#Apple Music, in Contrast With Rival Spotify, Says It Pays a Penny-Per-Stream Average

Apple Music has issued a memo to artists, labels, and other rights-holders regarding its royalty rates and practices, in which the streaming service touts that it pays out one cent per stream on average, as The Wall Street Journal reports and Pitchfork can confirm.

“While royalties from streaming services are calculated on a stream share basis, a play still has a value,” reads the memo, viewed by Pitchfork. “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.”

Much of the memo seems to be indirectly aimed at primary competitor Spotify. At one point, Apple asserts its commitment to paying the same 52% headline rate to all labels. “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,” the memo reads. “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.”

The memo seems to refer to Spotify’s Discovery Mode, which gives artists the opportunity to opt into a promotional, lower royalty rate in exchange for a boost in personalized algorithmic playlisting.

The memo states, “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,” Later, it’s written, “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.”

It should be noted that streaming companies like Apple Music and Spotify do not pay artists directly, and instead pay out to record labels, distributors, and performing rights organizations like ASCAP and BMI, who then pay artists. Near the end, Apple also shared its findings from research into “alternative royalty models.”

“Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists,” the memo reads. “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.”

Apple’s announcement comes at a moment when artists in the music industry are demanding that streaming services shift to more equitable royalty rates. The Union of Musicians and Allied Workers (UMAW) has been campaigning for Spotify—which has a far larger user base than Apple Music, with 155 million paid subscribers compared to Apple Music’s 60 million as of June 2019—to begin paying out a penny per stream. In March, Spotify rolled out the Loud & Clear transparency initiative in the effort to open more communication with the artist community.

Read “Meet the Experimental Musicians Who Built Their Own Streaming Service” over on the Pitch.