Apple Music pays a penny per stream, double Spotify's rate

Apple Music has revealed in a letter to artists that it pays one cent per song stream. While that doesn't seem much, it's around double Spotify's rate for payments. Apple's rate can sometimes dip below a penny per stream, according to the Wall Street Journal. But it's still much higher than Spotify's average per-stream payout of between a third and a half of a cent.

At last count, however, Spotify had far more paying members than Apple Music. Spotify had 155 million premium users in the fourth quarter of 2020, and 345 million users overall. The last time Apple revealed its Music subscriber numbers was in June 2019, when it had more than 60 million members.

Spotify users stream more music than those on other platforms. As such, the company drives more revenue to the music industry than its competitors. It paid rights holders €5 billion (around $6 billion) last year.

Artists typically don't receive those payments directly. Apple, Spotify and other services pay royalty fees to rights holders, such as publishers, record labels and distributors. Artists and songwriters then receive a cut of the royalties, which depends on their deals with those rights holders.

Apple wrote in its letter that it pays out 52 percent of Music subscription revenue to record labels. About two-thirds of each dollar of revenue that Spotify pulls in (including from users on the free, ad-supported tier) goes to rights holders, with around 75-80 percent of that paid to labels. Overall, streaming accounted for 83 percent of record industry revenue last year, according to a Recording Industry Association of America report.

Artists, industry figures and many fans have been demanding higher payouts from streaming services, especially after the COVID-19 pandemic brought a temporary end to touring, a key source of revenue for performers. At the very least, more transparency from music streaming platforms is a welcome move.