Wondering How Much Streaming Services Pay Labels? Here’s One’s Take

Posted by on June 6, 2012

So it’s pretty widely known by now that when you sell a single on iTunes, the label winds up with about 70% of the 99 cent or $1.29 price, while Apple gets the remainder. Of course by the time the label and producer take their cut, the artist gets about $0.084 cents. It’s also pretty widely known that streaming services are being touted as the wave of the future, as they actually do pay artists, even if they’re listening to the music and not buying it. But while streaming services are better from an artist and label standpoint than pirating music, labels aren’t exactly raking it in, either.

Digital Music News points to a month-old post on a blog called The Trichordist in which an unnamed independent label disclosed their finances from July 2011-December 2011, and it looks pretty bleak. This is from the label’s perspective, so with the iTunes ratio, know that the label is assuming an approximate 70% payout. These figures are from a catalog of 87 albums consisting of 1,280 songs, and is before the distributer’s fee.

 

Zune
15,159 plays

$437.58

$0.028  per song

25:1 Itunes Song Download

 

Napster
30,238 plays

$479.07

$0.016 per song

43:1 Itunes Song Download

 

Rhapsody
50,822 plays

$668.57

$0.013 per song

53:1 Itunes Song Download

 

Spotify
798,783 plays

$4,277.39

$0.005 per song

140:1 Itunes Song Download


A $5862.61 payout for six months of streaming 78 albums? That’s pretty paltry. That being said, there are a few things that are a little biased about this story. First of all, it’s understandable why a label might want to remain anonymous, but “a source” makes this impossible to quantify, even though the math seems to add up. Spotify looks like the bad guy because they’re paying the lowest. However, it’s mostly a free service, unlike some of the others. And the artists are also getting by far the most amount of spins through Spotify, as it’s the most popular service. If any of those almost 800,000 spins led to someone purchasing the music, that’s a win.

And on that subject, comparing streams to someone actively purchasing your music is apples and oranges (pun somewhat intended). But it certainly wouldn’t hurt if labels and artists could negotiate with the streaming services to get a higher royalty rate. And it shows that while some income is better than none, nobody’s getting rich from streaming music yet.

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Categorised in: Digital Media

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