payouts from the two leading music streaming platforms.
If you’re short on time, here’s a quick answer to your question: Research shows that Apple Music pays artists slightly more per stream than Spotify. However, Spotify has a much larger user base, so total royalties earned by most artists is higher there.
How Streaming Services Pay Artists
Streaming services have revolutionized the way we listen to music, allowing us to access millions of songs at our fingertips. However, the question of how these services compensate artists for their work remains a topic of debate.
In this article, we will explore the basic royalty structure of streaming platforms and the significant factors that influence how much artists get paid.
Basic royalty structure
Streaming services like Apple Music and Spotify operate on a subscription-based model, where users pay a monthly fee to access their vast music libraries. Artists receive royalties based on the number of streams their songs generate. However, the exact payment structure can vary between platforms.
For example, Spotify uses a complex algorithm that takes into account factors such as the user’s country, the type of subscription they have, and the artist’s share of total streams on the platform. On the other hand, Apple Music pays artists a fixed rate per stream, which is typically higher than what Spotify offers.
It’s important to note that these royalty payments are not the sole source of income for artists. They also earn money through live performances, merchandise sales, and other revenue streams.
Significant factors in payouts
Several factors influence the amount artists receive from streaming services. One of the main factors is the popularity of their music. Artists with a large fan base and high streaming numbers are more likely to earn significant royalties.
The length of a song also plays a role in determining payouts. Longer songs tend to generate higher royalties since they require more streaming time. Additionally, the genre of music can impact payments, as some genres have higher streaming rates than others.
Another factor to consider is the artist’s contract with their record label. In many cases, record labels negotiate deals with streaming services on behalf of their artists. The terms of these agreements can vary and may affect how much the artist ultimately receives.
It’s worth noting that streaming services continue to evolve their payment systems, and new models are being explored to ensure fair compensation for artists. The music industry is a complex ecosystem, and finding a balance between artist earnings and user affordability remains a challenge.
Apple Music Royalty Rates
Apple Music per stream rate
Apple Music pays artists and rights holders about $0.01 per stream on average based on its subscriber pool and total streams. The exact per stream rate varies based on factors like the subscriber’s country and subscription plan.
For example, a stream from a $9.99 individual subscription in the US generates more revenue than a $3 family plan stream in India. Apple does not disclose its exact per stream rate publicly.
Apple Music user base size
As of June 2022, Apple Music had over 90 million subscribers worldwide. This makes it the second most popular music streaming service behind Spotify, which has around 188 million premium subscribers globally.
With continued growth in services revenue, Apple Music’s subscriber base is projected to reach 100 million in the near future.
Notable Apple Music deals
Here are some of Apple Music’s notable direct licensing deals with artists and independent labels:
- In 2021, Apple Music announced it had signed a direct deal with BTS’ label HYBE to stream BTS’ music globally.
- Apple Music signed a direct licensing deal with Frank Ocean’s Blonded in 2016 after Ocean withheld his album from other streaming services.
- The streaming service has direct deals with many major independent labels like Sub Pop and Matador Records.
These direct artist deals give Apple more flexibility in promting music exclusives as a strategy to drive growth. However, the majority of streams still go through major label deals.
Spotify Royalty Rates
When it comes to comparing the royalty rates between Apple Music and Spotify, it is important to understand how Spotify calculates its payments to artists. Spotify pays artists based on the number of streams their songs receive.
This per stream rate can vary depending on factors such as the artist’s popularity and the country in which the stream occurs.
Spotify per stream rate
The exact per stream rate that Spotify pays artists is not publicly disclosed, but it is estimated to be around $0.00318 per stream. This means that for every 1,000 streams, an artist would earn approximately $3.18.
While this may seem like a small amount, it can add up for artists with a large and dedicated fan base.
Spotify monthly active user count
One reason why Spotify has become such a popular platform for artists is its large user base. As of January 2021, Spotify reported having over 345 million monthly active users worldwide. This massive user count provides artists with a greater potential audience and more opportunities for their music to be discovered and streamed.
Notable Spotify deals
Spotify has also made significant deals with major record labels and artists to further support the music industry. For example, Spotify signed a multi-year licensing deal with Universal Music Group, one of the largest record labels in the world.
This deal ensures that artists under Universal Music Group will continue to have their music available on Spotify.
