Streaming Services Open Up About Artist Payouts

Apple Music told artists it pays a penny per stream, according to a letter viewed by The Wall Street Journal.

WSJ reports the disclosure, made in a letter to artists delivered Friday via the service’s artist dashboard and sent to labels and publishers, reflects music-streaming services’ increasing efforts to show they are artist-friendly. Apple Inc.’s AAPL -0.25% move can be seen as a riposte to Spotify Technology SA, which last month shared some details of how it pays the music industry for streams on its platform.

Apple’s penny-per-stream payment structure—which music-industry experts say can dip lower—is roughly double what Spotify, the world’s largest music-streaming service, pays music-rights holders per stream. Spotify pays an average of about one-third to one-half penny per stream, though its larger user base generates many more streams. Apple’s payments come out of monthly subscription revenue from users.

Artists, managers and lawyers, still reeling from the loss of touring revenue during the pandemic, have been calling for higher payouts from music streaming, which has grown rapidly in the past year. Many fans have joined the push to raise artists’ compensation.

The Union of Musicians and Allied Workers weighed in on Apple’s letter Friday, saying that all music streamers should pay one penny per stream at a minimum and encouraged Apple to make its penny-per-stream payment not merely from a portion of its subscription revenue.

Apple last reported more than 60 million Music subscribers in June 2019. Spotify leads the industry in subscriptions with 155 million, out of 345 million total active users including those who listen free to the ad-supported tier. Amazon.com Inc. said early last year that its music subscription offerings had 55 million subscribers.