THE FACTS BEHIND STREAMING AND ROYALTY RATES

Bottom line, it pays to be able to monetize music in some way or another.

Today, the majority of a artist income is made from paid performances, selling merchandise, and earning streaming royalties. In 2022, most people listen to their music through a handful of online audio streaming platforms.

SO HOW MUCH $$$ SHOULD I BE MAKING FOR MY STREAMS?

To answer this question and more, I’ve compiled this article, which contains everything you need to know about music streaming royalties and payouts in 2022.

The latest music streaming royalty rates are as follows:

Consider this! If your next hit song reaches 10,000 plays on Spotify, you will receive roughly $40 in streaming royalties. Although this number is fairly accurate, calculating the exact payout from various platforms can be very difficult. This is largely because:

Rates are rarely paid at a flat rate per stream Agreements and figures change often Different tiers and subscriptions impact pay rate. Streams are more valuable in different parts of the world.


WHAT ARE THE MOST POPULAR STREAMING SERVICES IN 2022?

In 2022, the following were the most popular streaming services for listening to music, comedy, and podcasts all around the world:

  • Amazon Music
  • Spotify
  • Apple Music
  • Pandora
  • Tidal
  • Deezer
  • YouTube Music
  • Soundcloud
  • Sirius XM
  • iHeartRadio

According to Statista.com, Spotify was the most popular streaming platform with accounting for 32% of streaming service users. Apple Music came second with 16% of the market share.

The same report noted that Amazon brings in an impressive 13% of users, while Google follows with 8%. What is notable here is that SoundCloud is one of the fastest-growing platforms, doubling the number of monthly users from previous years.

Whereas Apple, Spotify, Pandora and SoundCloud are used exclusively for audio streaming, YouTube (and YouTube Premium) is extremely popular for streaming music videos, songs, podcasts, and more. Amazingly, YouTube can draw as many as 2 billion monthly users listening to music, watching TV, or going down rabbit holes watching video after video on obscure subjects.

ROYALTY PAYOUTS PER PLATFORM IN 2022

For a little bit more information about today’s streaming landscape, we will now go into detail about the ins and outs of each of these streaming platforms.

AMAZON MUSIC

Lastly, Amazon Music is digital music streaming service that comes from a corporation that has dipped its toes in just about every industry. Amazon Music is slowly gaining subscribers, as the company boasts 55 million worldwide monthly users in 2020. 

To make things confusing, Amazon music offers 5 different tiers of listening options. This includes an unlimited version, a high definition audio version, as well as individual and family plans. Amazon Prime members are also entitled to a premium version of Amazon Music.

HOW MUCH DOES AMAZON MUSIC PAY PER STREAM?

On average, Amazon Music shells out roughly $0.00402 per stream on the platform to the owners of the recording. At nearly one full cent, this is among the highest royalty payments for music streaming services globally.

SPOTIFY

From the other side of the world, Sweden’s Spotify is another industry giant in the music streaming space. Spotify offers both a free and paid service which can be used to listen to music on desktop and mobile devices. The free version contains ads between groups of songs, whereas Spotify Premium is completely ad-free.

HOW MUCH DOES SPOTIFY PAY PER STREAM?

Historically, Spotify has accounted for some of the lowest royalties paid in the industry. In fact, on multiple occasions, artists have banned together claiming that platforms like Spotify are not paying nearly enough. Wanting to stay in business, the streaming service has modernized to raise performance royalties for musicians and comedians.

Today, Spotify pays between $0.003 and $0.005 per stream based on the listener’s location, song popularity, song length, and a few other factors. In many ways, the ever-changing rate of pay seems as if it was almost designed entirely to confuse users who are possibly being underpaid for their royalty rates.

Like Apple, Spotify also shares a percentage of its ad revenue with its most popular streaming artists. The platform has also made headlines recently for paying independent producers like Joe Rogan large sums of money in exchange for exclusive streaming rights.

APPLE MUSIC

Ah — the company that revolutionized the way we listen to music with the invention of the iPod: Apple Music. Today, most Apple Music users stream their favorite tunes from the Apple Music App on iPhones, iPads and MacBook computers.

Users can begin with Apple Music by utilizing a 3-month free trial. After that, the service costs $10 per month for individual users, $5 per month for students, and $15 per month for families of up to six people.

Interestingly in 2021 Apple released a ‘voice only’ version of Apple Music for $5 a month which is only compatible with Siri, meaning you need to control it with your voice via an Apple device.

For more information on the different tiers, visit Apple Music’s official website

HOW MUCH DOES APPLE MUSIC PAY PER STREAM?

Although the number is constantly fluctuating, in 2022, Apple Music pays 0.00783 per stream on its platform. With this in mind, a song will earn $1 after streaming roughly 128 times.

