Apple Music claims it pays nearly twice as much per stream as Spotify in a letter posted Friday on the streaming service’s artist dashboard, according to the Wall Street Journal, although its math is subject to debate.
The disclosure, made in a letter to artists delivered Friday via the service’s artist dashboard and sent to labels and publishers, is seemingly a response to Spotify’s “Loud and Clear” report detailing its payment processes published last month. However, while Spotify’s information is posted publicly for all to see, Apple Music has elected to keep its data limited to artists and select industry entities. A source close to the situation tells PvNew that the information will be rolled out gradually over the course of Friday (April 16).
In the data, Apple’s penny-per-stream payment structure — which some in the music industry say is questionable — would mean that Apple pays roughly double the one-half to one-third of a penny that Spotify does, although that claims is undercut by the fact that Spotify has many millions more users globally. According to its most recent reports, Spotify has an industry-leading 155 million paying subscribers and 345 million active users, while Apple last reported more than 60 million Music subscribers in June 2019.
“As the discussion about streaming royalties continues, we believe it is important to share our values,” Apple said in the letter. “We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring” music in prime display space on its service — a dig at Spotify’s controversial “Marquee” advertising campaign rolled out last year, in which artists essentially pay for their own advertising.
It is also worth noting that streaming services rarely pay an artist directly: They pay the rights-holder, usually a record label, which takes its share and distributes the remainder to the artist and any other entitled parties. Both services pay rights-holders based on the share of total streams that their artists bring in.
Apple says in the letter that it pays 52% of its subscription revenue to record labels; Spotify says it pays two-thirds of every dollar of revenue to rights holders, with 75% to 80% of that going to labels. That breaks down to 50 to 53 cents on the dollar, depending on agreements between the service and different labels, according to the WSJ.
Reps for Apple Music and Spotify declined PvNew‘s requests for comment.
To a degree, these competing payment claims are largely a matter of dueling calculators:The comparisons aren’t really apples-to-apples, because Spotify generates significantly more revenue for the music industry than Apple Music due to its much larger user base and, thus, its much larger number of streams per month. The comparison is also complicated by the face that Spotify has a free tier that does not generate as much revenue as its paid service, although it has essentially been proven to be an effective on-ramp for the paid service.
Perhaps not coincidentally, Spotify is observing its 15th anniversary this month.
PvNew will have more on this story as it continues to develop.
