Apple Music’s Open Letter To The Music Industry

Early last week, Apple Music released an open letter detailing their payment process, conjuring a maelstrom of debate about streaming services and fair pay for creators. 

Among other things, Apple detailed their average pay-per-play ($0.01), the fact that it pays all labels, writers and composers an equal rate, despite size or “featuring” (placing a song on an editorial playlist.)

Read the full letter below: 

Apple Music Insights: Royalties

This update, which is part of a new series of newsletters, looks at how creators earn royalties from Apple Music and how these have grown over time.

We believe in the value of music and paying creators fairly for their work. Since we launched the iTunes Store in 2003, we have helped millions of artists and songwriters make a living from music. As the discussion about streaming royalties continues, we believe it is important to share our values. We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring.

We pay the same 52% headline rate to all labels.

While other services pay some independent labels a substantially lower rate than they pay major labels, we pay the same headline rate to all labels. This means artists can distribute music however they like, knowing Apple Music will pay the same rate. Sign with a label or stay independent; we believe in the value of all music.

We pay the same headline rate for all compositions.

Without songwriters, there wouldn’t be recordings. That is why we have paid every publisher and licensor the same headline rate within each country. It’s also why we have invested millions to optimize publishing operations to ensure songwriters are paid as quickly as possible.

Our average per play rate is $0.01.

While royalties from streaming services are calculated on a stream share basis, a play still has a value. This value varies by subscription plan and country but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.

We do not pay a lower royalty rate in exchange for featuring.

Apple Music’s team of global tastemakers hand-curate 30,000 editorial playlists. These tastemakers select music based on merit and we do not ask anyone to accept a lower royalty rate in exchange for featuring. The same is true for Apple Music’s personalized playlists and algorithmic recommendations.

As a result of our commitment to these values, Apple Music paid out royalties for more than 5 million recording artists around the world in 2020, over 1 million more than in 2019. The number of recording artists whose catalogs generated recording and publishing royalties over $1 million per year increased over 120% since 2017, while the number of recording artists whose catalogs generated over $50,000 per year has more than doubled.

Like others, we have looked at alternative royalty models. Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists. Per play rates would cease to be the same for every play of a song. But more importantly, the changes would not increase what all creators earn from streaming. Instead, these changes would shift royalties towards a small number of labels while providing less transparency to creators everywhere.

At Apple Music, our focus remains on artists and songwriters and finding new and innovative ways for all creators to make a living from music. With Apple Music, music fans around the world enjoy an uninterrupted ad-free experience while knowing their data is kept private and used only to enhance the overall music experience for them."

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When broken down from highest to lowest paying streaming services in 2021, the list goes as follows, according to Ditto Music: 

• Napster ($0.019 per stream)
• Tidal ($0.1284 per stream)
• Apple Music ($0.00783 per stream)
• Deezer ($0.0064 per stream)
• Spotify ($0.00437 per stream)
• Amazon Music ($0.00402 per stream)
• Pandora ($0.00133 per stream)
• YouTube Music ($0.0.00069 per view)

Translating this into something that makes sense: For each member of a band of five to make a living wage from Apple Music streams alone (deductions included in our hometown Cleveland), they would need more than 5,000,000 annual streams! 

Luckily, streams aren’t bands’ primary source of income! 

NOW ACCEPTING NEW CLIENTS!

Unfortunately, artists remain beholden to what often feel like arbitrary rules set by streaming services and social media. The questions are either: “How do we make a meaningful change to this system?” Or “How do we learn the rules and use this system to our advantage?”

Our team of marketers, advertisers, merchandising specials and artist consultants are constantly researching both and want to help you answer the latter before your next big release. 

Contact sales@180dbartists.com to learn what we can do together today!