With online streaming stores such as Spotify, Apple Music, and Tidal replacing the traditional brick and mortar record stores, it is important for artists to know how they work and how to utilize them effectively. A key statistic that all artists should be aware of is how much streaming stores pay artists per monetized play. We ranked the Top 3 and some notable mentions in these areas and the results may surprise you.
As the chart above implies, Xbox Music seems to take the top spot in pay per play for artists, coming in with an average payout of $0.02730. It is important to note that Microsoft, the creators of Xbox Music, “abruptly announced late last year that it would exit the streaming music market” according to Daniel Sanchez from Digital Music News, and recent articles have stated that this change actually happened on December 31st, 2017. Xbox Music is still important to mention because of how much more they used to offer artists. We can only guess as to the reasons why, but a plausible explanation could be that a lower overall market share (i.e. number of users) caused by the cost to use the platform, results in a higher payout per play for artists. Xbox Music had the lowest market share at 0.1% overall but had one of the highest proportions of paid users.
A more recent chart (one that has taken into account the official end of Xbox Music) has Napster, formerly Rhapsody, in the top spot, paying artists a whopping (read sarcastically) $0.0190 on average per play. Still not bad when comparing to previous number 1, Xbox Music. Napster is the only streaming store that approaches a full 2 cents per play, according to InformationIsBeautiful.net. When looking at the chart from Statista again, we see the top payer only has a small amount of the overall music streaming market share (0.3% at roughly 5 million users, all paid users). As stated above, a possible reason for the higher payouts could be due the cost to use the platform. AFRP plans to bring you a Napster stream team soon to capitalize on the highest paying streaming store in 2018. While Napster is a paid platform, the creation of the AFRP Napster Stream Team will allow artists to recoup that cost, and profit from higher paying royalty streams.
Taking the runner-up spot is Tidal, paying out $0.0125 per play to artists on average. Despite the recent legal scandals plaguing the company and its owners, Tidal still provides one of the top paying services for artists. It is important to note the market share of Tidal is higher than that of Napster, 0.5% vs. 0.3%, so getting plays may be easier on Tidal than Napster. What’s surprising about Tidal is that it has one of the lowest paid user bases, yet continues to pay artists at a higher rate than 6 other streaming platforms. AFRP has a Tidal stream team in the works, creating an easy way for artists to generate royalties from the second highest paying platform.
The final podium member, coming in 3rd place, is Apple Music, paying less than 1 cent per play on average ($0.0074). The chart from Statista notes a large jump in market share percentage between the second and third place stores, from 0.5% to 10.5%, with 100% paid users. That large jump in overall market share may be proportional to the drop in the average pay per stream. We can’t know for sure without seeing the data, but the second chart does show Apple Music having almost a 1:1 ratio of pay per play to overall number of paid users. Despite 100% of users being paid users, Apple Music provides a significantly lower pay per stream rate than the top 2 streaming stores, Napster and Tidal. AFRP has already launched the AFRP Apple Music Stream Team to provide artists an easy way to recoup the cost of an Apple Music membership and make profits on their distributed tracks.
6th place – Spotify
Falling well outside of the top 3 is Spotify, the world’s largest music streaming store with 47.5% of the music streaming market share or 159 million users (55% of which are free users). Spotify pays artists less than half a cent per play ($0.0044) on average. We see again as the number of users and market share increase, the pay per play rate drops. We here at AFRP would like to see better payouts from Spotify. As the most popular music streaming service, they have a huge opportunity to help artists, which should be an important goal that I’d like to see them focus more on.
8th place – Pandora
Pandora’s pay per stream rate is barely worth the mention, but given its large market share (21.6%) and third largest user base (81 million) we had to include it. Paying artist a lousy $0.0013 per play on average, Pandora is truly one of the least worth it streaming stores from a royalty revenue perspective. However, because it has such a large share of the market, plays may be easier to come by. Hopefully the juice is worth the squeeze.
Overall, independent artists today should understand the details of streaming music in the digital age. Though it can be complicated to navigate at times, knowing the basics can help tremendously when making key decisions about your music career.
For more information about music marketing and promotion, check out the rest of The Promo Post blog! AFRP – Are You #REPOSTWORTHY?