Streaming Royalties Are About To Change...Again.

Whether it be listening to your favorite band, a new artist, or even #dirtycomputer you’re probably going to listen on a music streaming platform. With 2018 coming to a close we see more people enjoying the new way to listen to music as a standard. But are the streaming services here to stay? The change from selling music via CD’s and pay per download may be the way of the past, but as streaming royalties continue to plummet, artists are becoming worried.

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In the streaming music industry, Spotify and Apple Music are in the lead, owning 80% of the US market combined. They tied this year for paid users on their apps. Behind them, is the growing Amazon Prime Music service, which is expanding rapidly offering users 3 months of unlimited streaming for $0.99. Other services that take up less than 20% of the market like Groove music are gone, as well as Rhapsody (now known as Napster). It’s sad to say, but each service has its own trend. When online radio became a thing, Pandora was at the top, but now in 2018 Spotify and Apple Music have taken that market. Pandora, the once major online radio service is now selling to Sirius XM for $3.5 Billion. When online radio came out, Pandora was downloaded by users all around the world, but as the dawn of pay per download closed, streaming became the king. With their app still credible on the market, it would make sense to sell to the satellite radio company. Other apps like Tidal and Deezer aren’t even in the 10 percentile. International music services, like Spotify and Tencent Music dominate the world. They have the largest fan base per country. Even though compared to Apple Music, Spotify has less countries where their app is available, more people use Spotify. While these two fight to be the top streaming services, Tencent seems to be growing exponentially. So if you’re looking to invest, now is the time.

For musicians, these platforms are where they can make money. Every time a listener plays a song from that artist, it equals 1 stream. Each play counts towards a royalty, where the monetary value is determined by the service. Spotify, for example, roughly offers $0.0024 USD per stream if its a free listener account, and $0.0052 USD for premium listeners. Back when listeners paid for music the artist would get their cut of $0.99 per song (percentage from label, after expenses or after payment to producer, manager etc.) which is still more than what they get now. So what does that mean actually? Let’s say you get 100 streams for a song, and all the listeners were premium customers. The artist would earn roughly $0.52 from all those listens. In order to even cover one album sale (roughly $10 back in 2005) an artist would have to see at least a total of 1,923 streams just to reach this amount.

Streaming rates vary by service, which is great if you have the same following on each app. When Groove Music was around, the rate was reported at $0.02730 per play. This was great compared to the other services when it was around. How about Tidal? $0.0110 per play. But even with that higher mark than Spotify, they only have less than 2% of the market share when it comes to users on their app. Compared to Apple Music or Spotify, this isn’t a lot of listens. So if you’re a musician trying to distribute your music online, check out the rates you’re supposed to earn per stream. It does vary with every platform.

Which service do you listen to music on/distribute your music on? Leave a comment below!

Louis EltonComment