Additionally, Spotify has partnered with popular artists such as Taylor Swift and Joe Rogan to create exclusive content for the platform. These exclusive deals not only provide unique listening experiences for Spotify users but also offer additional revenue opportunities for the artists involved.
It is worth noting that the royalty rates and deals mentioned here are subject to change and may vary depending on the specific agreements between Spotify and the artists or record labels. Therefore, it is always important for artists to carefully consider their options and negotiate fair deals that align with their goals and interests.
For more information on Spotify’s royalty rates and licensing deals, you can visit the official Spotify for Artists website, which provides detailed insights and resources for musicians and creators.
Apple Music vs Spotify Payout Comparison
Per Stream Rates
When comparing the per stream rates offered by Apple Music and Spotify, it’s important to note that both platforms calculate their payouts differently. According to recent data, Spotify pays artists an average of $0.00318 per stream, while Apple Music pays slightly higher at around $0.00735 per stream.
Although the difference may seem significant, it’s important to consider the overall impact on an artist’s earnings.
User Base Size Impact
While Apple Music pays more per stream, Spotify’s larger user base can potentially compensate for the lower rate. With over 345 million active users, Spotify has a significantly larger audience compared to Apple Music’s 60 million subscribers.
This means that even with a lower per stream rate, artists on Spotify have the opportunity to reach a much wider audience and potentially earn more in total payouts.
Total Estimated Payouts
When looking at the total estimated payouts, it’s difficult to make a definitive comparison between Apple Music and Spotify. The total amount earned by an artist depends on various factors such as their popularity, number of streams, and overall engagement from users.
However, it’s worth mentioning that Spotify reported paying out over $5 billion to rights holders in 2020 alone, whereas Apple Music has not disclosed their exact payout figures publicly.
It’s important for artists to consider their target audience and goals when choosing between Apple Music and Spotify. While Apple Music may offer a higher per stream rate, Spotify’s larger user base and potential for greater exposure can also be beneficial.
Ultimately, it’s recommended for artists to explore both platforms and utilize their unique features to maximize their earnings and reach a wider audience.
Other Factors Impacting Music Streaming Payouts
While the debate over which streaming service pays artists more continues, it’s important to consider other factors that can impact music streaming payouts. These factors include:
Artist popularity on service
One crucial factor that affects the amount of money artists earn from streaming is their popularity on the platform. Artists with a large and dedicated fanbase are likely to generate more streams, resulting in higher payouts.
Streaming platforms like Apple Music and Spotify use complex algorithms to determine how much an artist earns based on their popularity and the number of streams they receive. Therefore, it is essential for artists to consistently engage with their audience and promote their music to increase their popularity on these platforms.
Premium vs ad-supported streams
The type of stream also affects the amount of money artists receive. Premium streams, which are paid subscription streams, generally contribute more revenue to artists compared to ad-supported streams, which are available for free but contain advertisements.
As a result, artists may earn more from a listener who is subscribed to a premium streaming service like Apple Music rather than someone who listens to their music on a free ad-supported platform. It’s important for artists to consider the different revenue models of each streaming platform when evaluating potential earnings.
Individual artist deals
Another factor that can impact music streaming payouts is the individual deals that artists negotiate with the streaming services. These deals can vary depending on the artist’s popularity, bargaining power, and the streaming platform’s willingness to invest in certain artists.
Some artists may have more favorable deals with Apple Music or Spotify, which could result in higher payouts. It’s worth noting that these individual deals are often kept confidential, making it challenging to compare payouts between artists or even across different streaming platforms.
It’s crucial for artists to understand that the streaming landscape is constantly evolving, and the factors influencing payouts can change over time. While Apple Music and Spotify are leading the streaming industry, other platforms like Tidal, Amazon Music, and YouTube Music also play a significant role in determining artists’ earnings.
Therefore, it’s essential for artists to diversify their presence across multiple platforms and explore various revenue streams to maximize their earnings in the digital music era.
Conclusion
While Apple Music pays slightly higher per stream rates, Spotify’s much larger user base means most artists currently earn more total royalties there. However, Apple’s rates set an important precedent that may pressure Spotify to increase rates over time.
For unsigned artists deciding where to upload music, utilizing both streaming platforms is ideal to maximize reach and royalties.
