revealed in a letter to the artists that he pays a cent per song stream. While that doesn’t sound like a lot, it’s about double rate for payments. Apple’s rate can sometimes drop below a penny per flow, depending on the The Wall Street Journal. But it’s still much higher than Spotify’s average payment per flow between a third and a half a cent.
At last count, however, Spotify had a lot more paid members than Apple Music. Spotify had in the fourth quarter of 2020, and 345 million users in total. The last time Apple revealed its Music subscriber numbers was in June 2019, when it had over 60 million members.
Spotify users stream more music than those on other platforms. As such, the company generates more revenue for the music industry than its competitors. It paid rights holders 5 billion euros (roughly $ 6 billion) last year.
Artists generally do not receive these payments directly. Apple, Spotify, and other services pay royalties to rights holders, such as publishers, record labels, and distributors. Artists and songwriters then receive a reduction in royalties, which depends on their agreements with those rights holders.
Apple wrote in its letter that it pays 52% of music subscription revenue to record companies. About two-thirds of every dollar in revenue generated by Spotify (including users of the free and ad-supported tier) goes to rights holders, of which about 75-80% is paid to labels. Overall, streaming in the recording industry’s revenue last year, according to a report by the Recording Industry Association of America.
Artists, industry figures and many fans have demanded higher payments from streaming services, especially after the COVID-19 pandemic temporarily halted touring, a key source of revenue for performers. At the very least, greater transparency of music streaming platforms is a welcome move.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through any of these links, we may earn an affiliate commission.