The first company I looked into in depth was iTunes and its corresponding Apple Music. Through iTunes, artists receive less than 10% of the price of the sale of their song. For a $9.99 download, the artist receives 94 CENTS, the record company receives $5.35, and iTunes receives $3.70. For every song downloaded, the artist gets NINE CENTS. They put in so much work only to earn nine cents. As the average minimum wage in the United States is currently $1,071.20 a month, the average artist needs to have at least 11,903 songs downloaded a month to average minimum wage. Apple Music is no better on the artist’s front. I discovered that Apple originally payed only 58% of streaming royalties to artists whose music was streamed through the new Apple
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The company pays back 70% of the money they earn per song back to the rights holders like labels, publishers, and distributers. Although Spotify has paid out over three billion dollars to these rights holders, the money gets divided unfairly among the record company itself and those who actually wrote the music and those who recorded it. Despite their recorded payout of 70%, the 30% the company retains is estimated to be worth $1.2 billion dollars from its 10 million paying subscribers alone. Each subscriber pays $9.99 per month. Of this fee, $6 goes to the owner of the recording, $1 to the owner of the copyright, and the remaining $2.99 goes to Spotify. Which is fairly similar to the proportions used by iTunes. Except with iTunes, songs are purchased once, the artist gets their payment, and the buyer can play the song as many times as they would like without the artist ever being compensated again. On the other hand, according to their website, Spotify generates payments every time somebody listens to a song on their sites; however, they do not calculate the royalties owed based on the play count. Quoted from their official website, the payout is instead calculated based on “what countries the people streaming their music are from, Spotify’s number of paying users as a percent of total users (the more paying customers, the higher the “per stream” rate), relative premium pricing and currency value in different countries, and an artist’s royalty rate”. This equals out to an average payout per song stream of $0.006 to $0.0084. The description of their payout methods on the site are very convoluted; however, they are fully disclosed. Spotify seems to benefit record companies and rights holders much more than the actual musicians and writers- a general trend in these newer streaming
The company pays back 70% of the money they earn per song back to the rights holders like labels, publishers, and distributers. Although Spotify has paid out over three billion dollars to these rights holders, the money gets divided unfairly among the record company itself and those who actually wrote the music and those who recorded it. Despite their recorded payout of 70%, the 30% the company retains is estimated to be worth $1.2 billion dollars from its 10 million paying subscribers alone. Each subscriber pays $9.99 per month. Of this fee, $6 goes to the owner of the recording, $1 to the owner of the copyright, and the remaining $2.99 goes to Spotify. Which is fairly similar to the proportions used by iTunes. Except with iTunes, songs are purchased once, the artist gets their payment, and the buyer can play the song as many times as they would like without the artist ever being compensated again. On the other hand, according to their website, Spotify generates payments every time somebody listens to a song on their sites; however, they do not calculate the royalties owed based on the play count. Quoted from their official website, the payout is instead calculated based on “what countries the people streaming their music are from, Spotify’s number of paying users as a percent of total users (the more paying customers, the higher the “per stream” rate), relative premium pricing and currency value in different countries, and an artist’s royalty rate”. This equals out to an average payout per song stream of $0.006 to $0.0084. The description of their payout methods on the site are very convoluted; however, they are fully disclosed. Spotify seems to benefit record companies and rights holders much more than the actual musicians and writers- a general trend in these newer streaming