Close-Up

Creative Close-Up: From Digital Music News…..

July 29 / 17

Hey everybody…it’s time for a Creative Close-Up. I found a recent article about music streaming, courtesy of Digital Music News. This has been updated to show you how much the artists are making. Read it and see for yourself.


Digital Music News

What Streaming Music Services Pay (Updated for 2017)

Image source by Information is Beautiful

So, how much can you expect to get from Spotify, Apple Music, and other streaming platforms?

Music streaming services have helped to spark a revival in the music industry.  This year alone, major labels have reported record-breaking revenue.

But how much are artists actually earning?

We’ve been compiling data on this for a few years.  But getting a comprehensive, overarching look is pretty difficult.  Now, Information is Beautiful has released a new infograph showing how much major streaming services actually pay.  It reflects their best efforts to amass per-stream data into one diagram.

Calculate Your Earnings from Spotify, Apple Music, Pandora, Amazon, Google Play & More

Two years ago, the team at Information is Beautiful did the same analysis.  They analyzed what it would take for an artist to receive a monthly wage minimum of $1,260. For example, Google Play Music paid out $0.0073 per play; so artists would need 172,206 plays to earn the $1,260.

TIDAL, which paid out $0.007 per play, would require a similar amount.

Artists on YouTube have traditionally received lowest amount.  In 2015, the video platform paid $0.0003 per play.  To earn the minimum wage amount, musicians would need 4.2 million plays on the platform.

Now, Information is Beautiful has updated their list for 2017.

This year, they compared eight major music streaming services: Napster, YouTube, Pandora, Apple Music, TIDAL, Google Play, Deezer, and Spotify.  The team tracked the following information:

  • Artist revenue per play.
  • Total users (millions) per platform.
  • Percentage of free users on the platform.
  • Plays needed to earn minimum monthly wage ($1,472).
  • Total annual loss reported by the streaming platform.
  • Annual loss per user.

It’s worth noting that this report doesn’t apply to signed artists, as they receive an unreported cut based on their contracts.

And the king of streaming payouts is… Napster?

Napster topped this year’s list with the highest artist revenue paid out per play.  For a single stream, Napster paid out $0.0167.  Compared to its competitors, however, the platform has the second-lowest amount of total users: 5 million.  So it can be difficult to scale that per-play number, but great if you assemble a core Napster following.

To earn minimum wage, an artist would need 90,000 plays on the platform.

But why does Napster have higher payouts?  The answer may be that the service doesn’t have a free tier.  In 2015, a Napster spokesperson told TechRadar that a freemium business model simply “isn’t sustainable.”

The company has reported losses, however.  Yet, its losses only amounted to $35 million, the third-lowest on the list.  With five million users on its platform, on average, each user costs Napster $7.78.

Second place in payouts: TIDAL

Despite Jay Z’s massive star power, users have yet to flock to the high-fidelity streaming service.  The company last reported around 4 million users, though it may have inflated its total subscription numbers. The Jay Z-owned streamer pays out $0.0110 per stream.  An artist on the platform would need 130,000 plays to earn the monthly minimum wage amount.

Based on Information is Beautiful’s calculations, only 28% of users on the platform pay for a subscription.  TIDAL last reported an annual loss of $28 million, the second lowest on the list.  Each user costs the company about $6.67.

Third place: Apple Music

In just two years, over 27 million people have subscribed to Apple Music.  It took Spotify nearly a decade to reach 50 million.  While Apple remains secretive about its losses, unsigned artists on the platform can expect to receive $0.0064 per play.  For an unsigned artist to earn $1,472, they’d need 230,000 plays.  Apple didn’t share how much each user costs the company.

The former payout king falls to fourth place

In 2015, unsigned artists on Google Play Music would earn $0.0179 per play.  That number has since decreased to $0.0059.

Like Apple, Google won’t report on its annual music losses.  That includes how much each user costs the company.  Currently, the service has more than 5 million paid subscribers, and 5 million more on a free tier service (possibly on a trial subscription).

For an artist to earn minimum wage on the platform, they would need 250,000 plays.

Say hello to Deezer

French-based music streaming service Deezer may not have a huge presence in the United States just yet.  However, it is available in over 180 countries.  It also has more than 40 million licensed tracks.

On average, the service pays out $0.0056 per stream, slightly lower than Google Play Music.  It also has 16 million total users, 57% of whom are on a free-tier.  To earn $1,472, an artist would need 260,000 plays on the platform.

Deezer also has the lowest annual loss on the list.  Each user costs Deezer just $1.69.

Et tu, Spotify?

Ahead of their long-awaited IPO, Spotify is currently embroiled in controversy. While the service has the highest number of paid subscriptions, artists often complain about low payouts.  According to Information is Beautiful, the Swedish streamer pays out $0.0038 per stream.  That means for an artist to earn minimum wage, they would need 380,000 plays on the platform.

Two years ago, the service paid out $0.007 per stream.  Unsigned artists would need 180,000 plays to earn $1,260.

The streaming platform has recently locked down long-term licensing deals with major labels.  It also has 140 million total users.  According to Information is Beautiful, 57% use its free-tier service.  The number doesn’t add up, as Spotify last reported over 50 million users.  Roughly 90 or so million use the service.

Losses at the company continue growing, however.  Information is Beautiful calculates an annual loss of $194 million, with each user costing the company $1.39.

DMN’s investigation calculates losses over $600 million.

Struggling Pandora lands in seventh place

Without presenting a clear financial plan, Pandora’s CEO promised investors that the company would turn a profit this year.

On the infograph, Pandora landed in second-to-last place with one of the worst artist payouts.  Per stream, Pandora pays $0.0011.  It also has the second-highest amount of total users, right behind Spotify.  However, an unsigned artist would need 1.2 million plays to earn minimum wage on the platform.  Its losses also grew to $250 million. Each user costs the company $3.20.

Don’t expect to earn money once again on: YouTube

Artists, major labels, and music organizations have long called out YouTube for its paltry royalty payments.  The Google-owned company has defended itself, stating that it has paid out over $1 billion.  The numbers speak for themselves, however.

Two years ago, YouTube paid unsigned artists $0.0018 per play on its video platform.  That number has dropped to $0.0006, the lowest on the list.  The platform has one billion users.  The team at Information is Beautiful calculates that only .1% have subscribed to YouTube Red.

For an artist to earn minimum wage on the platform, they would need 2.4 million plays.  While this number remains high, two years ago, unsigned artists would earn $1,260 only after just 70,000 plays.

The Google-owned video platform reported a loss of $174 million.  With over 1 billion users, each costs YouTube just 17 cents.

Featured image by Information is Beautiful

[UPDATE] The numbers originally referenced in this piece were for signed artists, not unsigned artists.  The calculations have since been updated to reflect unsigned artists.

I hope Mr. Sanchez’s article gave you something to think about.

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