Apple Music on iPhoneSource: iMore

What you need to know

  • The amount Apple pays music artists for streaming has been revealed.
  • Apple has told its artists it pays them at the rate of "a penny per stream".
  • That would be roughly double the amount of rival Spotify.

A new report says that a letter sent by Apple to Apple Music artists has revealed Apple pays for streams at the rate of a penny per stream.

From the Wall Street Journal:

Apple Music told artists it pays a penny per stream in a letter reviewed by The Wall Street Journal.

The disclosure, made in a letter to artists slated to be delivered Friday via the service's artist dashboard, is part of a growing effort by music-streaming services to show they are artist-friendly. For Apple Inc., it can be seen as a riposte to Spotify Technology SA, which last month shared some details of how it pays the music industry for streams on its service.

As the report notes "a penny per stream" is roughly double what Spotify pays the rights holders for music streamed on its platform. But that doesn't necessarily mean artists are getting rich from streams either, as the report explains:

Artists aren't paid directly by streaming services, so a single play of a song doesn't result in a penny going into that artist's account. Instead, streaming services pay royalties to rights holders, which include labels, publishers and other distributors, which in turn pay artists based on their recording, publishing and distribution agreements. Both Apple and Spotify pay rights holders based on the share of total streams their artists garner on each service. Yet artists cite the per-stream pay rate as an indicator of their earnings. Major labels say the average monthly streams per user is a better measure of the streaming economy, and growing numbers of streams mean more money coming in for artists. Both Spotify and Apple, they say, are at or near the 1,000 streams per listener per month benchmark that is seen as a success.

Apple says that 52% of Apple Music subscription revenue goes to record labels. Given the larger user base, Spotify still remains a much bigger source of revenue for most artists despite Apple's more favorable terms. You can read the full report here.