On Friday morning, Apple Music revealed a long-coveted detail to the music business: Its average per-play rate is one cent per stream.
The music-streaming company made the announcement in a memo it sent to artists, labels, and other music rights-holders as part of a new series of newsletters. “As the discussion about streaming royalties continues, we believe it is important to share our values,” Apple Music wrote in the memo, which Rolling Stone has obtained and reviewed. (The memo was first reported by the Wall Street Journal.)
“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,” Apple Music continued. That statement likely has some teeth, given that Spotify — Apple Music’s biggest competitor — has never revealed its per-play figure. Spotify did, however, launch a website for creators last month to provide some clarity on the matter, but failed to provide specific numbers such as average per-stream rates.
Of course, it’s important to remember that Apple’s $0.01-per-stream is an average. When a fan presses play on a song, a penny doesn’t immediately go into the artist’s pocket. The major streaming platforms run on a pro rata model, meaning that royalties are based on Apple Music’s total streaming earnings that are then divvied up. For example, at the end of an undisclosed period of time, the company pays the same 52% headline rate to all labels, it also revealed in the memo.
“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,” Apple Music wrote. “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.”
As for songwriters, the memo revealed that it pays “every publisher and licensor the same headline rate within each country,” although a specific percentage was not shared. That may be due to an ongoing legal battle amongst publishers, who have been fighting for an increase piece of the overall streaming pie for some time now. (The thought being: Why disclose something that might change in the near future?) Apple Music instead took the opportunity to remind recipients that is has already “invested millions to optimize publishing operations to ensure songwriters are paid as quickly as possible.”
The streaming service also pointed out that it refuses to “pay a lower royalty rate in exchange for featuring” — which is something Spotify started doing last year. In November, the Swedish competitor announced that it could be incentivized to include songs on new personalized Discover playlists, by giving rights-holders the option to take a lower percentage for the chance at more exposure.
“Apple Music’s team of global tastemakers hand-curate 30,000 editorial playlists,” Apple Music wrote. “These tastemakers select music based on merit.”
But many onlookers have questioned the pro rata model, as a whole, over the years. Addressing the elephant in the room, Apple Music noted in its memo that it has “looked into alternative royalty models,” though it did not make any definitive statements. “Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists,” the company said. “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.”
And lastly, there’s that — heavy sigh — ever-popular “making a living” phrase again: “At Apple Music, our focus remains on artists and songwriters and finding new and innovative ways for all creators to make a living from music.”
From Rolling Stone US