Data crunchers Information Is Beautiful caused a stir last year when they waded through data from indie artists to determine the indeterminable - what streaming services actually pay per stream. Now, they're back with an updated and eye-opening analysis.
By Bobby Owsinski of Music 3.0
Trying to figure out exactly how much a streaming service pays per stream is a moving target, since there are so many variables involved. That said, an interesting chart from Information Is Beautiful tries to average it all out to come out up with the current royalty payouts from each. Keep in mind that this is only sound recording portion of the royalty and doesn’t include publishing (which is about 10x smaller).
From highest payout to lowest:
- Napster – $0.0167
- Tidal – $0.0110
- Apple Music – $0.0064
- Google Play – $0.0059
- Deezer – $0.0056
- Spotify – $0.0038
- Pandora – $0.0011
- YouTube – $0.0006
That means Napster is paying out a bit more than a cent and a half per stream, Apple Music about 6/10th of a cent, Spotify around 4/10th of cent, and YouTube at 6/100th of a cent. These figures aren’t as cut and dried as they seem, however. Here are some of the variables that exist that make each streaming payout unique:
1. The subscriber tier. Any service with a free tier (Spotify) pays less than a service with a paid subscriber-only tier (Apple Music). In other words, if most of your streams are from the free tier, you make less money.
2. Interactive or non-interactive. A service that plays like a radio (Pandora) pays a lot less than an interactive service (Spotify).
3. The country the plays are in. If you get a lot of plays in a country were the subscriber rate is only $3.99 per month as opposed to the U.S. where it’s $9.99 per month, the payout will be less.
4. Market share. Many services pay not on a per stream basis but on market share (Spotify). That means that the more you get played, the higher per stream you get paid.
5. The advertiser rate. On platforms that gain much of their revenue from advertising (YouTube), the type of advertiser that you attract will make a difference. For instance, high-end brands like Mercedes pay a lot more for the ads than Pizza Hut. Also, the time of year can make a difference in how much the advertiser will pay as well (Holiday season versus the summer).
6. Label deal. If you’re an indie artist, you’re seeing the entire amounts quoted above. If you’re signed to a label, you’re probably only seeing about 25%, depending upon your deal.
These are just a few of the variables involved when it comes to determining the per stream average rate, so as you can see, the rates can vary wildly.
Although the figures above are a pretty good guideline, there still might be a lot of wiggle room involved as there was no references as to how the numbers were derived.