Artists who make their music available through Apple Music are paid an average royalty rate of $0.01 per stream, the company has surprisingly revealed. That’s a penny per play.
In a letter sent to artists, labels and publishers, Apple has divulged the nature of the payment for the first time. Some observers have pointed out that the one-cent-per-play rate is approximately double what Spotify pays per stream.
While the size of the payments mean only larger artists are likely to benefit substantially from having their library house on Apple Music, those smaller acts can at least take solace from all artists receiving the same rate.
There’s also a barb aimed at rival service Spotify, claiming that Apple Music believes “that creators should never have to pay” for their music to be promoted within the app. That appears to be a reference to Spotify offering artists lower royalty rates in exchange for better positioning last year.
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In the ‘newsletter’ sent out today, Apple also said 52% of all revenue it receives from subscriptions goes to record labels. It says the number of artists earning over 120% in the last four years, while the number of artists earning over $50,000 a year (hardly enough to sustain a band) has more than doubled. Apple also points out five million recording artists were paid out last year.
Here’s the note, first seen by the Wall Street Journal, in full:
Apple Music Insights: Royalties
This update, which is part of a new series of newsletters, looks at how creators earn royalties from Apple Music and how these have grown over time.
We believe in the value of music and paying creators fairly for their work. Since we launched the iTunes Store in 2003, we have helped millions of artists and songwriters make a living from music. As the discussion about streaming royalties continues, we believe it is important to share our values. 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.
While other services pay some independent labels a substantially lower rate than they pay major labels, we pay the same headline rate to all labels. This means artists can distribute music however they like, knowing Apple Music will pay the same rate. Sign with a label or stay independent; we believe in the value of all music.
We pay the same headline rate for all compositions.
Without songwriters, there wouldn’t be recordings. That is why we have paid every publisher and licensor the same headline rate within each country. It’s also why we have invested millions to optimize publishing operations to ensure songwriters are paid as quickly as possible.
While royalties from streaming services are calculated on a stream share basis, a play still has a value. This value varies by subscription plan and country but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.
We do not pay a lower royalty rate in exchange for featuring
Apple Music’s team of global tastemakers hand-curate 30,000 editorial playlists. These tastemakers select music based on merit and we do not ask anyone to accept a lower royalty rate in exchange for featuring. The same is true for Apple Music’s personalized playlists and algorithmic recommendations.
As a result of our commitment to these values, Apple Music paid out royalties for more than 5 million recording artists around the world in 2020, over 1 million more than in 2019. The number of recording artists whose catalogs generated recording and publishing royalties over $1 million per year increased over 120% since 2017, while the number of recording artists whose catalogs generated over $50,000 per year has more than doubled.
Like others, we have looked at alternative royalty models. Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists. Per play rates would cease to be the same for every play of a song. But more importantly, the changes would not increase what all creators earn from streaming. Instead, these changes would shift royalties towards a small number of labels while providing less transparency to creators everywhere.
At Apple Music, our focus remains on artists and songwriters and finding new and innovative ways for all creators to make a living from music. With Apple Music, music fans around the world enjoy an uninterrupted ad-free experience while knowing their data is kept private and used only to enhance the overall music experience for them.