In a letter to artists, Apple Music stated that it pays one cent per stream to singers, musicians, record labels, or other rights holders. The compensation rate is higher than other music streaming services are currently paying to artists like Spotify.
As streaming numbers are huge on popular music streaming services like Apple Music and Spotify, therefore, artists were happy with being paid a fraction of a cent even. However, the COVID-19 pandemic restrictions of large gatherings affected the music industry revenue earned by tours and concerts. Thus, artists began to demand higher compensation, especially the smaller music labels and artists. To keep the music economy running, Apple created a $50 million fund for small music producers as future royalties, so that artists are paid and the industry stays operational. The Apple Music Team wrote, “these are difficult times for the music industry globally. Livelihoods are at risk, with multiple sources of income that our industry relies on vanishing overnight. Apple has a deep, decades-long history with music, and we are proud to be in close partnership with the best labels and artists in the world. We want to help.”
Apple Music pays artists more than Spotify despite having fewer subscribers
As per the letter obtained by Wall Street Journal, the concerned stakeholders were notified of the commission rate via the artist dashboard on Apple Music, and labels and publishers were sent a letter. As the paid 1 cent per stream amount is higher than rival service, Spotify, therefore, the move will improve Apple’s image as an artist-friendly company.
Apple’s penny-per-stream payment structure—which music-industry experts say can dip lower—is roughly double what Spotify, the world’s largest music-streaming service, pays music-rights holders per stream. Spotify pays an average of about one-third to one-half penny per stream, though its larger user base generates many more streams. Apple’s payments come out of monthly subscription revenue from users.
Artists, managers and lawyers, still reeling from the loss of touring revenue during the pandemic, have been calling for higher payouts from music streaming, which has grown rapidly in the past year. Many fans have joined the push to raise artists’ compensation.
Apple last reported more than 60 million Music subscribers in June 2019. Spotify leads the industry in subscriptions with 155 million, out of 345 million total active users including those who listen for free to the ad-supported tier. Amazon said early last year that its music subscription offerings had 55 million subscribers.
In a podcast in March, Spotify boosted its service as a barrier against music piracy, and in re-writing digital music streaming’s history, the Swedish music streaming service completely ignored iTunes’ role in making musing a commodity. Maybe, Apple is hitting back at its rival now.