Beyond this, Apple Music also has a pro-rata system that distributes a large percentage of its advertising revenue to streaming artists. However, this bonus payment is usually pennies on the dollar for most artists, as income is divided among all of the musicians on the platform. Significant amounts of money are only going to be made through ads from artists like Drake and Taylor Swift who’s songs are streamed millions of times each month.

For every dollar earned on Apple Music, artists earn an average of 58 cents. The remaining balance is split between Apple’s commission (28.5 cents), and production, mechanicals, and performance rights (13.5 cents).

PANDORA

For many years, Pandora was a name that was fairly synonymous with internet radio. The platform lets users customize their own virtual radio stations based on songs, artists, genres, and more.

Pandora is completely free to use, however ad-free streaming and on-demand music libraries can be accessed for $4.99 and $9.99 per month respectively. Pandora can be used in both a browser or app.

HOW MUCH DOES PANDORA PAY PER STREAM?

Although it is the sixth-largest music streaming platform, Pandora falls far behind other streaming services when it comes to paying artists. In 2022, musicians earn only 0.00133 per stream on Pandora. Compared to services like Spotify and Apple Music, Pandora pay less than half as much as some of its competitors.

At this rate, songs on Pandora must receive roughly 752 streams to earn one dollar on the platform. Compared to other industry leaders, this is one of the lowest royalty rates.

TIDAL

Next, let’s take a look at Tidal, a specialized service for high-quality rap, hip-hop, and R&B. Founded by Jay-Z and backed by many independent musicians, Tidal is one of the newest music streaming services, which is offered at a few different paid tiers.

Currently, Tidal offers a one month free trial with $10/month fees for basic service and $20/month fees for high quality streaming audio.

HOW MUCH DOES TIDAL PAY PER STREAM?

As an artist-centric streaming service, Tidal has one of the highest royalty payment rates in the music industry. Paying nearly 3 times as much as other high volume music streaming services, Tidal pays roughly $0.01284 per stream.

It’s worth noting that Tidal has also had its fair share of controversies, so it may not be the most trustworthy platform for artists seeking streaming services pay.

YOUTUBE MUSIC

Speaking of YouTube, the Google-owned company is now pushing for people to enjoy streaming music on the YouTube Music and YouTube Premium streaming services. YouTube Music is free to use, whereas users can upgrade to Premium to enjoy an ad-free experience.

HOW MUCH DOES YOUTUBE MUSIC PAY PER STREAM?

It is a bit more difficult to calculate an average royalty payment for musicians on YouTube, because the platform also offers video and a variety of streaming possibilities. Artists reportedly make a minimum of $0.00069 per stream in Content ID instances. This includes music played on separate creator’s videos.

Beyond this, artists typically make $0.00164 on streams from their own channels and $0.002 per stream on the YouTube Music platform. With this in mind, many artists are hopeful that listeners will tune into YouTube Music, rather than finding their content in a traditional browser.

HOW DO ROYALTIES WORK?

Royalties are fairly simple. Although there are many types of royalties (mineral rights, television appearances, etc.), the music industry pays recording artists small amounts of money per stream for a sound recording. Streaming services pay artists based on the number of times a sound recording is played after taking a small fee for hosting it on the platform.

In most cases, a record label or music publisher will take a fixed percentage of a musicians royalties on top of the income taken from the music streaming service.

WHAT CONSTITUTES A “STREAM” IN MUSIC?

Streaming is one of the most popular ways to listen to music today. A stream is completed when a song is played through an online platform, rather than on an individual listening device.

Streaming has grown in popularity as it does not require users to download the media they want to enjoy, which saves storage space on computers and mobile devices. Streaming is also popular in video services like YouTube and Netflix.

HOW DO STREAMING PLATFORMS PAY ARTISTS?

Streaming platforms pay artists royalties for songs that are streamed or downloaded. In most cases, the money is directly deposited into an artists bank account every month or quarter.

Although it is becoming increasingly rare, some royalties are still paid with a physical check that is mailed to artists. More often than not, low-income checks from low volume streams are more of a novelty for smaller musicians rather than a serious paycheck.

HOW DO STREAMING SERVICES MAKE MONEY?

In most cases, streaming services make money through paid subscriptions and ad revenue. In some cases, a percentage of the ad revenue made while a musician’s work is streaming is then given to the recording artist.

HOW MUCH DOES SPOTIFY PAY PER STREAM?

Like we mentioned above, Spotify pays anywhere between $0.003 and $0.004 per stream in musician royalties. This number is constantly changing and is determined by a large number of factors that are influenced both by the song and the listener.

WHAT IS AN ALBUM EQUIVALENT UNIT?

Before streaming services, album sales were used to measure the popularity of a musician’s work. In the 2010s, the Album Equivalent Unit was introduced to help quantify the success of a music release.

To put it simply, 1 album sale is equivalent to 10 song downloads or 1500 streams according to the Recording Industry Association of America. With this in mind, it is easier to monitor an artists work if they reach a “platinum” or “gold” level of equivalent albums sold.

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