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The "comparing royalty payouts" talking point needs to die. Read this article to learn how $ payouts per stream are determined: https://www.hypebot.com/hypebot

The "comparing royalty payouts" talking point needs to die. Read this article to learn how $ payouts per stream are determined: https://www.hypebot.com/hypebot/2022/02/music-streaming-really-does-pay-you-just-arent-doing-the-math-right-anthony-maker.html https://www.hypebot.com/hypebot/2022/02/music-streaming-real... It's all pro-rated. 52% of Apple Music revenues go to labels, by contract; Spotify is around the same. Royalties are just revenues divided by # of streams (simplification). Spotify's free users give lower royalty rates per stream, and Premium users give higher ones. If Spotify users like rap more than AM users, then rap will have higher rates on Spotify than Apple Music, since a larger proportion of revenue will go to the same amount of rap songs. If Apple Music is more painful to use than Spotify, or has worse discoverability, then people won't listen to as many songs (or won't leave it on for 8h as background noise) as with Spotify, and royalties will be higher per stream than Spotify. The higher royalties don't make up for the lower # of streams since discoverability benefits small artists.

dev_tty01 4y ago
Are you saying the table is wrong? I don't see that in your response. If the table is right, then artists are making less money per stream on Spotify. An artist might make more in absolute terms if there are more total streams on Spotify, but the artists are still being devalued and they would do better if the rates were higher. Personally, I want to use a service that values and pays artists well. ("Well" is a relative term here...)
- concinds 4y ago
  My point is that Apple Music payouts are an identical percentage of their revenues to Spotify's; that means that any campaign to make people switch to AM will just mechanically make AM payouts decrease, and Spotify payouts increase until they converge. Right now, Apple pays more per stream either because they may have more users in richer countries (Indian users don't pay $10/month), users who listen to less music, maybe older users (fewer students on student plans) and because they have no free tier. So: the "AM has higher royalty payouts" is objectively a false Apple marketing point, because it's zero-sum. It's a pure accounting gimmick. Royalty payouts are pro-rata; there's no such thing as "Spotify's chosen royalty payout". For Spotify to get as high as Apple's, they'd need to make discoverability terrible (fewer hours listened per month = fewer streams = higher payouts per stream), get rid of their free tier, etc. They can't just "decide to increase payouts" because that's 52% of revenues, same as Apple Music, by contract.

dev_tty01 4y ago

Are you saying the table is wrong? I don't see that in your response. If the table is right, then artists are making less money per stream on Spotify. An artist might make more in absolute terms if there are more total streams on Spotify, but the artists are still being devalued and they would do better if the rates were higher. Personally, I want to use a service that values and pays artists well. ("Well" is a relative term here...)

concinds 4y ago
My point is that Apple Music payouts are an identical percentage of their revenues to Spotify's; that means that any campaign to make people switch to AM will just mechanically make AM payouts decrease, and Spotify payouts increase until they converge. Right now, Apple pays more per stream either because they may have more users in richer countries (Indian users don't pay $10/month), users who listen to less music, maybe older users (fewer students on student plans) and because they have no free tier. So: the "AM has higher royalty payouts" is objectively a false Apple marketing point, because it's zero-sum. It's a pure accounting gimmick. Royalty payouts are pro-rata; there's no such thing as "Spotify's chosen royalty payout". For Spotify to get as high as Apple's, they'd need to make discoverability terrible (fewer hours listened per month = fewer streams = higher payouts per stream), get rid of their free tier, etc. They can't just "decide to increase payouts" because that's 52% of revenues, same as Apple Music, by contract.