Apple Music has claimed to pay artists more per stream compared to Spotify’s payment plan. The amount they said they pay to artists is almost double than what Spotify has been paying. Although both the platforms have a set of variables determining the payable amount in general, Apple Music has termed it a ‘penny per stream’.
Spotify has a shady payment method that most fail to understand. However, their payment has been termed to be somewhere around half a penny in general. Moreover, the more used music streaming platform hates talking about its payment calculations, where in contrast, Apple Music has made a smart move to determine it at a per-stream rate. Last month, Spotify literally unveiled a connecting application, “Loud and Clear,” for its artists to understand the payment plans better. The newly released application focuses on why per-stream rates are not as effective as their offered “complex” payment plan to say.
In the streaming era, fans do not pay per song, and services do not pay per stream, so we don’t believe a “per stream rate” is a meaningful number to analyze. Still, we understand that artists find it useful to calculate an effective “per stream” rate or, in other words, a revenue-to-streams ratio — dividing the total size of the royalty pool on Spotify (the numerator) by the total number of music streams on Spotify (the denominator). Both of these numbers are growing incredibly quickly every year. Several factors contribute to that ratio looking small, which we understand can seem problematic.
For your better understanding, Spotify’s payment is complex as it provides paid and unpaid services to its users. Hence, both tiers differ in paying the artists. As far as its unpaid subscriptions are concerned, they are backed by ads, whereas its paying customers enjoy an ad-free music experience, and artists are paid a cut from what Spotify gains from its paying customers.
On the other hand, Apple Music only offers paid subscriptions to its users, which trickles down, reflecting its simple and straightforward penny per-stream rate, which Spotify seemingly hates.
Despite the different payment plans to the artists, both the music applications also vary greatly on the total number of users. Spotify enjoys tons of more users than on Apple’s music platform. The more confusion causing music platform for the artists’ tops with 345 million users, of which 155 million are from the paying tier. This more use is why more of the artists still prefer using and posting their work on Spotify.
In contrast, Apple Music’s total paying subscribers count to stand roughly at 72 million users. It doubles the Spotify payment but stands at half if talking about the total paid users.
The battle between the music platforms goes on. However, artists rely more on selling NFT’s and hoping that the live and concert music hits back in full swing once this pandemic thing is over to get paid as much as they desire.
